Imate profit warning

Imate's profit warning seems very familiar. It's blaming supply problems. The market is there - but it can't supply it, as a key component is not coming through.

The shares are down 40 percent. And no relief is in sight; the problems are likely to continue in the first half of next year.

Supply problems always seem to wrong-foot the analyst community. For some reason, the City doesn't seem interested in supply chains - just in sales.

Now for retailers, let's say, supply chain usually isn't a huge issue. If you can source knickers from China, you can just as easily get them from Tunisia or Poland. As long as the elastic works you should be OK.

With technology the issues are very different. The quality bar is much higher - and a shortfall in quality can be just as damaging as complete interruption of supply. Where unique components are being manufactured to a specific requirement, and particularly in fast moving areas such as wireless and IPTV, switching source isn't easy.

I started this blog entry by saying the problem seems familiar. Anybody remember Trafficmaster's issues with sourcing of components for is Smartnav system back in 2004? or Jessops blaming difficulty getting hold of DSLRs for its subdued Christmas sales figures this year?

Perhaps we should be asking management how they manage their supply chains. But we're not. Companies are required to disclose their hedging of foreign currencies but they're not required to put any mention of their sourcing policies in the annual report. Which is really more important for a tech company - a 5% variance in this year's profits, or the entire business strategy belown to bits?