jtdiii: The phrase is actually to "walk the talk," something that Fred Falk and the rest of e.Digital management have never done. They have always talked a great story, but have never walked their talk.
As I have said before, I believe a proper epitat for e.Digital would be: "When all was said and done... more was said than done."
As long as I have followed this stock, management has repeatedly given shareholders the impression that they are just about to turn the corner on past failures and that great things are about to happen in the immediate future ("soon"). Unfortunately, the great things that the pumpers further spin into being "HUGE" always seem to fizzle out. As you know this promise and failure cycle has happened over and over and over again.
IMO, things have not changed. The Softeq deal was 3 levels down from Disney and will never be spotlighted in a Disney PR. The margins on the deal appear from the last 10Q to be very slim and it is unknown if there will ever be future orders, or even if HP/Disney can by-pass e.Digital for future orders (a real possibility).
The APS deal is similar to the Softeq deal. e.Digital was paid to integrate DivX technology into a hard-drive based multimedia player and oversaw industrial design and manufacturting done by Digitalway. IMO, the gross margins on this deal will also prove to be very slim. As with Softeq, it is unknown if APS can by-pass e.Digital for future orders (another real possibility).
e.Digital has been claiming for the last 1.3 years that the device it is supposedly making for Eclipse (the HD1213) is on the verge of being delivered. As of 3 weeks ago the device was still not in production and was being "debugged" by Eclipse engineers. It appears that e.Digital may finally be able to recognize the NRE fees that were paid over a year ago, but will not be able to claim product revenue in QE 9/30/03.
Lastly, e.Digital claims to have a "multi-billion dollar" OEM ready to produce MP3 players based on the Odyssey 1000 platform for their own use as well as to be offered to other brands. Absolutely no details have been offered about the deal so investors are left to guess if it's nothing or it's HUGE.
So, e.Digital has created a temporary sense of progress since it will be able to recognize revenue from both Softeq and APS (as well as product revenue) in QE 9/30/03, and will "expect" revenue from Eclipse (and a reaminder from APS) in QE 12/31/03. But keep in mind that there is no known continuing revenue from any of these sources. QE 3/31/04 could be a total financial bust for what anyone knows at this point.
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