Thursday, March 12, 2015

MicroVision: Opportunity of a Lifetime… in our Lifetime

“The opportunity of a lifetime must be seized in the lifetime of the opportunity.” …Leonard Ravenhill

From time to time, during the course of our lives, we are granted the "opportunity of a lifetime.”  It's a chance that doesn't come our way very often, and usually one that would result in enormous financial benefits to us… if we can manage to get hold of it before it fades away.

Here’s the REASON #1 to not let this opportunity pass you by and why you should quickly reposition your stock portfolio and other financial assets now…

Paradigm Shift from “Atoms” to “Bits”

No, this article is not about breaking Atoms into Bits… like in nuclear fission.

It is, however, all about the next wave of change, a paradigm shift, where real physical things [made-up of Atoms] are giving way to virtual things that physically don’t exist but function equally well with interweaved streams of bits, bytes, electrons and photons.

Consider this…

The Internet and mobile networks have reached a critical mass in terms of adoption, ease and speed of access, and data and financial security. This critical mass is now forging the next wave of change or a paradigm shift called “Atoms” to “Bits”. In the last few years, as you may have noticed, physical things [made up of Atoms] are giving way to electrons, photons and bits & bytes… in more of our everyday activities and lives.

Some examples would be…
  • ·         comparison shopping online from virtual stores and paying by credit cards
  • ·         online prescriptions
  • ·         accessing & retrieving information online
  • ·         banking and paying bills online
  • ·         communications and information exchange online
  • ·         rich text and video e-mails
  • ·         online advertising and promotions
  • ·         podcast & webcast
  • ·         webinars and distant learning from virtual universities
  • ·         telecommuting
  • ·         teleconferencing and video conferencing
  • ·         streaming videos and movies in place of DVDs
  • ·         on-line brokerage and virtual trading platforms
  • ·         electronic buying and selling commodity exchanges, etc.
I think you get the idea. This paradigm shift has been underway for a while… but it is only recently [in the last ten to twelve years] that it’s having a profound impact on brick & mortar type businesses. The on-line B2B and B2C business has grown from a few billion dollars a year to over a trillion dollars in year 2014. And at the rate we are going, further technological enhancements in Internet, mobile networks, RGB lasers, nano technologies, augmented reality and automation will further increase the virtual commerce to over $1.5 trillion dollars in 2015.

The paradigm shift from “Atoms” to “Bits”, as I call it, will be detrimental to many traditional businesses that still maintain monolithic physical presence and hang-on to the old business model in spite of visible signs of change and the resultant demand destruction for many traditional products and services. When you consider the impact of rising operating costs, higher taxes, rising fuel cost and higher costs of raw materials of all kind… you have the making of a witch’s brew that is sure to knock out any business that fails to change with the times. Those companies that recognize the evolution of Internet; mobile networks; augmented reality; nano technology; dramatic shift to virtual commerce; and automation ─ and have the vision to recognize its far-reaching impact on traditional business models, can capitalize from the revolution and not be its victim.

Blockbuster, Comp USA, Circuit City, Borders, Kodak, Polariod are just a few examples of businesses shutting down and developing new alliances.  Rite-Aid looks like a bankruptcy candidate… unless they find a way to improve their balance sheet. And how about those high vacancy rates in malls, shopping centers and the ever so declining foot traffic of shoppers into such establishments?

Companies that fail to embrace the Real Time nature of globally connected New World Economy of the Internet and mobile networks will slowly disappear… cut down to nothing by the competition… or be acquired at massive discounts.
Massive changes are taking place in the way business is done, customers are acquired and served, financial transactions are conducted, risk is managed, and investments are made today. You can embrace the changes and go with the flow, to capitalize and gain from it, or be a victim of the change itself. Choices are simple but the impact will be massive. The real time information, traveling at the speed of light to billion(s) of informed and educated potential customers, consumers and investors around the globe, can very quickly take your company to higher levels of financial success or, on the flip side, simply cut it down to size forever.

The subject of this post, paradigm shift from Atoms to Bits, is not only complex but is very broad in nature and it’s not my intent to discuss it here at any great detail in this forum. However, I do intend to discuss two major changes that are taking place right under our noses… and directly impact our investment in companies like MicroVision, Apple, and Facebook.

Change #1: Computer laptops – and now the smartphones, are taking over and dominating the PC world. Every year the smartphone adoption rates have grown dramatically over their laptop/desktop brethren. IDC predicts the number of worldwide mobile workers will reach 1 billion─ including nearly 75% of the U.S. workforce ─ by the end of 2011. Is your company prepared for this shift in the mobile workforce? 

Notebook Computers and Smartphones: It is well known that the screen size [of billion strong mobile workforce using laptops and smartphones] is one of the main determining factors in device form-factor design. Vendors and consumers alike are pulled in opposite directions: Make the device smaller, but improve screen readability. Adding mobile projection allows for smaller form factor design while providing a large screen display when desired. The market size for pico projectors, therefore, is huge to the tune of over a billion units world-wide.

Change #2: We already know the ubiquitous nature of the Internet, the laptops and mobile phones around the world. However, what we may not know that there is yet another mega change taking place right under our noses…

The mobile phones have become ubiquitous globally on one hand… and on the other hand we have the smartphones taking market share from the mobile phones. The 2.5 billion or so a year mobile phone market has given way to the smartphones.

Smartphones are rapidly replacing the classic mobile phones and laptops around the globe

Here’s the link to Gartner report…
“The gradual decline of the PC industry, spurred on by the rapid rise of mobile computing, continues apace. Today the analysts at Gartner have published their latest forecasts for global PC, tablet, “ultramobile” and mobile phone shipments: they are set to break 2.4 billion units, and nearly 88 percent of that number will be attributable to mobile phones and tablets — specifically devices built on Google’s Android operating system, which on their own will account for nearly 1.2 billion devices.”

Smartphones are feature rich mobile devices that consist of a mini-laptop with built-in mobile phone and connected to a service provider [carrier] via a broadband mobile network like the 4G. Smartphones are feature rich mobile phones and one of the key features that have plans to be offered in the high-end smartphones is a pico projector… as an accessory unit initially… followed by the embedded version in 2016. Future smartphones are expected to include, or offered as an option, a pico projector as a standard unit just like the digital camera is today.

It is my belief that in the coming short years all sorts of video devices and services will dominate our communications, collaboration, networking, entertainment and learning world.

• Pico projectors are being developed as an embedded feature in all things digital

The next popular categories that integrate pico projectors would be mobile computing [laptops] and communication [cell phones, smartphones] devices, and a whole range of multi-functional consumer electronic products such as personal media players [iPod], Tablets, digital cameras, digital camcorders and Integrated Mobile TV/projectors.

Why pico projectors are such a rage all of a sudden… you may ask?

That’s a fair question and can be answered in four parts…

Part 1: Pico Projectors can add Big Screen Experience to Small Devices

In 2009, In-Stat has forecast in its research report titled, “Embedded Pico projectors Ready To Break Out” that the pico projector revenue stream will cross the $ 1.1 Billion mark by 2014 with mobile hand held devices and accessory projectors accounting for significant market shares.
 “As mobile devices add more multimedia capabilities, embedded pico projectors can add a big-screen experience to a very small device,” said David Chamberlain, Author of the report and Principal.
Part 2: Rapidly Evolving Illumination Technologies like LEDs and Green Lasers

In-Stat found that illumination technologies are rapidly and continuously evolving by the day with manufacturers able to produce and supply Light Emitting Diodes (LED’s) and green lasers, and that the demand for such gizmos integrated within other devices will be so huge that the volumes will easily drive down modular costs to the extent that Pico projectors will become part and parcel of relatively low cost cell phones, media players and other digital consumer electronic devices.

“Technological advances in miniaturization, signal processing, and light sources—including green laser—are making Pico projectors a realistic feature for small battery powered devices like cell phones, media players, computing devices, and other consumer electronics,” said Chamberlain.

Part 3: Powerful & Always Connected. Functions Rich Devices with Enhanced Visual Experience

Today, the mobile devices are ubiquitous and if you were to project out the current trends another five years…

“You will be carrying with you, on a 24x7 basis, a very powerful, always connected, functions & sensor-rich device with enhanced visual experience… called the Smartphones. And the cool thing is, so will everyone else. So what are you going to do with it that you aren't doing now?

Before we consider the possibilities, let’s first address the ubiquity of the mobile devices and extrapolate the current trends towards the mobile phones of the future for everyone on this planet. In other words, the mobile phones of to-day will pave the path to ubiquity for Smartphones of tomorrow… and that tomorrow may be here as early as the next 2 years. And what’s good for smartphones of tomorrow is indeed good for pico projectors as an accessory of as an embedded unit.

Consider this…

• There are currently about 3.2 billion mobile subscribers in the world, and that number is expected to grow by at least a billion in the next few years.
• Today, mobile phones are more prevalent than cars (about 800 million registered vehicles in the world) and credit cards (only 1.4 billion of those).
• While it took 100 years for land line phones to spread to more than 80% of the countries in the world, their wireless descendants did it in only 16 years.
• Fewer teens are wearing watches now because they use their phones to tell time instead. So it's safe to say that the mobile phone may be the most productive and ubiquitous consumer product ever invented.

However, have you ever considered just exactly how powerful these ubiquitous devices are and if the current trends were to be extrapolated… what future mobile device will look like? Whatever the name [or logo] on the cover, under the hood these mobile phones of the future will be the smartphones that will be very smart [pun intended] and very powerful.   Today they seem to have converged and pretty much offer the same power, functionality, connectivity, long battery life and ease of use etc.

As more and more consumers switch to smartphones globally, the Galaxy and iPhone are picking up market share at the expense of foreign competitors such as Nokia.

However, the good news is that the overall smartphones market is growing faster than ever. In 2014, a total of 2.4 billion mobile phones were sold worldwide, according to IDC, of which some 660 million were smartphones.  IDC predicts that 50% of the 2.4 billion mobile phones sold will be smartphones, or 1.2 billion.

Currently, we know what smartphones like Galaxy and iPhone offer. What we don’t know and, therefore, we can only speculate what additional functionality and features the future smartphones may offer.

Here’s a list of what the future may hold in store for the consumers…

Smart alerts: Your mobile phone will be smart about your situation and alert you when something needs your attention. This is already happening today… eBay can text you when you've been outbid, and alert services (such as Google News) can deliver news, sports, or stock updates to you. In the future, these applications will get smarter, patiently monitoring your personalized preferences (which will be stored in the network cloud) and delivering only the information you desire. One very useful scenario: your phone knows that you are heading downtown for dinner, and alerts you of transit conditions or the best places to park.

Augmented reality: Your mobile phone uses its arsenal of sensors to understand your situation and provide you information that might be useful. A stylish looking app, for one example, may automatically track Zagat rated restaurants, giving users food and cost scores as they move in real time bringing new dining places into view as they appear on the map.

Or perhaps, do you really want to know how much is that red dress in the window? Your phone, with its GPS and compass, knows what you are looking at, so it can tell you before you even ask. Plus, it may even suggest what purse and accessories go with the red dress?

Crowd sourcing: Your mobile phone is your omnipresent window to the world, a way to publish pictures, emails, texts, Twitters, streaming videos and blog entries. When everyone else is doing the same, you have a world where people from every corner of the planet are covering their experiences in real-time. That massive amount of content gets archived, sorted, and re-deployed to other people in new and interesting ways. Ask the web for the most interesting sites in your vicinity, and your phone shows you reviews and pictures that people have uploaded of nearby attractions. Like what you see? It will send you directions on how to get there.

Sensors everywhere: Your mobile phone knows a lot about the world around you. If you take that intelligence and combine it in the cloud with that of every other phone, we have an incredible snapshot of what is going on in the world right now.

Tool for development: Your mobile phone may be more than just a convenience; it may be your livelihood. Already, this is true for people in many parts of the world: in southern India, fishermen use text messaging to find the best markets for their daily catch, in South Africa, sugar farmers can receive text messages advising them on how much to irrigate their crops, and throughout sub-Saharan Africa entrepreneurs with mobile phones become phone operators, bringing communications to their villages. These innovations will only increase in the future, as mobile phones become the linchpin for greater economic development.

The future-proof device: Your mobile phone will open up, as the Internet already has, so it will be easy for developers to create or improve applications and content. The ones that you care about get automatically installed on your phone. Let's say you have a piece of software on your phone to improve power management (and therefore battery life). Let's say a developer makes an improvement to the software. The update gets automatically installed on your phone, without you lifting a finger. Your phone actually gets better over time.

Safer software through trust and verification: Your mobile phone will provide tools and information to empower you to decide what to download, what to see, and what to share. Trust is the most important currency in the always connected world, and your phone will help you stay in control of your information. You may choose to share nothing at all (default mode), or just share certain things with certain people─ your circle of trusted friends and family. You'll make these decisions based on information you get from the service and software providers and the collective ratings of the community as well. Your phone is like your trusted valet: it knows a lot about you, and won't disclose an iota of it without your permission.

Enhanced Visual Experience:  Not too long ago, a mobile phone offered only a one-to-one viewing experience with little room for personalization and lacking the cool factor. Soon MicroVision’s PicoP display engine technology will change the DNA of the phone, making it more visual, interactive and unique to the user. Taking this a step further, your cell phone will become a “one-to-many” tool, allowing us to share mobile content with groups of friends, family and colleagues. In the not-too-distant future, road warriors will be showing presentations to a room full of colleagues via a pico projector accessory [PicoAir and PicoPro] for their mobile phones. We have only begun to unleash the mobile visual experience.
Now, let’s take it a step further and gather some information from real life consumers that will eventually become user of enhanced communications products…

• Video vs. Other Forms of Communications: Research has shown that users prefer video communication over other forms of communication [sound, smell, touch] and video will continue to be the preferred means of all human communications.

• Users Preference for Image Quality: Research has shown that users prefer wide screen, high definition, 2D/3D video with fast refresh [without motion blur] and always in focus images for all forms of video [static, streaming, and broadcast] communications.

• User Preference for Mobility: The entire world [users and service providers] is getting into the instant gratification mode and going mobile in all forms of communications and entertainment across the globe.

• Product Features Leading to Technological Convergence: Technological convergence is the tendency for different technological systems to evolve towards performing similar tasks. Today, we are surrounded by a multilevel convergent media world where all modes of communication and information are continually reforming to adapt to the enduring demands of technologies, “changing the way we create, consume, entertain, learn and interact with each other”.

Convergence in this instance is defined as the interlinking of computing and other information technologies, media content and communication networks that have arisen as the result of the evolution and ubiquity of the Internet as well as the activities, products and services that have emerged in the digital media space.

• Customers Requirements: Customers desire all digital/video devices to be low power, low cost, multimedia enabled, multitasking, integrated & all inclusive, easy to use, low maintenance, professionally supported and warranty serviced.

• Consumer Defined Shared vs. Private Information: Consumers desire the option [in product models or optional features] or built-in switch able flexibility in these digital/video devices to be able to switch between “shared” vs. “private” mode.

Having established the huge market size [and consumer preferences] for pico projector; let’s move on to identifying the leading technologies that hope to fulfill the consumer needs…

Laser based Pico display technology is superior to what’s out there right now… like DLP by Texas Instruments, LcoS by 3M and FLCOS by Micron Displaytech. The competition believed that green lasers wouldn’t be ready for years and its cost would be excessive. They also had concerns about laser projection “speckle” and laser safety issues. It is for these reasons, in my opinion, that they did not pursue the laser pico display technology path and essentially left the laser pico technology to MicroVision uncontested.

MicroVision on the other hand believed in the green lasers as being the differentiating technology that would make pico display engine as superior to LED based pico projection technology… and also as a serious contender, in terms of quality and brightness of images, to the lamp based projection technology.

There were several hic-ups along the way. However, after six years of hard work, anxious wait for green lasers and sweating it each passing day, and 500 issued patents later, the world’s first laser based HD PicoP projector was commercially launched on January 9th, 2015.

Not only that, another announcement was made [on March 10th, 2015] of a major oem [SONY] licensing agreement as a major milestone accomplished in the history of MicroVision. The stakeholders of MicroVision [investors, partners and consumers] can finally take comfort in this announcement as a milestone that…

MicroVision (MVIS) has "signed a multi-year license agreement with its Fortune Global 100 partner" for its MEMS-based PicoP projector technology.
  • MicroVision will get an $8M up-front license fee and ongoing royalties on display module sales, and will also sell components to the Fortune 100 Company. Other terms are confidential.
  • A partnership with the Fortune 100 Company was originally struck in April 2013. MicroVision received $1.9M component orders from the company in both September and December, as well as a $1.5M services contract in October.
“Let’s now look at 2015. We're excited about the progress we made with Sony in 2014. And we want to build on this momentum in 2015. Let me give you now a snapshot of what we see as our top priorities for this year.” … Alex Tokman, CEO of MicroVision, on March 10th, 2015
  • First, obviously, to support our Fortune Global 100 customer with display module commercialization. Second, to develop new OEM and channel opportunities for display engine manufacturing partners that are incorporating our technology. Third, to increase supply capacity for key MicroVision components.
  • Fourth goal is the culmination of the first three. It’s to achieve a significant year-over-year growth through component sales and licensing of PicoP display technology. Finally, the fifth goal is to stay ahead of the competition, we must innovate. Hence, our final goal for the year is to evolve PicoP display technology platform to offer enhanced features and capabilities for a compelling roadmap for all future and present licensees of our technology.
To make the matter even more interesting, other announcements were made by Alex Tokman at this March 10th earnings conference call…

·         Superior Technology: “One of the fundamental advantages we have for any application to require miniaturization and low power consumption is due to the fact we use lasers and MEMS versus let say panels and the LEDs. So our ability to increase brightness without any significant increase in power is what separates us.”
·         Significant Competitive Advantage: “For example, when the projector is very large, we don’t have real advantage on power, but when the requirements for the projection system to be very small, we actually have significant advantage.”
·          Exponential Competitive Advantage:  “At low brightness, we are slightly differentiated and as brightness increases from 10 lumens to 100 lumens, our differentiation on power increases exponentially.”
·         Deeper & Broader Market Penetration: “In essence, Sony is going to be doing marketing and additional market penetration for you is that correct?”

      “…  That’s what we expect. And this is why it is exciting, because you’re replacing three or four MicroVision business development, marketing and sales people with several thousand that Fortune Global 100 has.”
·         Cost of Green Laser: “And when it relates to cost of digital green lasers, at one time there were 5x of the reds and blues. How close are we coming in line with the cost of the other colors right now?”
“It was 20x actually when we started in 2010 and now it’s almost even.”
·         Truly Differentiated End-user Experience:  “We believe that solutions that with MicroVision's PicoP display technology are poised to enable truly differentiated end-user experience that are not attainable from other technologies. And there’s a lot to be excited about.”

We are truly at the turning point in the history of MicroVision, that some may call the “validation” phase. Because, that’s what the commercial release and the licensing agreement with SONY represent as …

• Validation of MicroVision’s laser based PicoP display engine technology, its quality, its reliability, and a viable commercial fabrication & production milestone.

• Validation of performance and quality of PicoP display engine at the core of the world’s first laser based PicoP projector PicoAir and PicoPro by Celluon.

• Validation of diode green laser technology, its reliability, and a viable commercial fabrication & production milestone.

• Validation of technical and performance superiority of laser based PicoP projector as compared to other two technologies on the market… like DLP from Texas Instruments and LcoS for 3M.

• Validation of consumer preference for MicroVision’s PicoP projector: wide screen, high definition, longer battery life, 2D video with fast refresh without motion blur, small physical size and always in focus images for all of video [static, streaming, and broadcast] communications.

• Validation of acceptable safety standard for laser based pico projectors in consumer use and adoption.

• Validation of speckle as a non-issue and as virtually non-existent with SONY and Osram laser based PicoP display engine.

• Validation of fundamental design flaws of MicroVision competitors: low resolution images, faded colors, short battery runs, longer throw distance, and requiring constant manual focus adjustments.

• Validation of MicroVision as a product company rather than just a R&D house with 500 issued patents and with many more on file.

• Validation of global 100 electronic OEMs recognizing laser based PicoP display engine as a viable and superior alternative to DLP, LcoS and FLOCS technology.

• Validation of growing demand for Pico projectors from carriers and content providers on a global basis.

• Validation of consumer demand for quality Pico projectors.

• Validation of growing demand for green lasers and the ensuing competition in green laser product arena.

MicroVision is ready as a supplier of laser PicoP Display Engine, proprietary components, and support services to its OEM partners… and offers the best of breed PicoP display technology.

Is MicroVision ready for prime time and worthy of your investment dollars, consider this…

Consider the RISK vs. REWARD:

After reading this report on MicroVision stock opportunity, you will understand why the Risk vs. Reward is compelling and the stock remains a strong buy for over 150 fold increases in price per share (PPS) in the next 3 years… by the end of 2017.

Here’s why…

In any investment, it is very important to look at RISK vs. REWARD.

After having done considerable amount of research and analysis of MicroVision, I would like to share the following conclusions [in a summary form]….

Stock Volatility: Over the last few weeks, both the “Historical Volatility” and “Implied Volatility” have come down gradually. Currently, the HV is 54 and the IV is 81. Looks like we now have more believers [long] than speculators [shorts] on board. Also, this stock is part of Russell 2000/3000 and as such is subject to small cap market volatility… which has been all over the place in recent weeks.

Volatility is unavoidable in small-cap investing. It can be a gut-wrenching, stress-inducing part of the small-cap investing experience, or it can be the grease that runs the profit machine. Where a 3% move in Microsoft or McDonald's would be out of the ordinary, good or bad news can routinely move small caps' share prices more than 10 -20%. It can be tough for an investor to handle, but the determining factor is self-discipline.

Determine your small-cap investment criteria

Small-cap investing has high -- yet manageable -- risk, at least when compared to value or income investing. Significant returns probably will not materialize early on in any individual investment. A conscious decision on one's small cap risk limit is essential. Those relying on investments for regular income should be extremely cautious with small-cap investing.

Perform due diligence before pulling the trigger

Investors sometimes invest without understanding the company's business. Then, at the first sign of negative volatility, they finally scramble to look at the firm's financial statements. That's being reactive, not proactive. You need to understand a company before investing in it. If the stock happens to rally to unattractive levels while you're doing your research, you'll nonetheless be in a great position to buy when the stock inevitably dips. If the stock falls, you'll know more about the company and therefore be less prone to panic. Cognitive scientists have determined that uncertainty is one of the most stressful and painful emotional states. Prior due diligence reduces the element of surprise and is the most effective way of minimizing investment uncertainty.

• Due diligence does not only include checking the criteria for buying a stock. With rare exception, it should also include formulating the conditions for selling based on the stock's valuation. Because small-cap companies often have greater growth prospects than blue-chip companies, your reasons for selling a small-cap company are more apt to change

Stock Short Interest: Over the last few weeks, the short interest has gone down and now stands at 8% [3.55 million shares] of the float [44.45 million shares]. All in all, at the current low average volume per day, it will take about 8 days to cover… about 3.55 million shares short… trading 445,000 shares per day average over the last 30 days.

Stock Trading Range: For a period of six months [from September 12 to March 12] the stock traded over $1.90 in a very tight range of “$1.70 to $2.00. We have seen some very volatile days on Wall Street in the last 10 days [from March 2 to March 12]… and the stock has gone up to $2.75 and now seems to be holding at this level as a very strong support… and waiting for next announcement of news. The stock price has crossed over 200, 50, and 13 day moving averages and seems to have very strong support at $2 or so. This is where the stock price was before the March 5th announcement of licensing agreement with global fortune 100 client… now well known as SONY.  The reason for the stock price pop-up, in my opinion, is due mainly to the positive news and very enthusiastic eye opener earnings conference call.   

Here’s the stock chart…

Stock Holding: Institutions hold about 14% and the Insiders hold over 15% of the outstanding stock [44.45 million float on a fully diluted basis]. This means that over 71% of the float is held by retail investors. This is a very wide distribution of MVIS stock… a good sign for PPS support [during lean times] and PPS momentum [during good times] when institutions finally wake-up and come looking to take position in the MVIS stock directly… or decide to invest aggressively in small cap stocks indexed by Russell 2000/3000.

Short Term Risk [next four weeks]: Over the next six weeks [up until the announcement of the next licensing deal with global fortune 500] the stock PPS could trade in tight range of $2.80 to $3.50… but hopefully does not trade any lower than $2.62. This is the short term risk to PPS… mainly due to lack of news or release of any significant news over the next few weeks.

Mid Term Risk [next 2 Qtrs]: There is a very strong possibility that an additional OEM licensing agreement [and purchase order for proprietary components] and increased quantities of royalty payments will be announced on a monthly basis from here on. In such a case, the PPS may just take-off to new highs for the year and not look back. As we know, there is more demand for PicoAir than the supply and that bodes well for the mid-term future… as there could be monthly announcements of OEM contracts and agreements for rest of the year 2015.

Two of the supply chain issues have been resolved; and “green laser cost” and “green laser volume production” is no longer an issue. Feasibility and product development of the various PicoP display engine components is not an issue. The issue [if any] could be with the mass production of green lasers from SONY and Osram. 

Also, there is a possibility that the company may be selling some more shares to fund its short term cash flow needs or to fund the production of larger quantities of proprietary components in second half 2015… in case there is cash flow short fall from sale of products and services. That’s the mid-term risk… but I will take it with a smile.

Long Term Risk [over 2 years]: If the company can fast track the volume production of PicoP display engines and proprietary components to a few million units a year [the good case scenario] or survives the “hostile” take-over attempt in the mid-term [precipitated as a result of major supply chain issues], there is no long term issue… because the market is huge and the company has leadership position in laser based pico projector product category.

Reward: For those who understand MicroVision — its business model; the various products; the size [and the pull] of the captive worldwide market— the rewards are phenomenal.

Three years from now in 2017, the stock could easily trade in the $400 to $500 range. Here’s an educated projection…

• Worldwide Market Size: 2.5 billion units [cell phones, laptops, smartphones, iPods, iPhones, camcorders, digital cameras, mobile TV/Projectors etc.]

• Market Adoption Rate: 2%... 50 million units

• PicoP Display Engine Market Share: 30% of 50 million units… 15 million units

• OEM price for PicoP Display Engine: $100

• OEM Revenue: $1.5 billion in PicoP Display Engines

• MicroVision Royalty: 10% of $1.5 billion =  $150 million + $150 million in component sale at $10 each

• MicroVision Net Royalty Plus Component Sale: $300 million - $50 million component cost = $250 million

• MicroVision EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization: $220 million [with $30 million in operating cost]

• Interest Expense: $0 million

• Interest Income: $0 million

• Taxes: $0 million

• Depreciation: non cash and very small

• Amortization: non cash and very small

• Net Operating Income: $220 million

• Earning Per Share: $4.40 on a fully diluted basis [50 million shares]

• Price Earning Ratio: 100 for a hyper growth company

• Price Per Share: $440 per share

In my book, the “Risk” is insignificant [may be 2% per year interest in treasury bills as the lost opportunity] as compared to the potential of making 150 times your money in the next year 3 years.

Alex Tokman, CEO of MicroVision, said in his March 10th earnings conference call:  “We believe that solutions that with MicroVision's PicoP display technology are poised to enable truly differentiated end-user experience that are not attainable from other technologies.  And there’s a lot to be excited about.”

This projection for 2017 could actually be low compared to the reality of the market place that will start to unfold in the months ahead. 

Anant Goel
Producer CEO - RKNet Studios