With GPS, one has the actual receiver and then there is the hardware and software application that takes the position info from the receiver and turns it into something useful.
In many applications, such as precision mining equipment, the latter portion will constitute the majority of the R&D effort, and, consequently, as much as 90% of the value. Does Trimble get revenue from the total portion of theses applications or do they just make a piece of the hardware?
Each application requires a different type of software application to digest the GPS info and, with it a different type of man-machine interface. Thus, another difficult issue with this company is that they appear to be in so many areas that if they did have the total value of all these applications, then they could easily have great difficulties managing the business. Their lack of recent profitability underscores this point.
If, as you say, TRMB is pursuing a very long term strategy, then where is the real payback point? TRMB does seem to lose in a lot of key areas. For example, competitors are successfully boning in on the car nav market. If they are not making money, then they should have already made the strategic inroads to own this business.
{maybe today's jump in the stock price will be followed by good news and I'll be able to shut up.} |
