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.
I agree with the part about the mature industry, but what the time frames that i am talking about are the next 2-6 months (rest of this year to say end of Q1 2014) we are still going to be in double digit returns territory, even in bitcoin that seems where time seems to move like dog years, we won't mature that fast. But this is all besides the point, what i was referring to is the interpretation of the message from FC, I don't think they are predicting single digit returns, I think they are forward thinking, again to the "invincible" manufacturing costs.
Lets look at it this way, and i'm not saying this is the only way, but lets try and see if we can get an eye into the mind of some of these different ASIC competitors, one of the reasons I like AM is that they are going for "invincible" manufacturing costs, they aren't trying to produce a 10 Th chip the size of a playing card, instead they are using smaller chips with, and this is a guess, lower $/th production costs, meanwhile all the competition is talking about their gen2 products being monster chips, i have a feeling AM is going to break this trend and will come out with a smaller chip and an ultimately lower cost/unit and cost/Th. In a year or two, when ASIC manufacturing start to approach "mature" industry status, it will be the cost/Th of the units that come out in the next couple months that determines who will be a viable player, and who will not.