Dow Jones 9840.97 -17.49 10:27 am PST, November 04, 2003  NASDAQ 1958.73 -8.97 For info, visit access.smallcapnetwork.com S & P 500 1053.32 -5.69 To be removed, please click here Russell 2000 538.12 +0.28 VOLUME 03: ISSUE 68  Trading Alert coming: Playing the Telematics Sector, SUNW update. Stay glued to your email box. For our weekend edition, we are preparing a Trading Alert on an a very exciting small cap technology company that is not just on the cutting edge-- it may well be the cutting edge of the exploding Telematics sector. What is Telematics? It is way cool technology. A symbiosis of telecommunications and informatics, telematics involves the integration of Global Positioning System ("GPS") satellite technology and wireless communications technology--resulting in a new and emerging industry poised for explosive growth over the next 3-5 years. The technology is also known as M2M (machine to machine), but for simplicity we'll stick with Telematics. Until recently, Telematics has been virtually the exclusive domain of the automotive industry. And it is a big chunk. By 2005, 17 million vehicles will be equipped with Telematic chips that will allow tracking of fleet, rental and financed vehicles. The obvious benefits include theft reduction, as well as asset management and control. There are more than 600 million automobiles worldwide (144 million in the US) and 55 million being produced annually. Telematics applications are HUGE Currently estimated to be a $2 billion (USD) industry, Telematics is forecast to grow to $13.4 billion by the year 2005 (ref: Roland Berger & Partners)  within the automotive industry alone. Already, major companies such as General Motors, Ford and BMW have jumped on board, with both GM and Ford claiming that by the year 2004-2005 every one of their manufactured vehicles will be equipped with a Telematics device. This particular company of interest trumps its competitors. Instead of offering products that are both high cost and tend to have ongoing monthly costs--as has been the industry norm-- our target company delivers a 'stripped down' version of the technology. Its units have an extremely low initial unit cost, are small in size and have no ongoing fees--except, in the case of one product, which has a pay-per --use provision. The company's devices combine wireless communication with a web-based remote control feature that can facilitate a virtually endless range of functionality--whether the asset is a Porsche or a laptop.  Of its three current product offerings, the company has a one-way communications device that enables remote activation/deactivation of a vehicle or other financed asset. The second has the same functionality as the first but can be configured with two-way communication and other robust monitoring features. The third is a wireless anti-theft device that assures only authorized use. A simple key-fob transponder 'talks' to an automobiles wireless kill switches. If these technologies don't communicate the car can't start-- virtually assuring total protection against theft.  Protecting autos and just about everything else Although the auto market is vast, and represents potentially exponential Telematics application growth, this isn't even the really cool part. As the most 'mature' market--although still in its infancy-- for Telematics auto applications are the cake. The icing--translating Telematics technology to non-automotive applications-- is going to be thick and rich. And profitable for investors willing to take the risk associated with early involvement. The entire Telematics market, according to industry analysts Gartner Group, is expected to top $27 billion by 2005 and $100 billion by 2010. And where, other than autos, will one eventually find these chips in the future? Just about everywhere. Read on... The potential for theft and asset control within the auto sector, as we've said, is obvious--just think about the savings to the financiers of fleet autos with enhanced monitoring and reduced theft. But what about the hundreds of millions of other commercial and retail assets? From tracking supplier pallets shipped to Wal-Mart, to a bank or credit card company monitoring a financed computer, television, cell phone, tractor or Cadillac: an affordable robust technology that can not only monitor an asset's state and location, but also ensure payment would be an exceptionally desirable commodity. No? You bet it would. Example. Someone leases or finances an asset; be it a car, a computer or just about anything else. How powerful would it be to not only know where and what state that asset is in, but also have the ability, over the Internet, to shut off that asset in cases of late or non payment? And then be able to reinstate usage once a payment deliquency had been cleared? Certainly it would reduce abuse and payment delinquencies--some estimates project payment delinquencies could fall as much as 90 percent utilizing imbedded Telematic sensors.  And to be able to do it with an extremely low per unit cost? Further, name any insurance company that wouldn't want to locate and possibly disable a stolen vehicle within minutes,  long before it wends its way out of the country or into a chop shop. We have found a company with exactly this type of technology. Regarding Telematics, don't just take our word for it: "Commercial telematics will show the fastest market growth among all telematics segments and reach substantial penetration in six years," said Thilo Koslowski, vice president and director of automotive research for GartnerG2. "Successful market adoption will depend on the availability of low-cost telematics solutions and providers' effective positioning strategies." More information on Telematics is available here; http://www.telematicsupdate.com. Covering your assets. Security is a major aspect of Telematics. Trucking companies and large asset suppliers such as the military, have to know where their assets are, the state of the vehicle and whether it has deviated from its assigned long haul or delivery route. Telematics gives a company control of its assets where virtually none existed before.  We're not just talking about GPS capabilities, but a level of control that will enhance efficiencies and ultimately represent significant cost savings. In the New World, cost savings are as important as profits. Active monitoring of assets will become the norm within five years, as opposed to the current domain of those few companies that have emerged as early adopters of Telematics technology. Investors need to familiarize themselves with both the potential of the Telematics sector and the players. While there are a couple of hundred companies that produce Global Positioning/communications products--primarily for the automotive market-- we feel confident that we have found a situation for our readers that will stand out from the crowd, has extraordinary potential and trades for less than $1.00 per share. We'll see you on Friday. If you have to guess, we'll give you a clue: the company isn't Lojack (NASDAQ: LOJN).   MARKET NOTE Amidst a flurry of news and one of SUN Microsystem's (NASDAQ: SUNW) own executives declaring that customer capital expenditures have returned, the shares rose from our Trading Alert (about two weeks ago) level of $3.46 a share to a current price of around $4.40--an almost 30 percent return. It sliced through our resistance at $3.88 and moved smartly into the mid $4 range. We'll keep an eye on SUNW, and although we received some mail contradicting our call the detractors--so far--have been wrong. And for those who want to cop a quick profit, go ahead. This one promises to be a good trader. Raise your stop from $3.20 to $3.85. Excerpt from our 10/22/03 Trading Alert on SUNW: Sun is projected to lose 12 cents this fiscal year (as at January 2004) and 3 cents the following year. Any hint of good news on either the corporate or product front could translate positively against a stock price that has been stuck between $3 and $5 for the last year. Progress will likely be slow, but increased capital expenditure by customers, growth in the Linux area, Sun product division streamlining and improving sales should raise revenues and the prospects for the share price. Speculative? For sure. But then, what hasn't been on the ash heap over the last three years in one form or another? Maybe Sun will have a management shakeup. Maybe it will merge. Or maybe someone will buy it for parts. Or maybe it will eventually prosper. One thing's for sure: Sun's due for some good news or a substantive corporate event.       Take Advantage of a Special Opportunity. Get on Board our new Preferred Member List NOW, it's FREE! Important Note: This exclusive opportunity is FREE to all current SmallCap Digest readers. Now is your opportunity to join FREE and become a charter member of the SmallCap Digest Preferred Member Program. Need details? Read on... For over two years now, the unique approach of the SmallCap Network has alerted our readers to significant small and large cap profit opportunities, as well as extremely useful educational articles, market direction calls and trading strategies that have--and will continue to-- protect capital and enhance portfolio returns. Questions regarding our knowledge and ability to perform within the market? Review our archives and track record. Over the last year, our readers have continually expressed an interest in having the SmallCap Digest develop a Preferred Member List. 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