The new NeXT will operate under a radically different financial model, needing to at least double the number of NeXTSTEP seats while keeping a tight reign on expenses.
"It's hard for hardware companies to move into operating systems because they're capitalized for far different sales numbers and often underestimate the support burden," said Jeff Tartar, editor of Soft-Letter.
Even though the estimated average receipt per unit will fall by a factor of ten, from $6000 to $600, gross margins after discounts will double to 80 percent.
With a target of 25,000 units per quarter, NeXT could achieve a total revenue of just under $30 million for the second half of 1993. Given the lifting of NeXT's debt load with the sale of the factory, NeXT could achieve profitability in 1994 by shipping between 100,000 and 150,000 units.
NeXT initially plans to achieve these numbers with a direct sales force calling only on current customers and an additional 100 major U.S. and multinational companies, according to NeXT President Peter van Cuylenburg.
Future and current owners of NeXT stock or options may reap substantial benefits. Software companies trade for an average of between 20 and 25 times earnings, while hardware companies go for 10 to 15 times earnings.