Value Microcaps Zip Code Changers

[southacresdave]

Kozuh...SCKT...

The disappointing thing is how little of the HP iPaq remnant revenue they were able to capture (pretty much $0). It's what killed the stock price and has made this investment drag on for me way too long. I've come to realize that Socket's management doesn't have the ability or the sales people to compete. (Though they do have the engineers). The engineers are the ones who created the Software Development Kit for the scanners for integration into partners software. They have created an impressive smorgasbord selection of barcode scanners. So how does this add up??

ex. The only barcode scanner being used by the new Verifone GlobalBay Merchant POS system is a Socket scanner (and once it's integrated into their software, it's not easy for a competitor to swoop in. Plus Socket offers more choices---1d, 2d, all antimicrobial, colors, different case hardness, laser & optical---than anyone else). Today, in the Wall Street Journal, Verifone's GlobalBay POS product is being integrated with iPayment's customer software to sell in a "bundled" package (including a barcode scanner) to the 150K small businesses that iPayment processes payments for. As partners like this grow, Socket just rides their coattails.

http://www.marketwatch.com/story/ipayment-partners-with-verifone-to-bring-next-generation-pos-to-main-street-merchants-2014-05-27

Note: I'm not 100% certain that the Socket scanner is in this "bundle". However, I do know for certain that the only barcode scanner Verifone GlobalBay system uses is the 7 series scanner from Socket.

Socket: The plus to the scanner business is that, unlike the Somo, this is an up-and-coming technology with tablet POS. Socket's management doesn't really have to sell anything. The partners do it---they just have to deliver scanners to the distributors. Their expenses aren't going to go up much as revenue increases (don't need more executives, sales people, engineers. They need warehouse people). Eventually competition will come, but they have a huge head start and it's not easy to get all these partners to change their software systems just to use a different barcode scanner later. I see them getting bought out by Honeywell or Motorola in the future for the marketshare they already control.

I, and others, are still upset over the Somo. If it was doing just $2.0M/qtr, this company's stock price would be very different. On the other hand, the scanner side of the business is the future and is finally making up for the weakness of the Somo.