Backers of early-stage technology companies need a steely resolve, an abundance of patience and a healthy dose of blind faith

In the early days it's often impossible to discern the VHSs from the Betamaxes of this world, or to predict that WAP would soon turn to scrap but GPRS would catch on. Never forget that Commodore once ruled the home computing scene.

At long last, a ream of new technologies have begun to live up to their billing. Broadband is becoming widely established, 3G mobile is arriving and Bluetooth is blossoming. But what about some of the smaller, niche technologies that burst onto the scene at the turn of the century and what of the companies behind them?

OFEX-listed FeONIC (formerly known as Newlands Scientific) is a classic example of a small company boasting exciting technology and a multitude of product ideas, yet which has still to truly deliver.

FeONIC's business is centred on smart material, Terfenol-D, a compound capable of expanding and contracting when exposed to a magnetic field. This may not impress the technophobes among you, but the implications – as FeONIC's directors have been claiming for sometime – are intriguing.

The company may not own exclusive rights to Terfenol-D. It does, however, hold a number of patents relating to applications. So far three separate products have been launched, led by Soundbug, a small portable speaker-like product, which turns any smooth, glossy surface (be it a table, a window, or other similar item) into a speaker when jacked into a CD or MP3 player. Omnivox, meanwhile, is another sound product aimed at the business market and Whispering Windows is a futuristic marketing concept whereby product information and in-store promotions can be relayed to customers via shop windows.

The problem FeONIC faces is that, while this is all very impressive and despite a series of high-profile deals (with Lunn Poly amongst others), demand has still to take off. Interims to January showed sales up 98 per cent at just over £200,000, but cash reserves are dwindling and, at 10p, the shares now stand only marginally above a three-year low. Potential remains, though only the most hardened FeONIC supporters are likely to buy for the time being.

While FeONIC is making gradual progress and generating solid revenues, it is difficult to see too much short-to-medium upside at AIM-listed video streaming specialist Forbidden Technology.

Forbidden has long been a favourite of penny share punters and its technology, which enables video footage to be streamed over the internet without the aid of additional software plug-ins, initially captured the imagination for good reasons. Nonetheless, with broadband connections increasingly the norm and video footage (though still far from perfect in terms of quality) now easily downloadable on computers and mobile phones, it seems remarkable that Forbidden has generated less than £100,000 of revenue in its four years on AIM.

Although its £2.2 million cash pile affords room for manoeuvre, Forbidden will need to make a major breakthrough soon if it is to be taken seriously by investors.

Lastly, what of OFEX-to-AIM graduate Surface Transforms and its carbon fibre-reinforced ceramic brake materials?

Back in 2001 the company's prospects (or rather its profile) were being pinned on the success of a range of braking materials produced for a Formula 1 racing team. Unfortunately for Surface Transforms this deal had to be scrapped in early 2002 because the F1 team involved ran into a series of problems.

Media interest waned, the company has continued to go about its business and has signed a succession of deals in the aerospace and automotive sectors – a development contract with the US Air Force included.

Debt-free and with losses significantly reduced during the six months to November (from £794,037 to £159,109), Surface Transforms appears to be in good shape and retains decent prospects.