Perry Mulligan is a perfect choice for replacing the outgoing Board of Director at Microvision. His expertise and industy connections are exactly what Microvision needs at this stage of its growth... that is, a company on the verge of “hyper growth”.
“Prior to joining QLogic, Mr. Mulligan spent nine years in the Electronic Manufacturing Services industry where he held senior executive positions at both Solectron and Celestica. These positions included the role of Chief Procurement Officer and Senior Vice President of Materials for Solectron Corporation, Vice President of customer solutions at Celestica, and VP of Asia sourcing for Celestica. Before entering the Electronics Manufacturing Services industry, Mr. Mulligan held a number of management positions at Nortel in operations, IT and materials management.”
Here’s the link to the Press Release...
http://finance.yahoo.com/news/Perry-Mulligan-Joins-bw-2376595991.html?x=0&.v=1
These are very interesting and revealing choice of words from the Press Release...
“On behalf of the entire Board of Directors and management team, I am pleased to welcome an accomplished operations strategist, supply chain builder, and manager of large work teams as we rapidly ramp Microvision’s go-to-market strategy.”
"Microvision is clearly one of the most innovative companies in the emerging category of pico projection,” said Mr. Mulligan. “I feel privileged to join this exciting and dynamic opportunity and look forward to working closely with the other Directors and CEO Alexander Tokman and his team, during this next phase of Microvision’s growth.”
Yes, Microvision’s next phase of growth is indeed “hyper growth” and the management will have to deal with the challenges and issues that come with the territory... as early as in the 1st Qtr 2011.
You may ask what hyper growth is...
Unless you sit down and have a conversation with Warren Buffet (who breaks it down to simplicities), you're going to get a million different answers to this question. The point is that most analyst look for "ARG" - Accelerating Revenue Growth. And that’s what Microvison is gearing-up for... begining March of this year.
“ARG is when your revenue growth % is increasing year over year. Investors and savvy analysts like to see positive ARG... because, it's an indicator of good things. Google and Apple just blew the doors off earning estimates, yet didn't get a bump in stock price (actually it went down a little) because of lack of ARG. Then again, ARG doesn't tell the whole story because what company can continue to grow at 400% perpetually?”
Look for ARG and remember, ARG is only probable in the first few years of a company's existence. Sure, you can see it down the road but at that point the real $ has already been made.
There are four characteristics to look for in a hyper-growth company like Microvision...
1. Sustainable sales growth: This is easy to find and makes sense to any investor.
2. High operating margins: The profit from each widget today has to pay for the development of future widgets... and leave enough left over to enrich shareholders.
3. Small capital requirements: We don’t want to see all the profits going out the door to pay off big debts.
4. Scalability: We want a company that can handle many additional users [or sell millions of more widgets] at no extra cost other than the cost of goods.
Growth investing and value investing are two distinct styles of investing that when combined are the perfect reciepe for Hyper Growth... like in the future of Microvision.
When growth is combined with value, the product is GARP, or growth at a reasonable price, which looks for companies that are undervalued with sustainable growth potential... like Microvison currently trading at deep discounted prices and with a promising future ARG that will surely blow the lids-off the chart.
Anant Goel
http://www.wealthbyoptions.com/
Showing posts with label Takeover. Show all posts
Showing posts with label Takeover. Show all posts
Friday, January 29, 2010
Tuesday, January 19, 2010
Microvision: “What’s Your Business Growth Strategy”?
From the looks of it, Microvision stock seems to have stabilized and margin call related selling has subsided after 6 days of trading below the $3 mark.
Have to agree with you, that it hasn't been a walk in the park investing in Microvision. But then again, good things come to those that have the patience, knowledge, analytical fortitude and the power of belief to stay the course.
When it comes to Microvision corporate management, you have to cut some slack to these folks. They have been managing so many tough technological innovations to come together; for PicoP to come this far and become a reality. A few more months will not break the corporate treasury [with over $50 million in cash] or put the company out of business. The pico projector market is huge and the race to market has just begun.
After listening to CEO Alex Tokman interview again, this is my reaction for whatever it is worth...
Microvision: What’s Your Business Growth Strategy?
Every business has to plan for growth and executives should make sure their growth plans are consistent with their dynamic business plan. A dynamic business plan is an updated version that is kept current to reflect the ever-changing business-operating environment. Especially in the technology and DOT.com businesses, where the product cycles are so short and consumer preferences are mostly dependent on the next hot product or service.
When it comes to growth plans, the two ends of the spectrum are, for example, should a company grow quickly and unprofitably, like Amazon and Hotmail [before it got acquired by Microsoft for $480 million], or slowly, with a careful eye on the bottom line, like Ben & Jerry's ice cream parlors? It all depends on what the competition is doing.
This report focuses on the challenges of growing a business and the importance of picking the right growth model that is consistent with your business plan and positions you for whatever your ultimate goal is. As the author sees it, there are three possible scenarios:
Number one: you want to be the gorilla of your industry in a hurry like Amazon.
Number two: you want to ramp-up your business fast and position for an acquisition like Hotmail.
Number three: you want to be a brick and mortar company producing steady profits like Ben & Jerry’s.
Regardless of what your business model is, the CEO and the CFO of the company need to formalize their business growth strategy and evangelize to the man in-charge of running the day-to-day operation of the business. Building a company is no small task? You've got one very important decision to make, because it affects everything else you do. No matter what else you do, you absolutely must figure out which camp you're in, and gear everything you do accordingly, or you're going to have a disaster on your hands.
THE DECISION MAKING PROCESS:
Whether to grow slowly, organically, and profitably, or whether to have a big bang with very fast growth with lots of capital spent in a hurry, that is the question?
The first model, popularly called "Get Big Fast" (a.k.a. "Land Grab"), requires you to raise a lot of capital, and work as quickly as possible to get big fast without concern for profitability. I'm going to call this the “Amazon”, because Jeff Bezos, the founder of Amazon, has practically become the celebrity spokes-model for Get Big Fast.
The second model is called "Hotmail for Sale or Fail". Please note that Hotmail, before its acquisition by Microsoft, is the subject of our discussion here. And as for the name of our model “Hotmail for Sale or Fail”, I just made it up to make the point. This model requires you to raise only a small amount of capital, position for acquisition, and work as quickly as possible to build momentum to show there is promise of getting big fast… without concern for profitability. I'm going to call this “Hotmail” model, because Hotmail fits this model very well.
The third model, organic growth model, is to start small, with limited goals, and slowly build a business over a long period of time. I'm going to call this “Ben & Jerry’s” model, because Ben & Jerry’s fit this model pretty well.
The worst thing you can do is fail to decide whether you're going to be a Ben and Jerry's company, or a Hotmail company, or an Amazon company.
IN SUMMARY:
If you have the capability to raise tons of money, and you're going into a market with no existing competition, have lock-in and network/viral effects, you better use the Amazon model, or you're going the way of Wordsworth.com, which started two years before Amazon, but nobody's ever heard of them. Or even worse, you're going to be a ghost site like MSN Auctions with virtually no chance of ever overcoming eBay.
If you don’t have the ability to raise tons of money, and you're going into a market with no existing competition, have lock-in and network/viral effects, you better use the Hotmail.com model. Or you're going the way of the 95% of Amazon copycats, with weak capitalization, that have landed hard on their thin ass-set and nobody's ever heard of them.
If you're going into an established market, getting big fast is a fabulous way of wasting tons of money, as did BarnesandNoble.com. Your best hope is to do something sustainable and profitable, so that you have years to slowly take over your competition. You should start in one area, offer competitive prices, differentiate your services or offer variety of choices to create your customer base by getting customers to switch over from established competitors.
In closing, we should ask CEO Alex Tokman: “Microvision: What’s Your Business Growth Strategy?”
Anant Goel
PS: This post is based on a management report titled “… Technologies Business Growth Strategy” published by the author [Anant Goel] for a multi-million dollar company that was recently sold to a multi-billion dollar public company.
Have to agree with you, that it hasn't been a walk in the park investing in Microvision. But then again, good things come to those that have the patience, knowledge, analytical fortitude and the power of belief to stay the course.
When it comes to Microvision corporate management, you have to cut some slack to these folks. They have been managing so many tough technological innovations to come together; for PicoP to come this far and become a reality. A few more months will not break the corporate treasury [with over $50 million in cash] or put the company out of business. The pico projector market is huge and the race to market has just begun.
After listening to CEO Alex Tokman interview again, this is my reaction for whatever it is worth...
Microvision: What’s Your Business Growth Strategy?
Every business has to plan for growth and executives should make sure their growth plans are consistent with their dynamic business plan. A dynamic business plan is an updated version that is kept current to reflect the ever-changing business-operating environment. Especially in the technology and DOT.com businesses, where the product cycles are so short and consumer preferences are mostly dependent on the next hot product or service.
When it comes to growth plans, the two ends of the spectrum are, for example, should a company grow quickly and unprofitably, like Amazon and Hotmail [before it got acquired by Microsoft for $480 million], or slowly, with a careful eye on the bottom line, like Ben & Jerry's ice cream parlors? It all depends on what the competition is doing.
This report focuses on the challenges of growing a business and the importance of picking the right growth model that is consistent with your business plan and positions you for whatever your ultimate goal is. As the author sees it, there are three possible scenarios:
Number one: you want to be the gorilla of your industry in a hurry like Amazon.
Number two: you want to ramp-up your business fast and position for an acquisition like Hotmail.
Number three: you want to be a brick and mortar company producing steady profits like Ben & Jerry’s.
Regardless of what your business model is, the CEO and the CFO of the company need to formalize their business growth strategy and evangelize to the man in-charge of running the day-to-day operation of the business. Building a company is no small task? You've got one very important decision to make, because it affects everything else you do. No matter what else you do, you absolutely must figure out which camp you're in, and gear everything you do accordingly, or you're going to have a disaster on your hands.
THE DECISION MAKING PROCESS:
Whether to grow slowly, organically, and profitably, or whether to have a big bang with very fast growth with lots of capital spent in a hurry, that is the question?
The first model, popularly called "Get Big Fast" (a.k.a. "Land Grab"), requires you to raise a lot of capital, and work as quickly as possible to get big fast without concern for profitability. I'm going to call this the “Amazon”, because Jeff Bezos, the founder of Amazon, has practically become the celebrity spokes-model for Get Big Fast.
The second model is called "Hotmail for Sale or Fail". Please note that Hotmail, before its acquisition by Microsoft, is the subject of our discussion here. And as for the name of our model “Hotmail for Sale or Fail”, I just made it up to make the point. This model requires you to raise only a small amount of capital, position for acquisition, and work as quickly as possible to build momentum to show there is promise of getting big fast… without concern for profitability. I'm going to call this “Hotmail” model, because Hotmail fits this model very well.
The third model, organic growth model, is to start small, with limited goals, and slowly build a business over a long period of time. I'm going to call this “Ben & Jerry’s” model, because Ben & Jerry’s fit this model pretty well.
The worst thing you can do is fail to decide whether you're going to be a Ben and Jerry's company, or a Hotmail company, or an Amazon company.
IN SUMMARY:
If you have the capability to raise tons of money, and you're going into a market with no existing competition, have lock-in and network/viral effects, you better use the Amazon model, or you're going the way of Wordsworth.com, which started two years before Amazon, but nobody's ever heard of them. Or even worse, you're going to be a ghost site like MSN Auctions with virtually no chance of ever overcoming eBay.
If you don’t have the ability to raise tons of money, and you're going into a market with no existing competition, have lock-in and network/viral effects, you better use the Hotmail.com model. Or you're going the way of the 95% of Amazon copycats, with weak capitalization, that have landed hard on their thin ass-set and nobody's ever heard of them.
If you're going into an established market, getting big fast is a fabulous way of wasting tons of money, as did BarnesandNoble.com. Your best hope is to do something sustainable and profitable, so that you have years to slowly take over your competition. You should start in one area, offer competitive prices, differentiate your services or offer variety of choices to create your customer base by getting customers to switch over from established competitors.
In closing, we should ask CEO Alex Tokman: “Microvision: What’s Your Business Growth Strategy?”
Anant Goel
PS: This post is based on a management report titled “… Technologies Business Growth Strategy” published by the author [Anant Goel] for a multi-million dollar company that was recently sold to a multi-billion dollar public company.
Tuesday, October 20, 2009
Microvision: Take Over Target (Part 2)
Someone asked the obvious question: "What if a company does make an offer?"
Well, here's what I think...
If a company makes an offer and Microvision management turns it down then they [the suitor] have the option of going directly to the shareholders and try to get them to agree to a PPS rejected by the management. At that time, management would make their case to the shareholders why the takeover offer is too low and that there is more value to remaining independent.
If we can make a case on the back of a napkin for $100 per share in next 5 years, then I am sure a Six Sigma Master Black Belt CEO of Microvision can do the same. The current management team did not come to Microvision to preside over the sale just as they are about to achieve commercial success.
Here are some back-of-the-napkin CONSERVATIVE figures…
Five years from now in 2014, the stock could easily trade in the $300 to $400 range. Here’s the projection…
• Worldwide Market Size: 2 billion units [cell phones, laptops, smartphones, camcorders, digital cameras, mobile TV/Projectors, etc.]
• Worldwide Market Size: 1 billion units [wearable displays]
• Market Adoption Rate: 10%... 300 million units
• Microvision Market share: 15% of 300 million units… 45 million units
• OEM price: $90 per PicoP display engine
• Revenue: $4 billion
• Net Profit Margin: 40%
• Net Profit: $1.6 billion
• EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization: $1.55 billion [with operating expenses at $50 million]
• Interest Expense: $0 million
• Interest Income: $20 million
• Tax: $120million
• Depreciation: non cash and very small
• Amortization: non cash and very small
• Net Operating Income: $1.5 billion
• Earning Per Share: $16.60 on a fully diluted basis [90 million shares]
• Price Earning Ratio: 30 for a hyper growth company
• Price Per Share: $500 per share approximately
In my book, the Risk is insignificant [may be 3% per year in lost opportunity] as compared to the potential of making 100 times your money in the next 5 years.
A standard way to value a company, or any investment, is the Dividend Discount approach. Other closely related approaches are: Discounted Cash Flow, Free Cash Flow, and Economic Value Added (EVA), a trademark of Stern & Stewart. To use any of these methods, the analyst projects future payoffs to the investor, then discounts these payoffs to their present value.
No matter what approach you choose, you still have a hyper growth company that is worth at least high double digit PPS in today’s value.
As someone said…
“This is a $100 stock in a $5.28 wrapper.”
The competition knows that.
Anant Goel
http://www.wealthbyoptions.com/
Well, here's what I think...
If a company makes an offer and Microvision management turns it down then they [the suitor] have the option of going directly to the shareholders and try to get them to agree to a PPS rejected by the management. At that time, management would make their case to the shareholders why the takeover offer is too low and that there is more value to remaining independent.
If we can make a case on the back of a napkin for $100 per share in next 5 years, then I am sure a Six Sigma Master Black Belt CEO of Microvision can do the same. The current management team did not come to Microvision to preside over the sale just as they are about to achieve commercial success.
Here are some back-of-the-napkin CONSERVATIVE figures…
Five years from now in 2014, the stock could easily trade in the $300 to $400 range. Here’s the projection…
• Worldwide Market Size: 2 billion units [cell phones, laptops, smartphones, camcorders, digital cameras, mobile TV/Projectors, etc.]
• Worldwide Market Size: 1 billion units [wearable displays]
• Market Adoption Rate: 10%... 300 million units
• Microvision Market share: 15% of 300 million units… 45 million units
• OEM price: $90 per PicoP display engine
• Revenue: $4 billion
• Net Profit Margin: 40%
• Net Profit: $1.6 billion
• EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization: $1.55 billion [with operating expenses at $50 million]
• Interest Expense: $0 million
• Interest Income: $20 million
• Tax: $120million
• Depreciation: non cash and very small
• Amortization: non cash and very small
• Net Operating Income: $1.5 billion
• Earning Per Share: $16.60 on a fully diluted basis [90 million shares]
• Price Earning Ratio: 30 for a hyper growth company
• Price Per Share: $500 per share approximately
In my book, the Risk is insignificant [may be 3% per year in lost opportunity] as compared to the potential of making 100 times your money in the next 5 years.
A standard way to value a company, or any investment, is the Dividend Discount approach. Other closely related approaches are: Discounted Cash Flow, Free Cash Flow, and Economic Value Added (EVA), a trademark of Stern & Stewart. To use any of these methods, the analyst projects future payoffs to the investor, then discounts these payoffs to their present value.
No matter what approach you choose, you still have a hyper growth company that is worth at least high double digit PPS in today’s value.
As someone said…
“This is a $100 stock in a $5.28 wrapper.”
The competition knows that.
Anant Goel
http://www.wealthbyoptions.com/
Microvision: Take Over Target (Part 1)
This is a subject that I bring-up from time to time… because it is in the realm of possibilities for any company that has a superior product in a huge market, the size of what’s out there for a quality PicoP display engines.
So, here we go with our musing two days before the 3rd Qtr conference call that was announced this morning and is set for Thursday after the market close… on October 22nd, 2009.
There are possibly four companies that could greatly benefit from the "buyout" of Microvision at such humbled stock prices like $5.48 today. The reason I say “humbled” is because a few years ago, in the year 2000, Microvision stock [NASDAQ: MVIS] traded as high as $63 dollars. Of course you could argue that it’s the “market cap” that counts and not just the share price. You are right, and we will let you use that when you come to the table to negotiate the price.
With so much money now freed-up in the financial markets [at so low interest rates] it is tempting for the established [large] companies to gobble –up small competitors that threaten their turf. And Microvision is a major threat for sure to those that came to the Pico projection market with inferior technology that consumer has more or less ignored.
Here’s the line-up of potential suitors, some gentlemanly and the others not…
TEXAS INSTRUMENTS (TI):
TI has finally realized that the scaled-down DLP [Pico projector] still runs too hot, is noisy, requires huge power, is way too big for the small screen size, requires constant manual focus and is too expensive to make. TI sells their DLP chip [for the classic DLP projectors] for close to a thousand dollar. No matter how much cheaper they make their scaled down DLP chip [or sell for lower margins] the cost will still be over a hundred dollars. Not only that, TI will be cannibalizing their classic DLP projector chip, in one form or the other, to capture the Pico projector market from the likes of Microvision [with a much cheaper 2D MEMS and laser based technology].
TI and its technology partners will bring a LED/DLP based Pico projector and compete in the standalone market. However, there will always be the issue of "manual focus", "image size", “power consumption”, “unit size” and "image quality". And these issues become very significant when you consider the embedded market for cell phones and smartphones.
In the long run, TI will find it cheaper to [hostile] takeover Microvision rather than let-go the most profitable and huge Pico projector market and also risk the loss of revenue stream from their classic DLP chips. Over time, I would think much of everything done by a DLP chip could be done with a PicoP derivative. Would TI sit on their hands while their DLP cash cow suffered massive market share erosion to PicoP?
No way!!!
MOTOROLA (MOT):
On the other hand you have MOT desperate for new technology to jump start their handset business. Especially now, with the spin-off of the handset division still on the books, I am sure MOT [or the new buyer in the future] would love to have the PicoP display engine business to themselves and be the gate keeper to the embedded Pico projector market.
Please note…
[On March 26, 2008, Motorola's board of directors approved a split into two different publicly traded companies. This came after talk of selling the handset division to another corporation. These new companies would comprise the business units of the current Motorola Mobile Devices and Motorola Broadband & Mobility Solutions. Originally it was expected that this action would be approved by regulatory bodies and complete by mid-2009, but the split has since been indefinitely delayed due to company restructuring problems and the 2008-2009 extreme economic downturn.]
But what about Nokia, Sony and the other cell phone OEMs? Would they get in the bidding if PicoP became the defacto standard for the embedded market? If I am the CEO at Nokia, I don't want to be writing checks to MOT [or the new buyer] for huge quantities of PicoP display engines?
CORNING (GLW):
There are some speculations about Corning as the potential buyer of Microvision.
The idea is not far-fetched. However, it is unlikely. Corning is not in the habit of getting involved with an army of supply chain vendors of components and services and manufacturing OEMs infrastructure. Corning does well with what they do… because they run a tight ship and control quality thru vertical integration.
But, who knows? Strange things happen in the technology-land these days!!!
APPLE (AAPL):
Apple has to maintain a healthy double digit growth rate to even think about maintaining their $170B market valuation. If they are the brilliant innovators of [consumer] tech then they already know that the projection of video content is the future. Microvision’s PicoP projector will be a disruptive addition to the personal electronics industry within the next year or two. Right now its eye candy to implement a projector into an iPod or an iPhone since it requires add-on attachments to actually make it work; you might as well buy a micro projector.
But I must say that the embedded version of the PicoP is definitely an innovative technology and that’s what Apple usually wants. Apple [and Steve Jobs] tends to want and see what consumers want, then refine it and make it desirable to have. My best guess is that Apple won’t incorporate projectors into iPods [and iPhones] for at least for a while. When the PicoP technology develops more and proves to be a little more portable, Apple may just step in.
Apple has over $30B in cash under Steve Jobs and he is known to lock-up the “best” technology and make it his own… especially when such a technology like PicoP projectors can make his star performers [iPod and iPhone] a second rate product… because of lack of incorporating an obvious innovation to its mobile product line. It may take a year or two, but it will happen… in some way or form. One thing’s for sure though, Apple knows what they’re doing in the interest of their customers.
But the stakes are huge for a number of companies [like Sony, Nokia, Epson, Samsung, LG Electronics, etc.], so it is going to be very interesting to see how this plays out.
Here’s the latest update to Microvision news that is sure to stir-up the bees hive abuzz…
After three years of hard work, anxious wait for green lasers and sweating it each passing day, and 115 issued patents later, the world’s first laser based PicoP projector was commercially launched on September 15th, 2009.
Not only that, another announcement was made [on 10/8/2009] of a major OEM purchase order 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…
“…validates the performance and quality of our first laser projector offering. On the heels of announcing our first shipments of the SHOWwx laser pico projector, and receiving the purchase order from an international distributor, this is another significant milestone in our go-to-market strategy.” ... Alex Tokman, CEO of Microvision.
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 two purchase orders from global consumer electronic OEMs 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 SHOWwx.
• Validation of Corning's 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… DLP/LED from Texas Instruments and LcoS/LED from 3M.
By the end of 4th quarter this year, we will have much more visibility and better indication of where Microvision is headed.
Here’s the link to Microvision’s best…
http://www.microvision.com/displayground/
[Click on “New ways to see” post]
http://www.microvision.com/displayground/?m=200908
In closing, I must emphasize one more point…
“Aside from Pico projectors, so far, no new “must have” gadget has appeared, unlike previous years when devices like Sony Corp's PlayStation 3; Nintendo's Wii; or Sirius satellite radios and myriad of digital cameras were launched to woo the electronic gadget shoppers.”
"Smartphones are the exception to the above statement. However, smartphones are all about features… and what’s more desirable, as a feature in a smartphone, than a quality PicoP projector as an accessory or as built-in."
Well, the pot of honey has been sighted and I’m sure there’s a “Bear” lurking in the PicoP jungle.
Stay tuned and we will keep a “watch-on” for you.
Anant Goel
http://www.wealthbyoptions.com/
So, here we go with our musing two days before the 3rd Qtr conference call that was announced this morning and is set for Thursday after the market close… on October 22nd, 2009.
There are possibly four companies that could greatly benefit from the "buyout" of Microvision at such humbled stock prices like $5.48 today. The reason I say “humbled” is because a few years ago, in the year 2000, Microvision stock [NASDAQ: MVIS] traded as high as $63 dollars. Of course you could argue that it’s the “market cap” that counts and not just the share price. You are right, and we will let you use that when you come to the table to negotiate the price.
With so much money now freed-up in the financial markets [at so low interest rates] it is tempting for the established [large] companies to gobble –up small competitors that threaten their turf. And Microvision is a major threat for sure to those that came to the Pico projection market with inferior technology that consumer has more or less ignored.
Here’s the line-up of potential suitors, some gentlemanly and the others not…
TEXAS INSTRUMENTS (TI):
TI has finally realized that the scaled-down DLP [Pico projector] still runs too hot, is noisy, requires huge power, is way too big for the small screen size, requires constant manual focus and is too expensive to make. TI sells their DLP chip [for the classic DLP projectors] for close to a thousand dollar. No matter how much cheaper they make their scaled down DLP chip [or sell for lower margins] the cost will still be over a hundred dollars. Not only that, TI will be cannibalizing their classic DLP projector chip, in one form or the other, to capture the Pico projector market from the likes of Microvision [with a much cheaper 2D MEMS and laser based technology].
TI and its technology partners will bring a LED/DLP based Pico projector and compete in the standalone market. However, there will always be the issue of "manual focus", "image size", “power consumption”, “unit size” and "image quality". And these issues become very significant when you consider the embedded market for cell phones and smartphones.
In the long run, TI will find it cheaper to [hostile] takeover Microvision rather than let-go the most profitable and huge Pico projector market and also risk the loss of revenue stream from their classic DLP chips. Over time, I would think much of everything done by a DLP chip could be done with a PicoP derivative. Would TI sit on their hands while their DLP cash cow suffered massive market share erosion to PicoP?
No way!!!
MOTOROLA (MOT):
On the other hand you have MOT desperate for new technology to jump start their handset business. Especially now, with the spin-off of the handset division still on the books, I am sure MOT [or the new buyer in the future] would love to have the PicoP display engine business to themselves and be the gate keeper to the embedded Pico projector market.
Please note…
[On March 26, 2008, Motorola's board of directors approved a split into two different publicly traded companies. This came after talk of selling the handset division to another corporation. These new companies would comprise the business units of the current Motorola Mobile Devices and Motorola Broadband & Mobility Solutions. Originally it was expected that this action would be approved by regulatory bodies and complete by mid-2009, but the split has since been indefinitely delayed due to company restructuring problems and the 2008-2009 extreme economic downturn.]
But what about Nokia, Sony and the other cell phone OEMs? Would they get in the bidding if PicoP became the defacto standard for the embedded market? If I am the CEO at Nokia, I don't want to be writing checks to MOT [or the new buyer] for huge quantities of PicoP display engines?
CORNING (GLW):
There are some speculations about Corning as the potential buyer of Microvision.
The idea is not far-fetched. However, it is unlikely. Corning is not in the habit of getting involved with an army of supply chain vendors of components and services and manufacturing OEMs infrastructure. Corning does well with what they do… because they run a tight ship and control quality thru vertical integration.
But, who knows? Strange things happen in the technology-land these days!!!
APPLE (AAPL):
Apple has to maintain a healthy double digit growth rate to even think about maintaining their $170B market valuation. If they are the brilliant innovators of [consumer] tech then they already know that the projection of video content is the future. Microvision’s PicoP projector will be a disruptive addition to the personal electronics industry within the next year or two. Right now its eye candy to implement a projector into an iPod or an iPhone since it requires add-on attachments to actually make it work; you might as well buy a micro projector.
But I must say that the embedded version of the PicoP is definitely an innovative technology and that’s what Apple usually wants. Apple [and Steve Jobs] tends to want and see what consumers want, then refine it and make it desirable to have. My best guess is that Apple won’t incorporate projectors into iPods [and iPhones] for at least for a while. When the PicoP technology develops more and proves to be a little more portable, Apple may just step in.
Apple has over $30B in cash under Steve Jobs and he is known to lock-up the “best” technology and make it his own… especially when such a technology like PicoP projectors can make his star performers [iPod and iPhone] a second rate product… because of lack of incorporating an obvious innovation to its mobile product line. It may take a year or two, but it will happen… in some way or form. One thing’s for sure though, Apple knows what they’re doing in the interest of their customers.
But the stakes are huge for a number of companies [like Sony, Nokia, Epson, Samsung, LG Electronics, etc.], so it is going to be very interesting to see how this plays out.
Here’s the latest update to Microvision news that is sure to stir-up the bees hive abuzz…
After three years of hard work, anxious wait for green lasers and sweating it each passing day, and 115 issued patents later, the world’s first laser based PicoP projector was commercially launched on September 15th, 2009.
Not only that, another announcement was made [on 10/8/2009] of a major OEM purchase order 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…
“…validates the performance and quality of our first laser projector offering. On the heels of announcing our first shipments of the SHOWwx laser pico projector, and receiving the purchase order from an international distributor, this is another significant milestone in our go-to-market strategy.” ... Alex Tokman, CEO of Microvision.
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 two purchase orders from global consumer electronic OEMs 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 SHOWwx.
• Validation of Corning's 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… DLP/LED from Texas Instruments and LcoS/LED from 3M.
By the end of 4th quarter this year, we will have much more visibility and better indication of where Microvision is headed.
Here’s the link to Microvision’s best…
http://www.microvision.com/displayground/
[Click on “New ways to see” post]
http://www.microvision.com/displayground/?m=200908
In closing, I must emphasize one more point…
“Aside from Pico projectors, so far, no new “must have” gadget has appeared, unlike previous years when devices like Sony Corp's PlayStation 3; Nintendo's Wii; or Sirius satellite radios and myriad of digital cameras were launched to woo the electronic gadget shoppers.”
"Smartphones are the exception to the above statement. However, smartphones are all about features… and what’s more desirable, as a feature in a smartphone, than a quality PicoP projector as an accessory or as built-in."
Well, the pot of honey has been sighted and I’m sure there’s a “Bear” lurking in the PicoP jungle.
Stay tuned and we will keep a “watch-on” for you.
Anant Goel
http://www.wealthbyoptions.com/
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