Dov Moran probably wishes he never spoke of his aim of US$1bn in revenues for his company, M Systems. Or perhaps he doesn't. In the short time that I have known Moran, I have always been left with the impression that he is one of the most optimistic businessmen in Israel. This may not always go down well on Wall Street where investors and analysts like hard nosed realism, but no one would deny Moran the satisfaction he will take if he turns his company into the powerhouse he believes it can be.

But can it be? The cynics had the upperhand until Q2 of last year, when the company¿s core businesses looked in a terrible state. But this was compounded by the fact that some of his business areas, where the company had focused R&D, may never come back.

Suddenly, the company surprised many, including myself, by making its Q3 forecasts. OK, so much of this was due to the ramp up in the exciting DiskOnKey product rather than a total turnaround, but making numbers in this environment is a big deal.

And then, again, in Q4. And this time, DiskOnChip revenues were up. And low and behold, management have guided for increased revenues in Q1 to around US$11m. So everything is looking rosy again.

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Or is it? Dov believes that revenues in 2002 will grow by 30%. This won't be easy. If Q1 revenues will be around US$11m then to reach 30% growth revenues will need to average US$15.5m in the final three quarters of the year, not an easy target. Meanwhile, although the flash market is recovering, Intel are making huge strides into the set top box market, previously the most important market for M Systems. Additionally, there is already significant pricing pressure for its DiskOnKey product.

But the business area that could turn M Systems from a small company to a global leader is the cellular market. The company is already working with one handset manufacturer to embed its flash disk into high end 2.5G handsets. If DiskOnChip Mobile becomes some kind of de facto standard in this industry, then we will be off to the races. But that is still a big if. With 2.5G and 3G still providing much scepticism within the industry, who knows whether this will be M Systems ticket to win the lottery.

Nonetheless, M Systems enters 2002 in far better shape than 2001. DiskOnKey and DiskOnChip Mobile will both give investors an exciting ride in the next 12 months. High risk? For sure. Possible high returns? No doubt.