Megazoo--- you nailed it in that Socket Mobile would be trading for a $30M market cap if people trusted them more. I've always said that there is a $1 discount in the stock price just for this. Who we kidding----there is pure junk companies trading for $30M market caps with no future and no real product. Socket has a future now, has $Billion dollar partners, and actually has good products.
I know for a fact that the CEO and CFO have been given specific orders by the B.O.D. to stop talking so much during the cc calls and be conservative. The CEO, Kevin, has a long history of over promising and under performing. It's why they are trying very hard to not talk about "big deals" and in the last cc call talk about "baseline numbers" (minus big deals). I think the CFO talks too much to shareholders though I have to say that as things have gotten better lately he's very closed mouth compared to before. I'm a strong believer in letting the results do the talking first and then you added on to that. I do know that they specifically hired that Director of Communication (10 years experience or so) to aid them in how they put out their message.
There are other scanners. The Motorola CS3070 is one of them. Honeywell has one. Another smaller player is Koamtec. What has given Socket the advantage (or head start) is their software development kit. You incorporate it into your software and it makes it easy to use. The most important thing about it is you click a button and the keyboard comes back up again on the tablet. You can't do that with the Motorola or the Honeywell and it's an essential feature. It's not me saying it either----it's why they have gotten so many developers lined up. Otherwise, a barcode scanner is a barcode scanner. Socket has differentiated themselves by coming up with the 1d vs 2d, all anti-microbial cases now, hard case vs soft case, laser vs optical, and lots of different colors. It's a smorgasbord of selection. Their competition has nothing like it. As Apple understands, aesthetics are important! Especially at the cash register if a retailer wants to make an impression to millenials.
What about other scanners replacing them in these software systems in the future?? Perhaps. But why would ShopKeep pay the money to have their software developers convert the software to use a Motorola scanner when ShopKeep only cares that their customers are happy? Socket's head start here is a real advantage in that it's hard to get them out of the software in the future. It's also why they went to Mexico production (from Asia) as it lowered their in house costs actually which allowed them to drop their prices last November (and makes their scanners very competitively priced). The CEO has said he knows competition will come---it's actually a positive because it means the market is exploding. I look at it that they are so small that just a solid market share means a lot of $ will flow to the bottom line with just that.
ShopKeep and Shopify are two of the partners who use Socket scanners exclusively. Shopify runs a monster of a business that helps small retail businesses do online stores. They specifically raised the $100M late last year to bring tablet POS systems to these stores. It's the idea of integrating brick and mortar into one software system that does inventory, customer tracking, inventory, check out, & accounting in the cloud. ShopKeep is a smaller business but they expanded into Ireland this year and are now opening up operations in Portland, OR for a west coast expansion.
I personally think the biggest partner Socket will have going forward is Verifone (and their GlobalBay Merchant system). NCR and their NCR Silver product is expanding with their new connection to Vantiv (which then connected with Sprint). It will be interesting to see if Oracle taking over Micros helps the Micros Kchng iPad system expand.
There are a lot of small businesses (NCR CEO estimated 4M in N.A. and 8M worldwide in an investor presentation in 2013), but I'd love to see Socket start to show up in mid-size national chains. The catch is that it's not up to Socket at all----they just tag along with the software partners. I do know the CFO has specifically said to others that there are multiple large orders (5000+) that their scanner is being considered for (no other details given than that). I have heard the Japanese Bread Co (Yamazaki who is working with Fujitsu) have been ordering more scanners this quarter in small quantities as they expand out their prior order. There are no hints yet that they will sign the definitive order for 28K more to expand into the next level of stores (Socket's CEO will know more in Sept/Oct). At least Yamazaki likes the product. The key is if they decide the scanner is essential for the next deployment. Eventually one or more of these orders will go through. Remember, it's the software partner that is essential. If the customer uses Fujitsu and Fujitsu recommends Socket than it will happen eventually.
Imo, the scanners are only going to grow for the next few years. At what level I don't know. Is this a $5 stock, a $10 stock or more? I used to think it was $10+ for certain, but I always had counted on the Somo being able to do $2M/qtr. If that was factored in now, this investment would be 100% different. What's good is the scanner growth is finally replacing the downward slide of the Somo and investors are noticing.
It's been a frustrating investment but one I've learned a lot from. I've found you really can become an expert on a company if you try hard enough. Trust me, the company knows who I am---at the Shareholder's Meeting last year they introduced me as "southacres" and all the employees had heard of me. I put my own representative on the Board last year which I chose not to do again this year after they dropped him as I didn't want to make a public display of dissatisfaction again---they dropped him because they were afraid I was going to nominate more people and go for a majority position---they know I speak with shareholders who hold over 1M shares total. They wanted to make it harder. I had threatened them with it once but wasn't really intending to follow up. I'm ok with the Board as long as the company succeeds. On the other hand, I've told them I may come back in 2015 at the Shareholders Meeting and "Carl Ichan" them if they don't get their act together! I want shareholders to be rewarded!
I do know they are very committed to keeping expenses low now and in the future and my pressure on them has played in to this.
My opinion is Honeywell (the former President of their barcode scanner division is a consultant now for Socket) or Zebra Technology (who now owns Motorola's barcode division & who is a hardware partner to Socket actually) will buy the company in time to just grab the market share immediately as it becomes obvious they missed out and are behind.
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