I should have been a bit more aggressive today when the Q&A was going on. I didn't submit myself into the queue until near the end and I did not get through. My question would have been as follows:
Without naming names or mentioning locals, how many test markets is Neomedia currently in and what is the time frame that those test marketers are projecting before they roll out programs that generate revenue.
Please forgive me for getting into a whole discussion here, but this game is far from over. According to the CC there is enough financing and resources to last at least through the end of the year with Cornell. Plenty of time to find a good CEO and get some deal making done. Also, there was talk of either a VC or joint partner that could inject cash into the company in the near future.
For those who don't believe that more than one source of financing is available, look in your wallet. Most Americans have more than one credit card. One may have a better rate but a lower credit limit. Another may offer better overall terms and consolidation. It really comes down to two things, credit worthiness and ROI. If a partner company thought that Neomedia was a good risk, they would invest. If there was something to gain above and beyond the financing aspect, they would invest more. Neomedia is courting a partner with deep pockets that can benefit from Neomedia's success.
There are a couple of things that trouble me about what is going on in the barcode world but I am sure they will eventually be resolved.
One, is that there is a great deal of noise being made by the liberal consortium about Neomedia and its IP. Short answer to a very complex situation is tough tomatoes to all who complain about Neomedia's patents. If you wanted the IP for yourself then either file a non-complicit patent or develop a better mousetrap.
Two, why is the whole industry so cool toward what will eventually be the standard for which mobile marketing will be done. The answer to that question lies in the Scanbuy Neomedia litigation. Whomever comes out on top of that case will have a definitive advantage over the rest of the industry. Many have asked why Scanbuy has not simply desisted from marketing their own products even if they likely will lose the suit. Simple answer is that they want the money regardless of who they must answer to and they are willing to develop a part of the market that is not being actively pursued by Neomedia even if it means paying royalties. Those laying ground-roads in this market today will reap the benefits tomorrow. The Googles, Yahoos and Microsofts are waiting patiently for Neomedia to go bankrupt so they can swoop in and capture the IP but they know it is not that simple so they bide their time. Microsoft is the master at hawking a market and then waiting for the litigation to drag on. These events give Microsoft valuable insight into the nature of the market they are trying to steal. Every bit of evidentiary material gives them insight into how the intellectual property was conceived and how to circumvent it. Sometimes Microsoft buys the company and assimilates the IP and other times Microsoft runs the competition out of business and buys the IP a part at a time. Small price to pay for the real worth in most cases.
Most would have thought by now that either a Google or Microsoft would have snapped up Scanbuy or Neomedia by now and developed the market themselves but that is not likely going to be the case. It is important for markets to develop themselves and only time and innovation will allow that to happen. Google and Microsoft provide neither of those two things. Little companies make the big strides and land the big contracts. Look at Apple. They had to agree on a single distributer for the single most important gadget introduced in most of our lifetimes. Why is that? Because one is sure to say yes when all can collectively say no when it comes to contracts. Big deals need exclusivity to maintain momentum and Apple knows that. So does AT&T. Eventually the iPhone will be available through all carriers but not until Apple is into the 3rd or 4th iteration of the product.
From the CC today... "Higher resolution cameras are becoming more common in cell phones today and that number will rise in the coming years making megapixel cameras the standard and not the high end..." I would add to that autofocus camera with high resolution sensors will soon be the norm and not the high end. Auto-focus and high resolutions are the key to accuracy when it comes to interpretation of data on a camera phone. Without those things, algorithms and interpolation must be embedded in the application to compensate for the poor image quality. The curve of accuracy can be plotted to show that the current offering of phones, no matter how sophisticated the operating system or how high resolution the sensor consists of a product mix that is comprised of 85/10/5 of low res, high res and no image sensor, respectively. From a marketing standpoint, 90 of 100 worldwide don't have a camera capable of achieving the accuracy needed to obtain a quality interpretation of the scanned image. That number is changing every day, month, etc. This time next year, 2Mp sensors will be the norm on the low end instead of 1.3 and VGA. The curve will sharpen dramatically by fall of 2008 when 3 and 5Mp sensors reach the middle of the product mix. Until then, we are left with SMS on the low end and high resolution on the high end to market the PWC products.
Let's look at Newscorp for a second. I didn't notice many questioning the fact that NewsCorp put the 2D codes in a paper that people were already reading. Why click on the code if you are already reading the paper the code represents. This seems a little silly at first but the message is somewhat sublime. The barcode represents mobility much like the mobile phone is a symbol of mobility. The codes are all but useless in the paper but they must be put somewhere where people are looking first in order to gain not only acceptance but also recognition. Next, Newscorp starts putting the codes where people are and the papers aren't. Bus stops, Trains and Arenas are perfect places to capture the attention of people for a few minutes or more. Phones capable of taking advantage of such a thing, unfortunately, are not yet of the mainstream.
I know that the restructuring of the options made a lot of people angry but this company needs to do everything in its power to entice outside investors, executives and people with vision in order to see this mission through. Neomedia and the physical world players are on a cusp, so to speak, of technology that is capable of making what Neomedia wants to do a reality. The cusp, means the end of some things and the beginning of others. The road from here is bumpy and dusty and it must be paved with the blood of some so that others may pass. They made some critical errors last year when they thought that this market would mature more quickly than it has. It was mentioned several times in the CC today that some markets are in their infancy. That is true but they will grow fast once they are developed.
I am not trying to sway anyone one way or the other from an investment standpoint. I am merely trying to clarify what is really going on in the market with respect to connecting the physical world with the virtual world called media. I suppose we are all young or old enough to remember the days of 3 channels on our TV's. In a short time 3 became 30 and then 30 became 300. Most of us didn't notice the affect that 300 channels had on local advertising but the impact was great. Most of us didn't realize that the price of everything dropped, not because of Wal-Mart but because of globalization of certain markets. Most of us didn't realize that the service industry completely vanished and then was reborn in a few short years. Most of us will just make phone calls with our phones but a few will pave the roads to the new medium. Qode must do more than function on a phone, it must be functional. If not, then the user will pass it by. Many things must be firmly in place before any company launches a multi-million dollar campaign to market anything on a cellular phone. Airtime must be commodotized, content must be available and the infrastructure must be in place to handle the additional network traffic that will be used by millions of users everyday. Content and deliverability is the key to success and Neomedia has control of neither. Therefore, we must decide whether we can wait until those elements are in place and usable by the most average of users. After all, the most functional method of delivery will likely win the largest percentage of the market.
All in my opinion,
HTJ
As an aside, it sure is a weird day when Boknows is the most enthusiastic person on the board. For those of you who can, have patience. Be critical, if necessary but present solutions, not problems. We can sit around and talk about problems all day long and accomplish nothing. CC's like today are a start. Management knows that the shareholders do not want a reverse split and they will do everything in their power to prevent something like that from happening. Those of you whom have commented on this subject know of the peril that can follow a reverse split and it is a valid concern. Right now dilution is a concern and it will continue to be one until this company starts making some reasonable revenue. Only when the company is clearly headed in the right direction should one ever be considered and only if it were to the benefit of the shareholders and not the principals, again in my opinion. Let's get that CEO in here and get this company going in the right direction so when the technolgy is in place, Neomedia will be ready and waiting.
