Yeah... that must be why Staples and Fujitsu chose to work with them... ???
The realities that matter here are that it works, that they can make it work better, are doing that, and no one in the market has anything that works better...
After that... two limits: Customer decision making timelines in big box retail is ponderous. Cost is an issue. They likely aren't going to see sales taking off until they can solve the cost issues... and see larger customers adopting the solution across large markets.
There are three ways they have to address that need. One is by changing the product designs to enable lower costs in the manufacturing. Another is to change the relationships that define how the product is made and what it costs to make it, to enable manufacturing that is scalable, with cost reductions tied to volume. The third method pairs with the other limit... that whatever the design or manufacturing costs per unit, you need large sales to lower per unit costs. Likely they will need to see multiple larger customers deploying widely in order to have volume lower per unit costs to the point where the critics have nothing to complain about...
That leaves them still largely dependent on partners... Staples (deployment decision) and Fujitsu (sales support)... to help them generate the sorts of coordinated efforts you'll need when many customers are necessary to enable lowering cost with large quantity production.
It also leaves Staples as more or less both the cause of their problems, as well as their primary opportunity. If Staples wants to implement the system, but first wants to lower the costs ??? They will need to buy in volume to help lower the cost ??? Chicken and the egg issues ??? They need to make the decision to implement system wide themselves in order to lower costs to the point where they want them to be... and if they won't make that decision, it isn't likely that anyone else will sign onto the effort necessary to lower costs.
I expect that makes the ongoing cost containment efforts at ABSY the critical feature that will define the timelines from here. It leaves you needing to know what Staples will have as their real decision criteria, and needing to know how ABSY is doing on product development and coordination of manufacturing elements that will be needed to lower cost with higher volume. Until then, it looks mostly like Staples is trying to squeeze all the blood they can out of their suppliers...
It doesn't look to me like Staples is giving up on this, rather than working to figure out how best to do it... and when.
Meanwhile, it still looks like ABSY has found a way to survive and even be profitable at lower volumes by addressing niche markets with smaller scale production... while waiting for the larger partners to get their decision making processes through to the end of the process pipeline...
If ABSY can lower the cost of designs or of the contract manufacturing of their components, below Staples threshold... or, if change in the markets or competitive landscape changes the threshold... they should see big market relevance occur in a hurry... and the impact to ABSY of the shift in the transition will likely be wired in before a decision is made.
Pinksheets says 23,450,000 as of Apr 30, 2006. Looks to me like they've sold not more than 15 million shares in the last three years... so call it maybe 38.5 million in the float... while assuming there may be some PP shares or insider holdings that are not reaching the market.
I don't see that management has any ability to "manage better" to solve the market problems that tend to be their limits. ABSY won't change how big box retail makes decisions, and the ABSY tail won't wag either the Staples or the Fujitsu big dog... which doesn't mean that what ABSY is doing isn't going to work... with the partners they have... in the time it takes.
Success with Staples and Fujitsu in the long term also doesn't seem that it generates any particular limits on ABSY now... so, there is also potential that they will find other partners, other customers, or other ways to address the markets that use what they have in ways that will help them overcome the limits they have now. Looking at the others in their market, I still don't see any that have the sort of risk/reward that ABSY has.
I'd still not recommend anyone bet their life savings on ABSY... given the level of risk that clearly is the sort that comes as an inherent fact in the single customer dependency. But, I'd also point out that betting against ABSY succeeding is also betting against Fujitsu and Staples... which still leaves me thinking that the potential reward with a deployment decision by Staples makes it worth taking the risk with a small stake...
