Thursday, April 8, 2010

Microvision: One More Purchase Order in Next Two Weeks?

First, the good news…

Microvision Completes Design of New PicoP Laser Display Engine for Mobile Embedded Applications

Press Release
Source: Microvision
Monday March 29, 2010, 7:29 am EDT

REDMOND, Wash.--(BUSINESS WIRE)--Microvision (NASDAQ:MVIS - News), a leading developer of ultra-miniature projection display products, announced today that it has completed the design and begun shipping initial evaluation samples to several prospective customers of its new ultra-miniature PicoP® laser projection display engine.

Here’s the link…

Then, the exciting news…

Microvision Receives $8.5 Million Purchase Order for New PicoP Laser Projection Display Engine

Press Release
Source: Microvision
Monday April 5, 2010, 7:06 am EDT

REDMOND, Wash.--(BUSINESS WIRE)--Microvision (NASDAQ:MVIS - News), a leading developer of ultra-miniature projection display products, announced today that it has received an $8.5 million purchase order for its new ultra-miniature PicoP® laser projection display engine from a consumer electronics customer. The OEM plans to embed the PicoP engine inside a high-end mobile media player for release in late 2010 and plans to announce its launch at that time.

Here’s the link…

Now for some projections [pun intended] into the future…

There are four areas that I would like to focus on…

1. SHOWwx was just the beginning of things to come

2. Laser PicoP Technology as “Core” Technology vs. “Commodity” Technology

3. More Purchase Order to Confirm Rapid Ramp-up of Green Laser Production.

4. Case for brighter [like 20 lumens] PicoP Display Engines for the embedded version.

SHOWwx Just the Beginning of Things to Come:
On March 24th, Microvision started selling its laser PicoP projector SHOWwx to the US market… selling them directly; from its on-line web store for a handsome profit. When you sell directly; your margins are always better because of the savings in middleman’s commission. By the next earnings conference call; we would find out for sure what sales revenue and profit margins are from on-line sale of SHOWwx.

On April 5th, Microvision confirmed the receipt of a purchase order for $8.5 million dollars for its ultra miniature PDE… and that is the part that confirms my view that SHOWwx and the $8.5 million purchase order is the just the beginning of things to come.

Here’s why…
Potential markets for laser based PicoP Display Engine technology is not only huge… but it is also a high margin market opportunity. If you were to consider the high-end Media Player market alone… the possibilities are enormous…

Low Power Front Projection Media Players for the Third World Countries:

Think about 2.5 billion people in India and China... as they represent the potential buyers of a low power front projection portable TV/Media Player that offers a large screen [40'' to 100''] high definition always in focus vivid and bright color viewing experience. Extremely low ENERGY consumption [like 10 watts or less] and portability is the key market demand factor here. Energy will become more and more scarce and expensive by leaps and bounds…whereas the portability allows for sharing of resources among friends and family.

Low Power Front Projection Media Player for the Master Bedroom:

Think about a billion bedrooms globally that could use a ceiling projector... for adding another dimension to the various ways of media consumption for information and entertainment. We have desired the bedroom viewing of television for ever, so it seems, and some of us may have installed televisions in the bedroom. However, now it is possible to add, by the millions, a low power media player with built-in PicoP projector in our bedrooms… that offers short throw ratio, wide screen, high definition, bright and vivid color, and always in focus viewing experience. Media player/projector runs on low power batteries... so no risk of electrocuting yourself. No significant heat... so you won't burn yourself. No heavy duty TV to install on the bedroom wall.

Low Power Portable Projection Media Player for Every Bedroom in the House:

All you need is one portable Media Player with built-in PicoP projector… that gets moved around from room to room when and where it’s needed. It certainly is a cheaper alternative than buying a TV for each room of the house. This portable Media Player can also be the one you pack with your bags… when you are on the go.

Market Size for Portable Media Players with built-in PicoP Projectors is huge… like in billions world-wide. The most recent order for $8.5 million from the Consumer Electronic Company is just the beginning of what’s to come and not the end.

Laser PicoP Technology as “Core” Technology vs. “Commodity” Technology:
Some have questioned the laser PicoP as “core” technology [like CPUs from Intel] vs. “commodity” technology [like cell phone touch screen and cameras].

My take on the subject is as follows...

Picop [the generic version] is an enabling technology and therefore a commodity... no question about that.

However, laser PicoP is a core technology and that's how it is being positioned by Microvision. Picop technology from TI or 3M will not create [or capture] as large a market as laser PicoP would... due to inherent image quality and functionality only possible due to lasers being used as the light source.

Microvision laser PicoP technology will capture its fair share of the captive markets but it would go-on-further and create markets that are only possible because of laser PicoP. And that's not the commodity markets by any means. Microvision recognizes that right from the beginning; and therefore is positioning the PicoP Display Engines accordingly… by using the “Image by PicoP” insignia on every thing related to its technology.

There will be others with laser picop technology down the road... and that's why Microvision is churning out these patents by the dozens… to protect its IP turf. Also, the "Image by PicoP" is part of this marketing strategy that positions Microvision PicoP technology as a "core" and not "commodity" right from day one. From what I have seen, and there is plenty of evidence for you to see as well, Microvision is charging a premium price for its PicoP technology. Just look at SHOWwx Limited Edition sold at $999 and the Commercial Edition currently for sale at $549.

I hope you can appreciate the difference... because it’s worth billions of dollars when it is executed with knowledge, passion, and gumption.

More Purchase Orders to Confirm Rapid Ramp-up of Green Laser Production:
If there was another Purchase Order next week, would that convince you that Osram and Corning are ramping-up production of their green lasers faster than expected?

Here’s what I’m thinking…

Many OEMs have sampled the first version PEKs from last year. Now the second generation PEKs, for embedded applications, are going out and dramatically improve upon what has been tested before! I believe that the embedded version of the PicoP Display Engine is brighter [over 20 lumens], smaller and consumes less energy.

In other words, time to market for these OEMs has collapsed to a point that few more may be interested in bringing PicoP embedded digital devices to the market for the coming Christmas season. I don’t think the Japanese and Koreans are going to let APPLE hog all the discretionary income of the America consumer for the iPad.

The case for brighter PicoP Display Engine for Embedded Application…
Corning has been slow to ramp-up due to improvements in their SHG green laser technology… that is the switch from “wave guided SHG laser” to “SIDM-based adaptive optics SHG laser” technology. I remember, from a year ago in a conversation with the Corning Product Manager, that G-2000 green laser would incorporate enhancements leading to brighter pictures… with a target goal of 20 lumens or better.

Here’re some links…

Corning G-1000 laser design [at 10 lumens with 10:1 contrast ratio] and the SIDM-based adaptive optics technology…

Corning G-2000 laser pumps more lumens [like 23 lumens] at a reduced contrast ratio of 3:1 …

Corning licked its waveguided SHG laser production issues last year by switching over to SIDM-based adaptive optics technology.

This year, Corning is the wild card with its contrast optimized green laser at 23 lumens.

Microvision future is bright and is getting brighter every day… just like its laser PicoP Display Engine.

Higher stock valuation will come in time… just like the HD resolution on its PicoP projection images.

Anant Goel