Protocall Technologies Inc (PCLI)

[Value_Investor]

COMPETITION

Our competition includes several privately-held companies that produce music CD delivery systems and self-serve DVD disc dispensing kiosks that are similar in functionality to our service. These companies could conceivably re-engineer their products to compete with us more directly, however, they would still face numerous obstacles related to replicating our service and production processes.

Hewlett-Packard (HP) has reportedly began providing a centralized DVD on-demand order fulfillment service to Wal-Mart and potentially other web retailers thereby presenting formidable competition to our order fulfillment business. We believe, however, that our in-store solution in combination with our web order fulfillment service provides an overall stronger value proposition for retailers.

Other forms of product delivery, including Internet downloading and streaming of movies to a consumer's PC, are new channels of delivery that could potentially grow over time. Additionally, there are other forms of physical storage media including HD-DVD and USB thumb drives that are likely to begin market penetration in the coming years, each of which is easily integrated into our service.