The internet is poised for a new stage of phenomenal growth. This is important for e.Digital because it's stock is expected to command valuations to which tech investors have become accustomed.
Surrounding the recent market volatility has been serious questioning of such valuations. Such doubt may be valid if the company has carved its niche strictly within the phase of Internet evolution that is marked by desktop PC/User access. Moreover, investor doubt should be heightened if such a company is not a market leader in this phase of Internet evolution.
However, doubts to whether such valuations are truly history fail to factor what at present time is probably unfactorable. If we assume that the Internet has a societal revolutionary power analogous to Guttenberg's press, a reasonable assumption since the two were basically facilitators of information, then it would take a true savant in chaos theory to understand the future effects of absolutely untethering the Internet. There are market estimates for certain aspects of this coming evolution such as Strategy Analytics estimate that the worldwide mobile commerce market will reach 200 billion by 2004 or IDC's U.S. forecast of 61.5 million mobile devices utilized for information services. But, these predictions remind me of predictors of weather phenomena such as hurricanes.
Every year predictions are made that there will be so many hurricanes of varying intensity and certain geographic targets can expect so many hits out of these totals. There seems to always be considerable variance between what is recorded at the end of the season and the predictions. So while the predictions were grounded in rational theory and probably factoring in many variables, truly accurate predictions are difficult because the weather is a chaotic phenomena that has virtually infinite causitive factors which influence events. Loest's ecosystem model on his website is analogous.
As technology releases the Internet from the bottle of the desktop PC, the desire of consumers for information anywhere, anytime and now will be a unpredictable thing in my humble opinion. What is predictable is that small form factors will command a value and edig's existing and forthcoming patents will help companies conform with quality to the need for small.
Untethering the Internet would seem to also affect economic productivity in that more things will get done faster/worker. Increased productivity is a great inflation fighter and so is helpful in maintaining or increasing present valuations of quality companies.
For a edig investor to benefit from this evolution we must assume that the investor is long term. Also, we must assume the quality of edig's patents
As per patents, it is highly indicitive that IBM, Txn, Lu, Intc are working with edig in utilizing edig's patents. If one of these companies felt that there were significant loopholes in the wording of these patents, then they would simply take them. Perhaps this is a pessimistic view of business ethics, but I can't dismiss the Msft stories of how they would trounce many small companies in the valley by immersing them in legal fights. If the patents are legally rock solid, then do they have value? If they did not have value, then why are these big companies working with edig? So, it seems likely that the patents are bulletproof and valuable.
I mention the above so that investors keep the long term view even not only during dips, but also during the parabolic spikes that we could see per every major announcement.
All is opinion. |
