Friedcat said the profit margin would be one digit next year. It's friedcat saying it, not me.
I think the majority of people have misinterpreted this comment, if you read it more clearly it has the opposite connotation, AM is preparing itself so that Gen2 will be competitive even if the ASIC manufacturing industry is faced with single digit % profits. do you see the difference? They will produce Gen2 at a low enough cost that they can chase the margin down to single digits to squeeze the competition. I think the interpretation that GEN2 will be produced and out of the gate only see single digit % profits... i find it laughable that anybody could have made this assumption. my 2 cents.
In a mature industry margins are squeezed to zero. The only exceptions are brands, which command a premium. ASICs are becoming commodity hardware and over the whole industry, at the margin, the margins will be driven to zero. In this sense the bears are right.
Asicminer has both early mover advantage, which is short term, and the advantage of having personal relationships with manufacturers in Shenzen to produce hardware at cost. The latter is 'invincible' and it is this you are investing in when buying shares in Asicminer as a mining company. In addition, friedcat has proven adaptable and an astute strategist. There is also a hope therefore he can create new value opportunities as a businessman.
Others' advantages could be hosting costs/power. The franchising model hopefully can marry this with friedcat's manufacturing advantage.