American Green Inc (ERBB)

[alj14]

Thoughtful and eloquent post, Sunnyday.

It has to be admitted that what was said at the SHM was far too optimistic, and the outcome has been a generalised fall in expectations. As you point out, the dominant sentiment, even among longs, is now fear and "buy on fear" is usually the correct line of action.

The core question here is the capability of SCMI and its two competitors (if there still are two of them) to produce the technology the industry needs. The failure in this respect of First4Internet needs no stressing --- for the moment they are out of the running and they have simply created huge problems for Sony, which could reasonably be blamed for being too uncritical of XCP, with its reliance on rootkits.

The substantial failure of Macrovision to supply adequate protection for CDs is shown by the weakness of the Totalplay technology, which has been used in North America only by EMI, and then only to a limited extent, while its DVD product Ripguard has, so far, been an almost total failure.

The only quality product is MediaMax, and, if SCMI can replicate in the DVD sector the superiority it has won in the CD sector, 2006 could well be an annus mirabilis. Naturally, the decisions of Apple Ipod will have a strong impact, as will the leadership qualities of Kevin Clement and the company's ability to conclude the merger quickly.

It is right to acknowledge past mistakes, but, in objective terms, the prospects for SCMI have brightened considerably.

alj14