Pace Micro operates in a sweet spot of the hardware sector, but its shareholders would hardly have noticed.
Four profits warnings and disappointment today in a sector which continues to demand better and better hardware has gone on too long for the blame to be laid at the door of the market. Pace’s shares, which plunged in the dot-com boom in 2000, have barely recovered, despite a six-year roller coaster ride.
Delayed shipments have weighed on sentiment, with the latest warning coming in May. All this when its target market has been growing like topsy as cable and satellite broadcasters want more bells and whistles to upgrade and extend services.
The roll-out of satellite television in emerging economies provides an opportunity for Pace to increase unit sales . The sheer scale of the US market is breathtaking, but progress here has been limited.
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And that’s before talking the potential of high definition broadcasts. Shareholders are likely to demand a lot of new chief executive Neil Gaydon, appointed in April and who had been with the group over a decade.
They are unlikely to give him much more time to prove he can deliver.