Why this preannouncement and why now?
The day before Fowler is to go on CNBC, IDX preannounces. Why? Well, if Fowler went on CNBC and said and showed nice things, and the stock spiked, it would also potentially crash on a preannouncement the next week. Guess who gets sued by Lerach then?
And as part of our 'managing expectations' approach, IDX has also lowered the bar considerably by saying they should be judged during calendar 2000 by the number of channels they open, rather than by the number of sales they make. Anybody else catch that?
IDX will not have an especially good year in calendar (not FY) 2000 if all they can do is get more channel partners. New partnerships are good to the extent they block the competition and hold the fort until something happens to blow up the present logjam in the PC market. However, partnerships alone will not result in profits. In fact, we will see flat results (assuming renewed growth in live scan) if this is all IDX is aiming for.
The good news in this part of the preannouncement is that IDX is concentrating first on the PC market. The bad news is they don't seem to have a strategy that makes them feel confident they have imminent, major sales coming in the PC market. This company is not big and strong enough to give away its hardware and rent its software -- a strategy that might accelerate adoption of biometrics.
I think they should be co-selling the hell out of the Compaq channel, now that there is new software and, at any time now, new hardware. If Compaq succeeds, that will help persuade other major PC makers. By now, I would have expected more than Compaq as a PC OEM . . . so IDX has some work to do. |
