Monday, January 25, 2010

Microvision: Time to Start Accumulating the Stock

It’s time to start accumulating Microvision [Nasdaq: MVIS] stock.

Here’s why…

• Most all the negatives are on the table, including limited production quantities last year in 2009 and going into the first Qtr 2010.

• $31 million additional funding was completed in November 2009 and the associated dilution has already been absorbed.

• Microvision officially launched SHOWwx into the Asia/Pacific region in September of 2009 followed by Europe /Spain soon thereafter. As we all know, the green laser supply and its price has been the major issue all along and it made sense that the small available quantities be introduced in relatively smaller markets… especially in those regions of the world where Microvision can fetch the maximum pricing leverage due to weak dollar.

• Microvision CEO Alex Tokman announced March 2010 as the launch date for its laser based PicoP projector SHOWwx in to the US market. He also indicated that Microvision will sell them from its own corporate website rather than collaborate with an OEM at this time.

You can watch this interview of January 7th at the following link…

• US market is huge and it is also the home to thousands of Microvision’s VIP members. In other words, Microvision has a very large captive market for its initial production of SHOWwx using green lasers from Corning and Osram.

• Corning was able to produce very limited quantities of green lasers in 2009. With Corning increasing production in March and Osram coming on board in February of this year, the green laser supply should improve dramatically.

• With green laser supply continuing to improve over the rest of year 2010, it is just the matter of time that a visionary company like Apple will come waltzing down the aisle to embed Microvision’s PDEs in their smartphones, iPods etc. If it is not Apple initially, it will be someone else… you can bet on that.

• The positives are better defined now than ever before and the management is comfortable with the stated time line.

• Enhanced PDEs, based on second generation green lasers and ASIC, are scheduled to be released to OEMs for embedded applications in early second Qtr of 2010… with possible applications hitting the market place as early as first Qtr 2011.

• Several SHOWwx derivatives and other applications are under “secret” development. I know you are skeptics when it comes to Microvision management. But this time around, consider this, the CEO Alex Tokman got on the tube to make the announcement and that carries a lot more weight in my opinion.

• The management officially launched the SHOWwx marketing campaign just before the CES 2010 and now seems to be gathering momentum.

• The management officially launched the viral marketing campaign by launching the official Blog “The Displayland”.

• The PicoP Display Engine is ready to go…evidenced by the PEK developers kit as ready and available for sale.

• The PicoP projector Display Engine specs and features are several notches above the competition.

• The management officially launched network marketing… by launching dedicated site for PEK tool kit for developers and publicly stating its availability to buy now.

“We believe that the accessory pico projector is just the beginning for the PicoP display engine which could be deployed in a diverse range of applications. For this reason, we are providing PEKs to help prospective customers cultivate new ideas and products.”

• One year ago, the management officially announced a $1.5 million funding contract to “Develop High-Definition Prototype Display Engine”. It’s interesting to note that the funding is for the next generation of PicoP Display Engine with HD resolution [1280x720]… while the competition [at HVGA] is still struggling to catch-up with what SHOWwx offers today [848x480]. In technological terms that is over 2 years lead over the competition… that is if they ever find a technology that has no glass ceiling on the resolution without compromising other attributes like power, form factor, brightness and always-in-focus image.

Finally, after all these years, the management is officially “coming out” swinging when they make a statement like…

“What’s significant about the emerging category is that it’s not just the media that are covering this emerging market. Market and financial analysts see this as a rapidly growing opportunity. According to Chris Chinnock, Insight Media, in a recent article highlighting the various pico projector technologies published by the Society of Information Display, he headlines the article as the Pico Projector Gold Rush. Check out the article (with contributions from a variety of the pico projector players, including Microvision). We do believe ‘there is gold in them there hills!’ And, since we believe we have the BEST offering in this emerging category, we hope to strike the mother load.”

Microvision stock seems to have hit bottom; after 15 days of relentless downward spiral caused by the “perfect storm” of January 7th.

I don’t see any further decline on the horizon and will aggressively start accumulating!

Anant Goel