Hard drives are driven by industry giants
Similar to Skullcandy Inc (NASDAQ:SKUL), OCZ Technology Group Inc. (NASDAQ:OCZ) is a smaller contender in a highly fragmented and competitive market. A designer of primarily solid-state drives (SSDs), OCZ has faced financial difficultly and NASDAQ scrutiny as the company has failed to maintain listing and earnings submittal requirements.
The company appeared to fit right in with market trends a couple of years ago as SSDs have become more popular with more mobile options for consumers. It is hard to gauge where they are financially, however, since their last official quarterly report was July 10, 2012. Since then, there has been somewhat a cat-and-mouse game going on with shareholders, NASDAQ, and OCZ Technology Group Inc. (NASDAQ:OCZ).
OCZ Technology Group Inc. (NASDAQ:OCZ) had made estimates in the $130 million-$140 million range for the August and November 2012 quarters, but gradually reduced expectations and skipped on submitting official earnings entirely. It later reported unofficially that revenue for those two quarters was in the $65 million-$85 million range. Preliminary results for the first quarter of this year were estimated to be $50 million-$55 million in revenue. Putting together the puzzle pieces with the fact that the previous five years of recorded quarterly earnings have all produced negative income but one quarter, it is likely that the business is in critical condition, and OCZ Technology Group Inc. (NASDAQ:OCZ) knows.
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Concluding thoughts
Industry fragmentation can be the worst enemy to a company. The Wendy’s Company (NASDAQ:WEN), Skullcandy Inc (NASDAQ:SKUL), and OCZ Technology Group Inc. (NASDAQ:OCZ) all provide products that sell. However, Wendy’s faces the reality that the changing fast food landscape and time may have passed them by from their golden days. Skullcandy’s story shows that fads do indeed follow the definition of the word and styles are short-lived. OCZ presents how hard it is to compete in the tech industry when far larger companies with much larger market caps have the resources to slowly push smaller companies out entirely.
Michael Carter has no position in any stocks mentioned. The Motley Fool owns shares of Skullcandy.
The article Industry Fragmentation Will Cause These 3 Companies to Surrender originally appeared on Fool.com and is written by Michael Carter.
Michael is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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