Tuesday, August 31, 2010

Microvision: Apple─ The Media Player OEM?

At the Microvision shareholder’s meeting on September 15th, 2009, there were some questions asked about OEM relationship with Apple.

My take on CEO Alex Tokman’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 was in talks with “Apple”, however, there wasn't enough unit volume of PicoP Display Engines for Apple’s appetite at that time to be engaged officially.

Fast forward to today, last day of August 2010…

A year later, you may want to re-visit the questions about Apple in light of Microvision’s $11.1 million order from a [non-disclosed] Media Player OEM for the embedded PDEs…

• $11.1 million in initial order is not a small order by any means… because after the initial order, all of Microvision production could go to this OEM on a monthly basis. And these monthly orders represent about $12 million per Qtr [20,000pm x 3m x $200per unit = $12 million] in the first half of 2011… and increasing.

• With 5 Green Laser suppliers, the unit production can easily be ramped –up to 100,000 units per month… and that’s a decent production run for any Premium Media Player OEM like Apple or NetFlix.

• With diode GL coming into play some time in 2011, number of units can only go higher than the 100,000 per month… and that’s not shabby at all.

• Since announcing the Media Player OEM early this year, Microvision has been very tight lipped about the identity of this OEM… which is a typical modus of operands for any of the Apple suppliers. A small time OEM would probably follow the example of rest of the OEM flock in the CE industry─ where it is a common practice to earn some free publicity by announcing new products in the pipe line.

• CEO of Microvision has, on more than one occasion, stated publicly that the Media Player OEM would announce the product on its own time schedule before the 2010 Christmas shopping season. Well, early September is a good time to announce new products for the 2010 seasonal shopping… don’t you think? Apple will be making product announcements on September 1st … now that’s some coincidence!!!

• On March 8th, 2010, Microvision announced two new members of the management team: Joe O'Sullivan as Vice President of Global Operations and Michael Fritts as Vice President of Global Sales, Marketing, and Business Development.

Mr. O'Sullivan is a consumer electronics industry veteran with executive management experience at Apple Computer and InFocus. At Apple, Mr. O'Sullivan spent 15 years in operations and supply chain management, including Vice President of Operations where he was instrumental in building a global operations infrastructure in Asia. In addition, he developed Apple's International Procurement Organization strategy, building a structure in Japan, Taiwan, Hong Kong, China, Singapore and Europe.

Today, a day before Apple’s new product introduction on September 1st , we hear this rumor about: “New iPod May Include Projector”.  Could it be Microvision’s laser based PicoP projector inside the Apple’s new premium iPod?

We just have to wait and see.

Here’s the link to the rumor news…
http://www.benzinga.com/company-news/contracts/10/08/450653/new-ipod-may-include-projector-mvis-aapl

While we wait, let’s look at Apple’s secret to success…

“Show and Sell”

All the while the competition…

"Flashes an exotic prototype, then – Presto! – get consumers to buy their more boring stuff. That kind of thinking still rules at most electronics companies. Apple under Steve Jobs only shows off actual products. And that difference is Apple’s arcane secret to success."

Like washed-up Catskill magicians unable to let go of old routines while a brash upstart steals their audience, nearly every maker of consumer electronics in the world clings to a quaint song-and-dance about prototypes.

“Here is your possible future,” they bark, flourishing the latest conceptual product from the lab. “Now watch us make it disappear!”

Apple’s chief magician, however, knows better, pulling solid objects out of the ether; products you can actually buy.

No one can be sure until the rumors lead the way to actual news in the media or corporate announcements.

But if you think it is possible, than rest assure it can happen someday.

If this sounds like a minor complaint about most of the industry’s lack of imagination in marketing, you’re misunderstanding the whole act. The fact that Apple does not reveal prototypes but shipping products; is the fundamental difference between their entire business strategy and that of the rest of the CE industry. It evokes a feeling of trust between Apple and consumers – that when Apple actually reveals a product, it’s something that they’re confident enough to support for years to come.

Anant Goel