Ethernity Networks, a provider of data-processing technology for networking, is set to see an increase in its gross margin as a result of its focus on higher-margin licensing contracts. The company plans to offer its customized passive optical network (PON) controller solution on a licensing model, providing customers with a more cost-effective option for certain PON applications.

Additionally, Ethernity Networks will target sales in application specific integrated circuits (ASICs) on a revenue-sharing model with ASIC vendors. This strategic move is expected to further improve the company's gross margin and enable it to pursue larger-scale PON platform contracts.

Chief Executive David Levi expressed his optimism regarding the implementation of the PON licensing model, stating that it will generate positive cash flow from operations and contribute to the company's profitability and growth.

In other news, Ethernity Networks announced that it has received payment for 40% of a $1.5 million purchase order. The remaining portion of the order was successfully delivered in July, with payment expected to be received by the end of August.

At 0819 GMT, shares of Ethernity Networks were up 1.5% at 1.75 pence.

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