Zacks Research on EDIG. This will be a 3 part post. Notice
they say EDIG is PORTING EPAC to TI's DSP's.
By: Westcoast
Reply To: None Thursday, 15 Jul 1999 at 10:15 PM EDT
Post # of 43129
NEWBIES - ZACKS RESEARCH ON EDIG (Part 1)
I tried to post this earlier today but the file was too large and only a portion posted. Therefore, I will break it up in parts.
Sometimes it's good to review the basics. Zacks does a superb job of describing the business of e.Digital.
Business Description for E DIGITAL CORP (EDIG)
COMPANY
e.Digital Corporation, a Delaware corporation ("e.Digital" or the "Company") is
a holding company which operates through its wholly owned California subsidiary,
e.Digital Corporation. ("Subsidiary"). e.Digital provides innovative product
designs and technologies for the rapidly growing market for electronic devices
using portable storage media (flash memory and microdrive technologies).
e.Digital employs its patented MicroOS file management system as the
intelligence targeted for portable digital voice, music, audio, image, video and
data recording and storage devices that interface with computers and the
Internet.
e.Digital earns revenues from performing contract design and development
services for OEM (Original Equipment Manufacturer) customers in a broad range of
targeted digital processing markets. These markets include dictation equipment,
digital music, consumer electronics, digital image and video and other portable
product markets. The Company also seeks to license its patented MicroOS file
management system and offers manufacturing services for its customers with
actual production contracted to third parties.
Currently the Company is developing and manufacturing digital dictation products
for Lanier Worldwide, Inc. ("Lanier"), an advanced digital recorder reference
design for Intel Corporation ("Intel") and strategically working with Lucent
Technologies, Inc. ("Lucent") in the digital music field. e.Digital has provided
initial portable digital music player prototypes to Lucent. These prototypes are
being used in demonstrating the downloading of secure high-quality music from
the Internet to the computer and then to e.Digital's hand-held music player. The
Company is also developing portable solutions for the emerging mobile enterprise
industry that is implementing voice and voice processing in mobile
corporate-wide environments.
The Company was incorporated in the Province of British Columbia, Canada on
February 11, 1988 and on November 22, 1994 changed its domicile to the Yukon
Territory, Canada. On August 30, 1996, the Company continued its jurisdiction to
the State of Wyoming, then on September 4, 1996, to the State of Delaware. On
January 13, 1999, the shareholders approved a name change to e.Digital
Corporation. The address of the Company's principal executive office is 13114
Evening Creek Drive South, San Diego, California 92128 and its telephone number
is (619) 679-1504. The Company's primary operating facilities are located at
that address. Its Internet site is located at www.edig.com.
INDUSTRY BACKGROUND
The Company designs products employing portable storage media with the major
categories being digital recorders and related mobile devices and the rapidly
emerging digital music market.
Portable Storage Market
The Company's MicroOS technology serves as the intelligence for portable storage
media (flash memory and microdrive technology are the most common types). The
traditional data storage market includes dynamic random access memory ("DRAM")
as the main system memory, static random access memory ("SRAM") as specialized
and high speed memory, hard disk drives for high capacity data storage and
floppy disk drives for low capacity removable data storage.
In recent years, digital processing has expanded beyond the boundaries of
desktop computer systems to include an array of electronic systems. These new
devices include hand-held data collection terminals, medical monitors, mobile
communication systems, highly portable computers, digital cameras, cellular
telephones, communications switches, wireless base stations, network computers,
pay telephones, digital audio and music recorders and other electronic systems.
These emerging applications have storage requirements that are not well
addressed by traditional storage solutions. Important requirements include small
form factor, high reliability, low power consumption and the capability to
withstand high levels of shock and vibration and extreme temperature
fluctuations. In the late 1980s, a new memory technology, known as flash memory,
was developed for these applications.
Flash memory-based products are solid-state devices. They are non-volatile,
meaning that no on-going source of power is required in order for the products
to retain data, images or audio indefinitely. Flash is noiseless, considerably
lighter, more rugged and consumes less power than older disk drive technology. A
variety of form factors have been developed using flash memory including PC
cards, CompactFlash(TM) cards, miniature cards, multimedia cards, smart media
cards and others. Flash products are produced by a large number of firms
including Intel Corp., SanDisk Corporation, AMD, M-Systems, Samsung, TDK,
Toshiba and others. Industry estimates indicate Flash cartridge shipments
exceeded 4.4 million units in 1998 and are projected to exceed 30.1 million
units in 2002 according to Peripheral Research Corp.
A newer technology consistent with the CompactFlash form factor is IBM's new
microdrive technology designed to provide higher storage capacity for portable
devices. Microdrives are high capacity miniature one-inch hard disk drives. IBM
has announced the availability of 170 MB and 340 MB microdrives in mid-1999.
The Company believes these portable storage formats are complicated to use and
generally require a sophisticated file system. A file system is a software
driver which is used to make portable memory components more closely emulate a
disk drive and allow an understood mechanism for rapidly storing and retrieving
data with the minimal overhead allowed in a portable device.
Current product applications by the Company have focused on CompactFlash cards.
CompactFlash is available in capacities ranging from 2 megabyte to 96 megabytes.
The Company's technology also supports SanDisk's multimedia card format, the IBM
microdrive format, Intel Miniature Card format and others thereby offering
customers design flexibility and choices among portable storage memory. Intel,
SanDisk and other large manufacturers are aggressively promoting high volume use
of portable storage media in a variety of new product concepts.
As a developer of advanced electronic products and technologies employing
portable storage media, the Company's success is in part dependent upon the
continued growth and use of various forms of portable storage media. New product
applications are also premised, in part, on continued reductions in the
per-megabyte cost of such memory.
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