Alien Technology has gone from deferring its IPO on a day-to-day basis to shelving it indefinitely.
The RFID vendor, which had been granted "RFID" as its would-be Nasdaq symbol, announced yesterday that it has "determined not to proceed with the registration and sale of its common stock at this time."
Alien CEO Stav Prodromou made the following statement:
"Alien has decided not to proceed with an IPO at this time due to market conditions. While we are evaluating the options for our future financing needs, we are taking prudent cost reduction actions to continue to effectively manage and grow our business and support our customers going forward."
Alien has not been profitable, and it does not appear poised to change those circumstance in the near term. An IDC analyst has said the company continues "hemorrhage money." The RFID market, moreover, has not met the early growth projections of optimistic market analysts, and Alien has failed to meet growth expectations it had set for itself previously.
Worse, reports about allegedly low chip yields, and speculation that the company was selling products below cost contributed to a growing skepticism that the company could meet with the success on the public markets. Some market watchers believed the IPO, prospects for which grew dimmer by the day, was doomed when Texas Instruments earlier this past week released a UHF RFID chip that stands to take business away from Alien.
Technology IPOs have been few and far between lately in North America, and it appears one won’t be forthcoming from Alien Technology.
The company probably will have to resort to revisiting its venture investors, who won’t be happy about having to shell out more money but also won’t have many options. They could try to sell the company, but it’s not obvious that a buyer is waiting in the wings, and it is even more unlikely that any buyer would pay the multiple the investors had in mind when the company embarked on its ill-fated IPO odyssey.
Microsoft has responded to a report in the New York Post (when did tabloid newspapers start covering the technology industry so assiduously?) that suggested the release of video capabilities in the Zune media player would be delayed.
According to Microsoft, the report in the New York Post, which alleged video support for Zune would not be ready on schedule, is "speculative."
That doesn’t sound like a denial, though, does it? Speculation is not always factually incorrect, and Microsoft has left enough ambiguity in its reply to cause one to wonder precisely what features and functionality Zune will provide when it makes its debut later this year. The array of features Microsoft initially promised, seeming to address nearly anything remotely relevant to a multimedia experience, will be pared as the company and its product managers come into conflict with reality, especially the essential elements of time and space.
We shouldn’t be surprised at delays and missteps in Microsoft’s Zune rollout. The media-player market will prove daunting and difficult for Microsoft. The Apple tandem of iPod and iTunes has a huge lead in the marketplace, and Apple’s brand, evoking stylish aesthetics and design excellence, will prove hard for Microsoft to match, notwithstanding the relative competitive success Microsoft has enjoyed against Sony and Nintendo in the game-console market.
Unfortunately for Microsoft, Apple is not Sony, which made a succession of bad moves over several years, and the media-player market is not the game-console space. Apple won’t hand Microsoft half as many gifts and opportunities as Sony provided. Microsoft will have to get its design focus and its marketing campaigns exactly right with Zune, and the early indications from Redmond don’t inspire confidence, despite the intensive investment the company plans to pour into the endeavor.
Expect Microsoft to struggle for a long time in this market before it put together the right ingredients and gets it right — if it ever gets it right. Apple and others, including Microsoft’s erstwhile hardware partners, will not be sitting still.