Value Microcaps Zip Code Changers

[southacresdave]

SCKT...potential HP market opening up for them.....

A poster who I've communicated with on Yahoo was able to get an idea of the size of the HP Ipaq market that HP has just discountinued (and SCKT is trying to to make their Somo 650 the defacto replacement for it). In 2009 it was $172M, in 2010 it was $87M (obviously decreasing due to HP putting far less effort into it. HP stated all the way back in 2008 that they were going to phase out of the iPaq business---it's why SCKT targeted their SOMO 650 unit as a replacement and oriented 1/2 their business that direction).

I'm sure the market for the iPaq will be reduced in the future, but for businesses to switch away from it means a hardware AND software change AND training costs. That can be expensive. Now that SCKT seems to have their LCD screen shortage problem fixed (they have 20K units coming in early August), they can show the market that they are a worthwhile replacement for the iPaq.

Right now SCKT is EBITDA positive. In 2010 the iPaq market was $87M. Even if SCKT could get $15M from the HP iPaq discontinued industry/year and add in the additional sales of their soon to be "Apple Certified" hand held scanner, revenue could double in the next 1-2 years and profits increase significantly---especially with gross margins of 42%+ and their emphasis on low overhead (it helps that SCKT has a LOT of tax loss carry forward to use).

Recent CC Call: http://seekingalpha.com/article/282016-socket-mobile-ceo-discusses-q2-2011-results-earnings-call-transcript?source=yahoo

Still LOTS of risks and unknowns to play out. At current price it is an interesting stock to say the least.

Dave