A Substantive Response To Airplay
I think Airplay has misunderstood the first PR. I don't know, of course whether the mis-reading was a result of sloppy reading, lack of comprehension, analytical weakness or deliberate. Whatever, Airplay, you use a classic smoke-and-mirrors method of critique.
Re: <<``…to become the leading EMS provider’’.
Airplay says:
"Mr. Marti, what does this mean? Leading? According to who? Or do you mean one hopeful provider among a great many?"
Response:
This new customer is a world leader in the mobile computing and wireless networking industry, which no doubt uses a number of EMS providers to produce its products. According to the press release ATQ will become, by 2004, this customer's leading provider "for several handheld mobile computing wireless devices, including new advanced RFID enabled versions".
Leading according to who? According to the manufacturing agreement just signed and announced. It is perhaps even more significant that ATQ is also being trusted to build newly launched RFID products in what is considered to be a high growth technology marketplace. Bear Stearns recently referred to RFID as the next technology revolution and First Boston is calling RFID a new "killer application." The market for RFID products is set to explode since Wal-Mart
has announced going full scale ahead in introducing RFID into its own supply chain management and directed its top 100 suppliers to be RFID complient within the next 18 months (these would be the Gillettes and P&G's of the world). The major retail industry is currently scrambling to meet these deadlines and/or to stay competitive with the Giant Wal-Mart chain, which hopes to reap $ billions in savings in supply chain efficiencies with RFID technology.
ATQ has obviously just passed a test period for this "significant customer" with flying colors. The PR says ATQ began providing EMS services in March '03 and now has achieved the "longer-term business relationship" it was seeking with this customer.
Re: <<``…expected multi million dollar value.’’
Airplay says: "Mr. Marti, just what is the value – 2 Million?>>
Response:
According to the press release the value of this relationship "will make this multinational customer Adeptron's largest client to date". Do your homework - he is not talking $2 million.
Airplay asks: <>
Response:
First of all ATQ has been signed as the leading EMS provider for "several" handheld mobile computing wireless devices. These are already established products, ATQ has NOT just been signed for a product not yet launched. IF YOU READ (properly!) the press release you will see that what is new is that some of these established products are becoming RFID enabled versions - providing
the end-user the option of including RFID capability in addition to the existing applications of the devices. The PR specifically mentions use "in the retail industry for real-time access to inventory management and supply chain information." So this is a fit with what we know is happening with regards to RFID adoption in the retail industry right now and will perhaps expand markets and increase sales of this ATQ customer's existing products. Again this is obviously a highly strategic new product innovation for the
customer - and they have just signed ATQ to build it for them!
Secondly, thanks for mentioning the contribution margin. "Adeptron will provide a full-spectrum of electronics manufacturing services on a turnkey basis." This is exactly where Marti wants to take this company. Even I know that turnkey contract manufacturing carries much higher gross margins; all those services to be provided - " new product introduction and rapid prototyping, design for manufacturability analysis, materials procurement and supply chain
management, manufacturing, product testing, logistics, and warranty and repair services" have revenues attached. Bravo Marti!
ATQ is beginning to deliver on its promises and is looking more and more like a very promising turn-around situation, with a management team that can sustain and accellerate growth in the future.