http://www.sec.gov/Archives/edgar/data/1236997/000108503705001104/f10ksbex1011.htm

You clearly have to take Erik’s comments with a grain of salt: he is not objective. In most cases, a win for GIPS is a loss for XTen. XTen sells either the whole client or an SDK/Toolkit to build the client including the voice, net, multimedia, video, and protocol stacks. GIPS sells a package of software in the voice, multimedia, and net space: an engine to cover the path from the net (from the media/rtp perspective) through the jitter buffer, codec, and on to the multimedia system (sound card, speaker, mic). When somebody buys GIPS, they are choosing to integrate that with other components to build a client – and not take an Xten license.

Erik may also question – based on what I don’t know – GIPS business practice, but if you look at Xten’s SEC filings, you see a number of unlimited use, royalty free, unbranded licenses being sold. Including Yahoo, DT, Neotel, and Belkin. Maybe that practice will change with the new management.

One of the eye openers about Skype was the sound quality. That is a product of GIPS. And it extends beyond the codecs.

As for the unit royalty price of a quality engine or codec – it’s like $2 in a low quantity. Free may be a beautiful thing, but amortize a one time $2 purchase over the number of minutes you talk. Why tolerate a lower quality voice experience?

“open source issues” – the open source isn’t always free debate

Even as an investor of Gips, I see your logic. But I believe this is normal for codecs. They are almost all proprietary, (except eg Speex).

You still have to take into account product quality, system integration, and open source issues. Gips is hands down the best.

A codec implementation could be proprietary, but the question is whether one has to pay royalty to use the algorithm with your own development is the question. For example, when it was rumored that Skype is using iLBC, I did not comment on it, because others can implement iLBC. But that is not the case with iSAC (as I understand it). I am not suggesting that everybody should abandon GIPS; I am only suggesting that allow for others to avoid paying royalty to GIPS without undermining interoperability. This is not a crusade against one single company.

Jesus is God. God bless.

MOS scores and sound quality don’t show up in specs. I’m surprised industry advocates would complain about improvement in sound quality. This industry should be thankful for Gips.