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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: Walter Morton who wrote (11371)	3/1/2000 7:08:00 PM
From: bob	Read Replies (4) \| Respond to of 18366

Diary of a Fund Portfolio Manager ipsfunds.com Robert Loest, Ph.D., CFA Portfolio Manager February 29, 2000: Read what The Motley Fool has to say about IPS Funds! A Foolishly Managed Mutual Fund (Fool on the Hill) February 24, 2000 February 28, 2000: Disruptive Technologies Again. For Millennium today we added a new company, e.Digital (EDIG.OB.O). As those of you who read this know, I am always looking for the next disruptive technology. That's a new technology so radical that it will eventually displace the companies that are the current technology leaders. It's too different to be adopted within existing market leading companies. It isn't an incremental improvement to existing products, like thin-film recording media on disks were an incremental improvement over previous recording media. It's a total challenge to existing technology from outside the leaders in the field, like steel mini-mills were to the integrated steel producers like U.S. Steel. If you want to read more about this, Clayton Christensen's book, The Innovator's Dilemma has defined the concept of disruptive technologies and their consequences. Okay, having set the stage, you know by now that I think Sandisk is the next disruptive memory storage technology. Right now all it's used for is digital cameras and a few other applications that a year ago were more of a toy than a serious threat to companies like EMC, IBM, Quantum or Western Digital. That's changing in a hurry, though. EDIG is a $2b market cap company that develops hardware and the software OS for handheld digital audio and video recording and playback devices. This OS is specifically designed to operate using the tiny flash memory cards like those made by SNDK used in digital cameras. Currently SNDK flash memory cards can store 128 Megs of data, and will soon reach 1 Gig. You can store a lot of music on a 1 Gig card. Their hardware and software is Internet ready, can be upgraded over the Internet, and used to store downloaded music and video from the web. Increasingly, EDIG products will be used to play music in cars and in tiny handheld recorders and players. We don't know that this company will be the Microsoft of music and video handhelds, but it has an excellent franchise. If its OS is extended to other types of handheld devices like cell phones and Palm Pilots, it could prove to be a valuable company. Even without that, the explosion in Internet delivery of music may make this company into one of the better values in the music sector, which is very large. Looks as though we got a buy recommendation from Millennium Funds.