Reading between the lines of Mr. Falk's letter may be considered a bit obsessive, but from personal experience I know that every word and phrase in a CEO's letter to his shareholders is carefully considered.
With that in mind, please indulge this exercise in over-analysis:
We have strengthened our business in two major areas of emerging technology: PC/Internet compatible portable voice/dictation products and Internet music products.
This is the first reference I can recall to internet compatible portable voice/dictation products.
... our contract with Intel for advanced voice recorder prototypes. The project has taken interesting turns into areas of new technology and new OEM relationships.
The Intel prototypes project now includes new OEM relationships.
We remain on track with IBM, Intel, Philips and our other VoiceTIMES Alliance partners ...
Philips is given prominent mention, equal to that given to two of their publicly disclosed major partners, IBM and Intel.
VoiceTIMES founder IBM will take the lead in announcing progress and developments ...
e.Digital will probably be given significant mention in the next IBM press release on the VoiceTIMES initiative.
Potential customers for our designs include
1. established, name-brand consumer electronics companies,
2. home audio companies,
3. computer-related companies,
and
4. others not directly related to consumer electronics who intend to use Internet music players to promote their brands and products.
Very interesting enumeration of the four categories of music player customers for e.Digital. This is the first indication that I have seen that so many customers are in "development". I believe that the company would not list these categories unless there were serious prospects for contracts in each of them.
We agree with industry experts that the market for Internet music players will rapidly be in the millions of units annually.
I suspect that the company may be in a position to comment on the quantities based upon the contract discussions with the various prospects listed above.
Our engineers are incorporating Internet music support directly into home audio/video systems.
This is the first indication of work underway by e.Digital with major home audio firms. Note the use of the plural here.
Production-level Internet music players will be branded, marketed, and launched according to our licensees' product introduction schedules.
Use of the term "licensees" may be contemplative of future business. But then again, it may be indicative of non-public contracts bound by non-disclosure arrangements.
...and an increasing revenue stream from our sales to Lanier
Perhaps an indication that Lanier has already increased their orders.
The majority of our future revenue is expected to come from engineering design services, manufacturing services, licenses, and royalty fees in the hand held voice and music product markets.
Music is now given equal billing to the voice market. Clearly other markets are also under development to add to these two areas.
Mr. Cocumelli ... has been through two acquisitions there ... His contacts in the Internet community and technology sector will be extremely valuable assets to our company.
The mention of acquisition experience is significant to me. And the stress on the Internet community suggests other marketing efforts.
Skip Matthews ... brings a wealth of ... business relationships to our Board. ... his participation and guidance, along with Allen's, helps position our company as a leader in pioneering PC and Internet compatible handheld devices.
New business relationships and a new focus on Internet compatible handheld devices seem to be the message here.
There is always the danger of implying meaning where it is not meant to be and seeing patterns where they do not exist, but for me the letter provides further basis for my confidence in the future of this investment.
Jim
|
