I have been attending the CES for the past few days and I have one piece of advice for e.Digital shareholders:
DO NOT SELL ANY SHARES!
I have spent most of the past three days going through the entire show, booth by booth, aisle by aisle to review developments in technology, digital music, competitor advances and the thoughts of e.Digital's business associates on EDIG's quality and prospects.
When I have more time I will post on some interesting trends that I observed in consumer electronics (most of which have little to do - yet - with e.Digital). However, I felt that it was most important to report my conclusions on e.Digital's prospects.
I spoke at length with the following individuals:
A very senior officer and an audio product specialist for Texas Instruments
Three development engineers and a senior officer for DataPlay
Several of the other technology partners for DataPlay
A group product manager for Microsoft
A technical products marketing specialist for IBM
Two senior U.S. representatives for Eastech
Two key individuals at Hy-Tech
An applications engineer for Toshiba
An applications engineer and a product manager for Samsung
Numerous e.Digital engineers and marketing specialists
Piecing together elements of each of those conversations convinced me that e.Digital is on the verge of some huge and very positive developments in technology, marketing successes and financial results.
Engineering/technology:
It would be inappropriate to quote individuals, but a common theme from all of those who have worked with e.Digital's engineering team is that it is unsurpassed in digital audio technology. MicroOS and MicroCAM are viewed as very significant intellectual properties. The company is very admired for its ability to meet deadlines and to quickly solve engineering problems. Their success in reducing the cost and power consumption on audio products is well-known.
The company is working closely with several DSP suppliers and is getting numerous and important engineering referrals from those companies. (Note: I have read the recent discussion about the Texas Instruments MicroOS embedding question and can offer no opinion on either side of that issue.)
The technology partners of DataPlay that I spoke to were absolute and unstinting in their praise of e.Digital and the music player that e.Digital created.
I also have strong reasons to suspect that another major technology development is underway at e.Digital that will further define the quality and value of this company.
Microsoft's major theme at this year's CES was the "Microsoft Home", which highlights the many applications for Microsoft technology in various home situations. In the elaborate book accompanying this promotion there is a listing of "Microsoft Partner' Technologies". There are a number of prominent names listed, including Compaq, Philips, Hewlett Packard, GE, AT&T, Intel, Panasonic, Motorola, etc.
And e.Digital, Maycom and Treo!
Marketing:
Both Hy-Tech and Eastech are very, very happy to be working with e.Digital. Both have numerous projects underway to produce products for multiple OEMs using e.Digital technology. Both firms expressed their great surprise at the number of firms that e.Digital is working with. Hy-Tech is so excited by the prospects for OEM production for the jukebox that they are attempting to their curtail direct sale of the Treo in order to avoid upsetting these huge customers. I believe that at least two of those OEMs have already committed to orders for delivery in the first quarter of this year. Eastech is involved in numerous projects with e.Digital already, including several jukebox designs for various customers and multiple DataPlay music players.
Fred Falk was engaged in meetings continuously during the first four days of CES. He was able to come over to the show only once, very briefly.
The DataPlay booth was extraordinary in design and appeal - easily the most talked about and visited booth at this huge show. Every major consumer electronics company had delegations visiting that booth. And each of these was taken by DataPlay representatives over to the e.Digital staff on hand where they spent substantial time in examining e.Digital's designs and discussing the technology behind it.
At one point in the show I had a conversation with a senior e.Digital engineer and suggested a likely DataPlays application for the cQuence portable unit. I was told flatly that with all of the projects currently underway, which had been considerably augmented by significant recent developments, there was simply no time to even consider working on cQuence enhancements. Now consider the significance of that statement by the fact that the cQuence was the only revenue source for e.Digital in the last year. How rapidly things change in a development-stage company!
Financial:
In my opinion there can be little doubt now that the OEM contracts soon to be announced for the jukebox will generate huge cash flow for e.Digital. The days of equity placements to produce the cash for operations will be a distant memory. We have all seen quotes attributed to Fred Falk about licensing income in excess of $50 million during this year. It is my understanding that those estimates have been raised substantially by recent marketing developments.
In summary, everything seems to be breaking right for e.Digital except its stock price. I suspect that one mention of the company by a major media factor would change that overnight. And even if that publicity does not occur soon, the extraordinary financial results that the company is likely (IMO) to achieve this year will make media attention inevitable.
This is would be a very foolish time to listen to mindless bashers who will attempt to convince you to sell your shares. You are shareholders in a company with enormous promise in its technology, profound respect from the most significant forces in consumer electronics and systems technology today and a deluge of contracts about to rise to visibility. Be very happy that you are here!
JimC |
