Wednesday, September 16, 2009

Report: Microvision Held their Annual Shareholders Meeting on September 15th, 2009.

I wasn’t there at the Annual Shareholders Meeting.  However, there were some folks that I know who attended the ASM meeting.  In a summary form and after having resolved the contradicting statements of these participants, this is what they had to say in essence…

• Actually it was quite a good annual meeting and was well attended.

• We were impressed with the PicoP projectors on display. The image has really been cleaned up substantially and looked quite good….very much a real product.

• They had units connected to a variety of things like iPods, iPhones and some laptops… each demonstrating the ease of use, direct downloads from the internet etc. There were some questions about Apple. Our take on Alex T’s answer was something like: “Apple World loves us and we have to be ready… I just ask you that you be patient.” In all probability, Microvision is in talks with “Apple”, however, there isn’t enough unit volume of PicoP display engines for Apple’s appetite at this time to be engaged officially.

• Finally an annual meeting with some smiles all around. Was that due to the very funny and light hearted video being projected… hard to differentiate. However, the mood was very upbeat and reassuring.

• PicoP display engine units will begin shipping about, as Alex said, in the next few weeks and the three (3) customers they have contracts with will be announced in something like the same time period, plus or minus.

• Obviously units between now and the end of this year are going to be scarce and how they are allocated is still being worked out.

• They [Microvision] tried hard to get names [of the 3 customers] for the press release but it just wasn’t possible to make the deadline. But the names should be decent.

• All in all, you have to call it a very constructive meeting and somebody else must have thought so too… given the action of the stock and the volume today.

• We are sure there are lots of comments out there and maybe some different opinions, but we think the ship is moving and finally leaving the port for uncharted waters of PicoP Ubiquity. It will take a while to pick up speed, because of shortage of light sources, but we should see improving news going forward on a reasonably regular basis.

There were a whole lot of other comments with different flavoring to the less critical questions and the following is my take on that…

• Much of what used to be called speckle in the image turned out to be electronic interference and has been eliminated with the latest version of the chips.

• Image quality is much better than what it was before…
• The news from ASM is good… but tempered by the fact that GL light source supply [from both Corning and Osram] is still a very big issue and Microvision will not really get a handle on that until some time in November or so.

• The Press Release from this morning states…

“Microvision Announces Commercial Launch of SHOW WX Laser Pico Projector”

Here’s the link…
There are two tit bits of information in the Press Release that we have not seen before. The first: “Microvision expects to begin product shipments in the next several weeks.” And the second: “Depending on the ambient light, the projected images range in size from 12” to 150”.”

• Is it good news or bad news? In our opinion, this news is good.  How great the news? That is debatable based on who is looking at it… and what investment horizon they have in their mind?

• Finally, after years of waiting for Green Lasers from its supply chain partners, Microvison today announced the long waited laser PicoP Projector for a market that consists of over 2 billion digital devices yearly as potential candidates for adoption.

• To those in the know, it means the Green Laser from Corning and Osram have reached the phase 2 optimum level of 100mw or higher, ASICs are functioning beyond the design expectations in reducing noise and speckle… there are no technological issues with the Green Lasers… and production is ramping-up nicely

• “Depending on the ambient light, the projected images range in size from 12” to 150”.”  To us, this means the brightness of the images has improved to higher levels where 150” diagonal image projection is now possible in certain ambient light condition?  If that is indeed the case, as I suspect it is, then it certainly makes it more appealing to the consumer that is looking for HD image experience in large screen format… and at miniscule energy consumption of a laser based projection technology that is always in focus.

• “Microvision expects to begin product shipments in the next several weeks.”  Some may consider this announcement as another delay and will be disappointed. But the truth is, and perhaps a revelation of these folks ignorance, that a high-tech product is much more complex and requires two steps to a successful “product launch”… just like Corning did with their Green Laser G-1000.  Corning launched their Green Laser G-1000 in May 2008… but did not sign an agreement with Microvision until May 2009.

• What was announced to-day is called “initial product launch”?  Microvision has just finished the first part [product development] of a eight part high-tech product marketing and product launch strategy. Launching a high-tech product like SHOWwx is more complex and requires many a “ducks” to get in line… as compared to launching a mass produced consumer product like a “cereal” or “energy drink”.

Just because the product─ PicoP display engine and the SWOWwx─ is ready doesn’t mean there are no more challenges and hurdles that need resolving. Here’s the list of challenges still facing this company and that’s what, in my humble opinion, may still take a few weeks at least to resolve...

Intellectual Property: You must file your patents and secure your invention records [as proof] to protect your intellectual property. Once the product is launched and is in the hands of your competitors [and pirates] you are sure to invite those who will reverse engineer [and infringe upon your rights] to copy your product… and steal your best employees.

Product: This is the most important part of your entire marketing campaign. Without a great product you don't really have much to work with. For this reason you have to make sure that you have got your market research right. It is very important to make sure that you have met all the requirements that a consumer would want in the product you are offering. You need to make sure that all your products are of great quality and that can be relied on as well… and achieve the trust of your customers. The product you are offering will be the so called first impression on your company's reputation. For this reason it is very important that you get everything right. The main goal in terms of your products is to meet or exceed your customer's expectations.

Supply Chain: Most high-tech products have several supply chain partners. In case of a mass produced product, such as PicoP display engine, all supply chain “ducks” must fall in-line, and kept in-line, to assure volume production and consistent quality over long periods of time… day-in day-out.

Product Price: This is also quite an important factor in more terms that one. Seeing that you will be competing against other competitors, you have to make sure that you offer a price that will make customers want to come and buy your product instead. Don't just price your product out of thin air. Make sure you do your market research and based on the quality and benefits of your product, price your product [both OEM or branded] accordingly. When the production volumes are low, as is the case with PicoP display engines right now, consider offering differentiated value for premium prices.

Packaging: The packaging of your product is also like the first impression of what you have to offer. You need to make sure that your packaging is both attractive and safe. Safe in the sense that it provides adequate protection to the product it is holding. Unless you have an attractive packaging, you won't be able to attract possible customers.

Sales Channels: This is one of the most important factors when it comes to the actual launch of the product. You need to decide on the perfect location, or distribution channel, or a combination that will allow you to maximize the possible customers, maximize margins, optimize sales channel cost, and leverage & network human and financial resources.

The Company plans to distribute its accessory pico projector product through three sales channels: OEM branded products, Microvision branded products sold through international distributors and Microvision direct sales through its on-line store. Microvision has signed several marketing and distribution agreements with international distributors in Asia and Europe to launch Microvision branded and private labeled versions of the laser pico projector.

Warranty, Service & Support: Offer realistic warranty that leverages the reliability features of your product as differentiated value and have the “service & support” infrastructure in-place before launching your product.

Promotion: This has a key role in advertising and the launch of the product itself. You need to carefully decide on the approach that you will promote your product in comparison to your other competitors.

Intel has become one of the world's most recognizable computer brands following its long-running “Intel Inside” campaign. The campaign, which started in 1991, was created by Intel marketing manager Dennis Carter. The five-note jingle was introduced the following year and by its tenth anniversary was being heard in 130 countries around the world.
“Image by PicoP” is, or so it seems at this early stages of Microvision’s marketing campaign, the slogan [or the champion theme] for its line of laser based PicoP Display Engines. With the commercial launch of SHOWwx today─ the world’s first laser based Accessory PicoP projector─ the Microvision company has laid the foundation for its future marketing campaign by embracing “Image by PicoP” as its champion theme.
“Intel Inside” campaign is considered as the most suceesful and key component of Intel’s marketing strategy responsible for the ubiquitous status of its CPUs in the personal computer market place.

How well the “Image by PicoP” campaign will work for Microvision’s PicoP Display Engines remains to be seen as its just the beginning of the journey to achieving the ubiquitous status in the Pico projection market place… that consists of over 2 billion digital devices as potential candidates for adoption.  Here's an article on Image by PicoP & Ubiquity worth reading...

A good number of Microvision investors continue to demonstrate that they have no clue as to what it takes to bring a disruptive high-tech product to the consumer. As early as this morning, there were those who were throwing temper tantrums because their “self created” company milestones were not met. Someone very eloquently said: “Alex is not some used car salesman trying to rip people off.” He’s the real deal.  Based on his (Alex Tokman - CEO) comments and the way he expressed himself, he sincerely believed that December 2008 stretch goal could have been met… if Corning did not get ahead of itself in projecting green laser availability.

Alex T seems to have learned from this and is being very careful about sharing his expectations for HUD, Eyewear, HD PicoP display engine, and future volume projections to the investor community. He said the final targets will really depend on the manufacturer’s [OEMs] timeframe and would probably occur in the late 2010 to 2011 timeframe. It’s difficult to say since all of their resources are primarily being focused on SHOWwx.

At any rate, I’m fully comfortable with Microvision shipping the pre-launched products in “the next several weeks”.   Microvision ship is leaving port and moving into uncharted waters of "Image by PicoP" ubiquity and the next five years will be very interesting for sure.

Anant Goel