The new software could cover a lot of ground. Loading data onto chips continues to be a fairly high end operation. But the real growth will come from ancillary features like process control and tracking to thwart piracy and other forms of intellectual property theft. That business promises to make a lot of money right off the bat. It also could boost Data I/O's hardware penetration. Competitive offerings will be able to perform the data loading but the value added software probably will be available only on Data I/O machines.
We are raising our 2012 earnings estimate by 25% to $.50 a share. A stronger performance is possible if direct software sales take off, or the software leverages demand for the company's hardware. Data I/O intimates the new products could expand its potential market by 1,000% over the next five years. If that's even remotely true these shares could produce exceptional appreciation from current levels.
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