Can Woz Help Build Fusion-io Into the Next Apple?

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Sales are picking up at recently public start-up Fusion-io (NYS: FIO) . The company has even attracted the interest of Apple co-founder Steve Wozniak, who's served as the company's Chief Scientist since 2008. After a successful IPO in June, the stock nearly touched $37, almost twice its offering price of $19. While the company has given some value back, as of today it sits at $29 per share -- still a nice return for early investors.

Fusion-io has pioneered a new storage memory platform called shared data decentralization. By moving data closer to the CPU that processes it, the new design makes chips faster and more efficient. Hopefully, this technology's disruptive potential doesn't simply turn out to be a myth.

Big players already inhabit the competitive storage sector, and they're all trying to get more of the pie for themselves. Incumbents include solid-state drive (SSD) providers, like Western Digital (NYS: WDC) , STEC (NAS: STEC) , and SanDisk (NAS: SNDK) , as well as traditional data storage providers, like EMC Corporation (NYS: EMC) and NetApp (NAS: NTAP) . These companies probably won't take kindly to gatecrashers like Fusion-io and OCZ Technology Group (NAS: OCZ) .

The company recently reported impressive fiscal 2011 results, including its first-ever profits. Despite healthy gross margins, heavy marketing and R&D expenses kept Fusion-io in the red until this year. Bear in mind that those are fairly common growing pains for any tech company. Revenue for FY2011 rose 445%, from $36.2 million to $197.2 million for the year.

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Note: Figures reported on a GAAP basis.

You've probably heard of a couple of Fusion-io's biggest customers: Facebook and Apple. Facebook alone accounted for 47% of revenue in the first three quarters. Having such powerful custome rs is a double-edged sword: They lend the company's technology validity, but exert big-time bargaining power as buyers. Fusion-io expected sales to Facebook to drop this last quarter as it completed its planned deployments, so it's critical for the company to spread the word of its own merits to potential new customers. (Cue marketing expenses.)

Fusion-io is a pretty risky investment; it just became profitable, yet it already boasts a $3.2 billion valuation. However, I like the odds that this disrupter will shake things up in storage memory platforms. I'll be keeping an eye on this stock,  and I might just pick up shares amid the market's recent weakness.

At the time this article was published Fool contributorEvan Niuowns shares of Apple.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Western Digital, EMC, and Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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