I have done some hard thinking about the Terastor PR blitz (that's all that it was BTW- no products, just let others make them for them and pay some hefty licensing fees I suppose) and was surprised to see that private investors are valuing AXC the same $300M market cap as privately held and venture capital supplied Terastor!
Anyways, here are the options of reality a year plus hence:
-Terastor miraculously farms out all aspects of everything to all manner of companies, totally taking out the current disk drive industry. NOT!! While this may be the case 5 or 10 years from now, it won't be happenin' in 98, 99, or '00 either for that matter.
-Terastor indeed does come up with a disk drive competitive product and starts taking market share away over time. PROBABLE-however there will be some major glitches along the way and time delays- major ones probably- that swiftly darken the sunny picture the market presumes at this time.
-terastor is found not to be competitive at all with disk drives, not attaining the speed/reliability/price needed to be competitive with a moving target HDD industry growing capacity at 50-60% a year. 10Gbits/in2 is also in disk drives roadmap, but a few years hence. PROBABLE
At this time tho, not wanting to be found too confident, I'm putting my guesses on the 2nd probability. Choice #1 is too radical, too far fetched, too optimistic. Choice 3 sounds too pessimistic, especially coming from these industry veterans. Does sound tho like they're going to leave all the dirty work to the licensees. The honeymoon will soon be over I guess as terastor enters the real world. Can't believe he's predicting things out as soon as early 98. don't believe a word of it myself.
So where does that leave AXC? IMO, the next 3 years are the same. Full acceptance of KM very likely, huge amount of licensing fees coming in to the tune of hundreds of millions, which'll let AXC do much more of what it does best, come up with bleeding edge tech stuff in the lab, and what Bramson is finally making this company do, getting profitable from it. Out longer than 3-5 years tho, I guess terastor or some other technology will eventually, over time, supplant disk drives as we know them, but AXC developed KM in 1991, and how many other inventions will they have cooked up by then? It's still a steal here at this price based solely on the likely outcome of Mitsu lawsuit and the booming DST business- of which AXC has said they can bring many many improvements to yet. Looking for at least a short pop up with release of 10K. Good KM progress should pique more analyst/brokerage following too as possibility of fuller industry acceptance becomes clearer and clearer. FYI, I'm still fully invested (and borrowed!) in AXC. Nothing finer I've seen yet in my continual searches! |
