Years ago, I took a class on IPOs, where the professor (a Wall Street lawyer) said that if you ever actually read and believed the "risk factors" in a company's SEC filings, you'd never bother to invest. They're supposed to be the the absolute worst case scenarios, laid clean, so that any investor can't claim they were blindsided should everything go wrong. In fact, companies are often pushed to make the risk factors seem as scary as possible to avoid the possibility of a later lawsuit. However, as scary as you make them, that still doesn't mean that companies are doing a very good job figuring out what risks are really on the way. Joe Weisenthal does a nice job looking through a bunch of historical financial filings from companies as their market cap peaked to see if they accurately noted the biggest challenges to their business -- and found that they often do not note even the most obvious (in retrospect) challenges. For example, the big newspaper chain McClatchy claimed that the biggest threat to its business in 2005 was the cost of newsprint, barely noting the impact of the internet on any newspaper's core business plan. And that's in 2005 -- not 1995, when it first should have been occurring to folks at newspapers that the internet represented both a threat and an opportunity. He also checked out Microsoft's filings, noting that the company has been incredibly slow to recognize that Google was a competitor in its risk factors listings.

Of course, this raises some interesting questions. Are these companies really missing these threats? Do they start out so small and grow so fast that companies really are taken by surprise? Is it only in hindsight that it seemed obvious? Or is it that the companies don't want to admit these emerging offerings are really threats until they absolutely have to? And... if that's the case, who are they trying to deny the threat to? Themselves? Or their investors? It may be a little of all of that -- but it stands to reason that the denial runs across the board -- and part of it may simply be that companies don't want to admit that these "upstarts" are threats because it could actually serve to legitimize the threat and even accelerate it. Either way, it should make you question just how useful the "risk factors" really are. Even when they're designed to be as conservative as possible, they may actually be used to hide the real threat. Perhaps we need a more open sourced/Wikimedia approach to risk factors. I'd bet that in 2005, if you asked a bunch of knowledgeable folks about McClatchy's risk factors, they'd have named the internet ahead of newsprint costs.

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Filed under: Robots

While we thoroughly enjoyed hearing of EMIEW's (presumably) short-lived career as a hotel clerk, it looks like Hitachi's EMIEW 2 has some seriously large aspirations. In a recent demonstration in Hitachinaka, the two-wheeled robot wowed onlookers as it received commands wirelessly and happily ran office errands without too much trouble. The creation, which stands some 31.5-inches tall and weighs 29-pounds, did crash into a desk and stand motionless momentarily while being previewed, but developers didn't hesitate to inform the crowd that kinks were still being ironed out. Nevertheless, it was able to avoid obstacles while rolling about, understand and respond to human speech and move around for an hour before needing a recharge. The company refused to spill details surrounding its eventual price and release date, but we're hearing there may soon be an open spot in Scranton that this fellow could certainly fill.

[Via Inquirer]

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Office Depot Featured Gadget: Xbox 360 Platinum System Packs the power to bring games to life!

Filed under: Cellphones

After a few days of investigation, it looks like Motorola and T-Mobile have figured what was behind that nasty Sidekick Slide bug that caused the devices to shut off when flipped open. According to our friends at Moto, the root cause was "a minor issue relating to the battery contacts," and a solution is being tested right now and should be available by next week, when Slides are expected to go back on sale at T-Mo stores. A speedy resolution, to be sure, but we're still amazed a bug like that got through in the first place.

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Office Depot Featured Gadget: Xbox 360 Platinum System Packs the power to bring games to life!

No two-person control or complicated safety features: until 1998, you could arm British nukes with a bicycle lock key. To arm the weapons you just open a panel held by two captive screws -- like a battery cover on a...

I agree almost entirely with Tim Lee's assessment of the Kindle e-book reader, posted Monday on these pages, but as a wireless and telecom analyst, there are aspects of the device that are interesting and important - unfortunately for Amazon, they aren't going to help make the Kindle a success. The most interesting factor is that Amazon is basically launching an MVNO, called Whispernet that will use the Sprint EV-DO network. It certainly won't be the first MVNO on Sprint, and it won't be the first mobile device maker to brand the wireless service as their own (think Palm VII's Palm.net, or Blackberry.net when they both resold Mobitex service). But the Kindle is one the first mainstream consumer electronics device we've seen that is not a computer and not a phone but which still connects to a mobile broadband network.

This portends a future (that Sprint has been talking up a lot lately with WiMAX) where myriad consumer electronics devices like cameras, GPS devices, sensors, signs, etc. all connect to the "cloud" and have service either bundled in retail prices, or into some other service fee like Amazon is charging for content. This kind of device is a break from the normally carrier-controlled handsets we usually see, and is interesting for that reason alone. It's also a break from the $80 rule, where non-phones can only connect to cellular data for $80/mo. Since the Kindle device has limited Internet functionality, Amazon can predict average monthly EV-DO throughput per device, and negotiate a much better wholesale data rate from Sprint than $80, and can then afford to bundle that into content pricing. Don't get me wrong -- I don't agree with the content pricing on the Kindle. But the launch of an "Open Access" consumer electronics device with wide area network access bundled in has got me excited. Imagine now a GPS device from Garmin or TomTom that comes with a cellular radio for traffic updates, local fuel prices, etc, and the data plan is bundled into the retail price. Wow! Consumer electronics devices that could work right out of the box with full mobile connectivity, and a carrier that is willing to wholesale reasonably for that network connection! The times are finally changing.

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A full festival will open tomorrow to discuss 'radical hedonism in man-made communication.'