From Ihub - JBocca SHM comments. Good Read.
investorshub.com
Notes, Thoughts, Commentary and Opinion regarding the 2002 Annual Shareholders Meeting.
Following are my condensed notes, both written and mental as well as my thoughts (interspersed) regarding the meeting, discussions with management, and e.Digital going forward.
The shareholder meeting was held at the same location as last year with the exception that a smaller hall was utilized. The room was filled to max capacity and was “standing room only”. I would estimate that there were in excess of 350 shareholders present in the audience.
Robert Putnam conducted the formal business matters at hand and presentations were given by Fred Falk, Jim Collier, and Alan Cocumelli with a “Q & A” at the end with Falk, Collier, and Putnam.
The meeting itself was satisfactory, IMO….nothing more and nothing less. Some shareholders were disappointed that a blockbuster announcement was not made. For me, the best part of the meeting is the personal interaction with the members of management after the meeting concluded. I took full advantage of this time as I was one of the last people to leave the building and utilized the time by speaking with Fred and at length with Jim Collier and Ran Furman (the new CFO).
In no particular order, following are specific comments from the meeting, discussions, and my thoughts:
Products:
MXP-100: The MXP-100 was designed, developed, and manufactured in only 5 months. Voicenav is the key feature of the device. The original timetable for voice recognition in a portable device was mid-2002. The e.Digital engineers were able to accelerate the timetable by approximately 8 months.
It is likely that other OEM’s and customers will market MXP-100 clones.
XP3 Classic: This device (a 10GB HDD) will be brought to market by a customer of Musical either through one of their labels (i.e. Emerson) or just as is with no brand name and will be distributed through Circuit City. The device is aluminum, sturdy, and slightly larger than the new, smaller TREO in all dimensions.
The key feature of the XP3 Classic is it is encodeable…meaning music can be ripped/transferred from a CD player directly to the device bypassing the need for a PC. Archos is the only other company that has a large capacity JB that also encodes, however the price point for the XP3 will be in the $279 range…approximately $50 - $60 less than the Archos JB.
MP2000: The MP2000 is a DAP that utilizes flash memory and will ship with a 128MB CompactFlash card. The device is slightly larger than a credit card. With a price point of $179, this device is priced very competitively.
The MP2000 will be available for sale on the e.Digital store prior to Christmas.
TREO 10: The new TREO 10 is currently in manufacturing in the U.S.A., has a new brushed aluminum case (as opposed to the plastic case), comes standard with a 10GB HD, and is slightly smaller than the original TREO.
The contract with Hy-Tek states that after a specified number of sales have been achieved, e.Digital will own the TREO trademark.
ET 700: The ET 700 is a large capacity HDD Jukebox that will be brought to market by Easttech through their customers. Easttech is currently in discussions with more than one company to market and distribute the ET 700.
The ET 700 has an appearance very similar to the Nomad JB from Creative Labs. It is not designed to be a portable unit, but has “feet” on the bottom and is more suited to reside on a table, desk, or other flat surface.
Miscellaneous Developments:
· Per Jim Collier, e.Digital has the necessary infrastructure in place (via APL) to ramp up and deliver products in short order to their customers. The company can go from 100 to 100,000 units quickly to meet the demands/needs of the OEM.
· Toshiba is having difficulty with the price point for their 1.8” HD.
· Per Falk, e.Digital is in close contact and collaboration with IBM Europe.
· There is daily contact/dialogue between the marketing personnel for the IBM Microdrive and the top marketing personnel of e.Digital.
· Jim Collier has been given “free reign” to implement processes, add staff, etc. as he sees need be. He foresees additional staff being added in the form of engineers (at least two more in the near term) and additions to the sales and marketing team.
· Voicenav, through new advancements, will add the ability where mid-song commands can be utilized.
· Upgrades to the e.Digital devices will likely be down without an additional cost to the consumer.
· With the addition of Ran Furman as CFO, each individual product and project will have a projected and quantifiable life expectancy (i.e. 18 months, 24 months, etc.) before a future generation product or advancement impedes the sales of the first device. With this identified life expectancy, profit & loss (p&l) will be calculated. This will force all the members of the project team to meet the established deadlines for implementation as every day of delay will equate to lost revenue…within this finite period of time (life expectancy).
With the additions of Collier and Furman, the company is interjecting new executives, with fresh ideas, enthusiasm, and the business acumen to guide e.Digital towards a better regard for P & L, effectiveness and efficiencies, etc.
IMO this is a welcomed migration from a R&D “think-tank” type company to the lead technology applications integrators that they can become.
· EDIG devices currently utilize the TI DSP DA150. Next year the DA250 will be utilized with, in the words of Fred Falk, “a lot of surprises”.
· “subscription services technology” is a new advancement / addition that we will be hearing more about. The technology is in the e.Digital devices to allow for the enablement of subscription services and streaming content to the individual device.
During the Q & A I asked Fred if there was something inherent in the e.Digital devices that is unique and provides the company with a “leg up” and differentiates their devices for the various music portals and makes them an attractive receptacle. The answer I received was, “yes there is something very unique”, but he was unable to provide any details and did say we would hear more in this regard in the future (IMO when the music portals such as PressPlay are up and running).
· We will be hearing more regarding automotive applications for e.Digital products and platforms in the future. There are two markets in play here - in-dash units and the after-market. Fred Falk went out of his way to emphasize the after-market for automotive audio devices and e.Digital’s desire to penetrate this market.
· MicroOS 3.0 is being worked on currently and represents a “major, major development”. The new, advanced features of MicroOS 3.0 will include the wireless protocol 802.11b. The opportunities and applications for devices utilizing this wireless standard are substantial and when the “subscription services technology” is added into the mix, the possibilities (including satellite radio, IMO) are limitless.
· e.Digital is currently in discussions with other e-tail outlets (such as Amazon.com) to distribute the line of e.Digital branded devices.
· e.Digital is in negotiations / discussions with more than two PC companies regarding bundling. Bundling with the IBM Thinkpad would appear to be a natural fit.
· DataPlay remains on track to "launch" in the first quarter of 2002. I did not get the impression that management has all their "eggs in one basket", but they are anticipating significant revenue and opportunities with DataPlay.
The DataPlay device that was available at the shareholders meeting was small (approximately the same size as the MXP-100), lightweight, and was quite cool!
· Other products besides the MXP-100 are expected to be available in traditional retail and etail channels before Chrsitmas 2001. These devices include the MP2000, XP3 Classic (in Circuit City), ET 700, the new TREO 10, and devices from Bang & Olufsen (to be distributed in the B & O retail stores).
These are my notes and thoughts from the shareholders meeting. After reflecting on the meeting and the content that was discussed, I am more confident in e.Digital's position in the emerging market for Internet appliances, the ability of the engineers to continue to innovate and integrate, and the ability of the management team, particularly Jim Collier to guide e.Digital to the next level and beyond.
Best of luck to all...
"J" |
