Hi Christine, I've been watching 8X8 ever since my wife heard a news blip on it early one morning and jabbed me in the ribs saying she thought it'd be a winner of a product. I got the message. She has a very keen market sense. 15 minutes later I bought the stock. Then I started looking into the company and the product. Went to Fry's to see it demoed. Their demo was not very satisfactory due to surroundings, lighting, noise, distractions, but intriguing nonetheless. So I bought a couple units. With the rebate discount about $450/unit. Given Fry's customer-friendly 30 day "no questions asked" return policy, I felt it would be prudent to take the units home and try out. With close relatives 5 jet hours away it seemed reasonable. We tried 'em and liked it enough to keep those two and by a third unit which was priced $50 lower than original two.
Its not great video. But its satisfactory. We don't use them all that much yet. Still have the third unit uninstalled. They are elderly and will need help. But the point is, this product is opening up a whole new paradigm in communications. It ties two very widely installed traditional technologies together into a cohesive whole thats greater than the sum of its parts. Its simplicity at install and ease of use suggests to me that this will happen over and over again throughout this country. I see this as a clear and distinctly separate market from video via PCs.
I have not seen CFON's product. But ViaTV is made with luddites in mind, assembly not being my strong point I feel very confident in this. I have been impressed by 8X8's distribution network. It sounds like they have positioned themselves well in this early phase of selling to the mass public. Their timing seems good relative to Holiday buying season, and the price frankly, I think is well within most of middle America's "one big gift" at the holidays budget. So I think this and products like it will start selling well this coming season and it fits that hole in "whats new in the technology world" that the buying public is ready for. You know, VCRs, camcorders, PCs, digital cameras now this.
Now about 8X8. They were formerly IIT, a fabless processor design shop. I think I remember buying one of their 287 numerics processors years back to speed things along back in the dark ages. Obviously they are out of that market now, have spent a good deal of money, changed their name, and some management, wrote up an IPO, etc. In reading their filing, I noted a huge percentage of the outstanding stock was locked up for 6 months per pre-IPO agreements signed by everybody fortunate enough to gain legend stock before the release. Now this Qs report indicates that 33% of that overhang will be released from the lockup commitment early, about 4.6 million. That happens Monday. Some of that will surely hit the market.
The stock took a big jump on a surprise good news earnings release. Another upday on Thursday, with talk attributing it to Canadian BC Tel signing an agreement with 8. I don't get that one. Are our northern neighbors likely to buy into this a lot more than us just cuz some company will lease the units out at 5 or 10% a month ? Is $400 a unit that much of a deterent ? It seems like a VCR type threshold to me and those are ubiquitous.
So I like the stock, and I like the product. I think the stock may be getting ahead of reality now though. And I think the product needs a next generation boost to get it into that compelling zone. When we use it, we sometimes connect at 28000 baud, and often slightly slower, 26,800, and sometimes 24000. At any of these speeds the video movement or clarity is comprised. What will it take to improve on this ? Is it possible to expect better compression algorithms ? Will these units be able to connect at 56K ever ? Are there low cost alternatives to deal with this on the horizon ? If this can be improved upon just a little bit further, this country, and then the world will be heading towards the long held promise of personal video communications.
Oh yeah, dummy me, I sold all my 8 four days later on the spike from 9 to 11. Made enough to pay for the three units. Now I'm on the sidelines watching and waiting for the "right" buy-back-in opportunity. Coulda shoulda woulda... |
