Wolff, I am not exactly a "bull" on XYBR, my reasoning is rooted in the extreme weakness of their balance sheet rather then the weakness of their products.
Any device manufacturer coming on the market with a new product uses the technique of "skimming the cream" first. Namely, you find those market segments where you can charge an arm and a leg for your product, simply because the payoff to the end user is much larger than what you charge. When you do that you generate "unfair" profit margins that allow you to go down the learning curve, lower your costs and selling price and as a result broaden the market appeal, you continue adding market strata until you get to the "consumer", and then you are in "Nirvana" state. Can XYBR with its weak balance sheet survive through all these steps, I know not, but I certainly can see many market niches in the industrial and commercial arena where a wearable computer will be more useful that a Palm or a laptop.
I think the questions of survivability will depend on how fast they can exploit these niche markets and how much more funding will they need before they turn positive cash flow. Not whether there are mass markets for the product at current prices. That prices will come down with volume is a given in the high tech industry. Just follow the pricing of any of the high tech gadgets around you. Look at Phillips' flat TV today and compare its current price to what their own plans are five years hence, or even look at the $1000 PC which you could not get for $10,000 five years ago.
Good luck
Zeev |
