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While Axiotron, the designer of my favorite gadget, the Modbbook, is not dead yet — as of this writing, there is still someone deleting the link-spam that appears on their forums — nonetheless, they are on their last legs. For those who have not followed the Axiotron saga,
they have been in serious financial trouble since September 2009. They have failed to issue a financial report for fiscal 2009 (ending last Sept.) and failed to issue any reports for the subsequent quarters of fiscal 2010. For a publicly traded company, this is a big deal, and, as a result, their stock has been suspended from trading and will remain so until they come back into regulatory compliance.
In order to dig themselves out of their problems, they spent much of the end of 2009 and the beginning of 2010 trying to convince their lenders to reduce the company's debt eventually resulting in a June shareholder meeting at which all debt-holders agreed to exchange Axiotron's debt for company stock (See this press release of Jun 30).
Sounds great? Axiotron is above water again? Not so fast. It turns out that it does not have enough cash to pay the auditors it needs to get back into regulatory compliance (see Supplemental Bridge Funding in this news release of Jun 11). And so it goes, to keep the regulators at bay, Axiotron announces another date when it will be back in compliance, and, just as that date arrives, it announces yet another date for compliance. Anyone who has a been waiting for the arrival of the Modbook Pro will find this tactic familiar. Just as with the Modbook Pro shipping dates, there does not appear to be a plan to accomplish the task by the date announced, but rather, the date chosen just far enough in the future to make it plausible (Axiotron has recently announced another such compliance delay as of August 6th). That Axiotron has been completely unable to accomplish any of the tasks it set out for itself has caused me to lose faith.
And I'm not the only one. Consider the following graph of number of comments on the Modbook's Facebook wall from April 2009 to August 2010.
( Update: Actual number of comments for Aug 2010 is 17. Graph adjusted.)
Following Axiotron's announcement in June of another nine month delay for the Modbook Pro, interest in the Modbook has collapsed. You can see that at Axiotron Forums where new postings have slowed to a trickle. The same trend is present on this forum as well.
There are two bright spots in this sad story. Both derive from this quote in the circular they prepared for the June shareholder meeting,
The Assets constitute essentially all assets of the Corporation with a book value of approximately US$1,354,270.
Firstly, this implies their supply of Modbook kits is substantial, and, regardless of the Axiotron's fate, Other World Computing and other resellers will likely be able to build new Modbooks for quite some time. Secondly, the secured debt-holders could have chosen to liquidate the company and would, I presume, have recovered 40-50% of these assets, perhaps US$500,000, but instead, chose to exchange their loans for stock. Secured debt-holders are likely to know as much about a company as anyone outside of management. Perhaps they think the prospects for Axiotron aren't so bleak after all. Maybe the latest Modbook Pro ship date has a real plan to back it up. Or maybe Axiotron's bankers aren't so smart, and Axiotron has sold them a bill of goods. Honestly, given their track record, I'm inclined to believe the latter.
I'd love to be proven wrong. The Modbook is a unique device. In comparison with its competition, it is powerful and, because it uses a stylus, it is also accurate. The majority thinking on this follows Steve Job's quote:
If you see a stylus, they blew it.
In the short-run, that maybe right, but, in the longer term, it is not. A stylus is just a more accurate finger. As people doing things requiring accuracy want to take advantage of the convenience, light weight, and battery life of so called toys like the iPad, they will require a stylus (and a bit more power). Until the rest of the industry recognizes this, we need the Modbook.
I put Steve's stylus quote in the same category as his quote about iPod video, “I'm not convinced people want to watch movies on a tiny little screen.”
For the present, those who need a pen tablet computer, of which the Modbook is among these best, are those who need to draw, artists, teachers, and perhaps some engineers, and those who communicate using math, scientists and mathematicians. Although there are other solutions, none is as convenient as a portable pen tablet.