Before you call your broker with the Nanosysnews, take a look at this.It's an excerpt from Nanosys'SEC registration statement, and should berequired reading for anybody who is contemplating an investment in apublic nanotechnology company. And, remember, Nanosys is considered oneof the most-promising of all the little nano firms. When you get to thebottom, take a look at some "good news bad news." (I added the company links below, for those who want more background).

Risks Related to Competition and ourIndustry

We face competition from companies in multiple industries, aswellas from the internal efforts of our current and potential partners and,if we fail to compete effectively, our business could suffer.

We compete in intensely competitive markets for end userproducts.The nanotechnology-enabled products we are currently developing willcompete directly with products incorporating conventional materials andtechnologies, including traditional semiconductors manufactured on thenanoscale. We believe our potential products will face significantcompetition from existing manufacturers in our current target marketsincluding:

• manufacturers of substrates for time of flight massspectrometryequipment, such as Waters Corporation;
• manufacturers of solar cells, such as Sharp ElectronicsCorporation and BP plc;
• manufacturers of thin film electronics, such as SamsungElectronics Co., Ltd., NEC Corporation and Koninklijke Philips Electronics (NYSE: PHG, News, Web); and
• manufacturers of memory products, such as Advanced MicroDevices,Inc. and Samsung.

  In addition, we may also face competition from focusednanotechnology companies, such as Evident Technologies, Inc., Konarka Technologies (Profile, News, Web), Nantero, Inc., NanoHorizons, Inc., Nanosolar, Inc.,Quantum Dot Corporation (News, Profile, Web), UltraDots, Inc. and ZettaCore Inc. (News, Web) and othernewly created nanotechnology companies.

Now, the good news: Nanosys is looking at a number of ways to apply itstechnology. Among them is nano-enabled memory for portable devices. Ifconsumer habits continue they way they have, current flash-memory technology will become just a memory. Nobody wants to be tieddown anymore. We want our MP3s, mobile phones and, probably in a fewyears our portable biothreat detectors, to stay with us, stay fast andstay cheap. Enter nano. The biggest nanomemory application of all might beportable gaming. Anyway, here's what Nanosys is doing.

Non-Volatile Memory. We are developing nanostructures fornon-volatile memory products for anticipated use in applications suchas digital cameras, MP3 players and mobile phones. To developnon-volatile memory products, we are collaborating with Intel. Weanticipate that we would manufacture the products resulting from thesedevelopment efforts and would sell them to our collaborators or othercustomers for integration into a non-volatile memory device.

Intel. Cool. Not a bad little company to collaborate with. But,then, here's the potential bad news.

We may also face significant competition from our current andfuture partners, such as E.I. DuPont de Nemours and Company, or DuPont,Intel and Matsushita Electric Works, which are assessing thefeasibility of expanding their development and manufacturingcapabilities and portfolio of intellectual property to incorporatenanotechnology-enabled components into their end user products. If ourcurrent and future partners expand their product offerings to competedirectly with our nanotechnology-enabledproducts or actively seek to participate as vendors in thenanotechnology-enabled product market, our revenue and operatingresults could be negatively affected.

After July 2004, Intel could decide that it really doesn't needNanosys Inside and just do it all in-house. When the big guys decide todo all the nano work themselves, that doesn't leave the little guyswith much except an asterisk in business history books.

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