Monday, November 13, 2017

Transitioning from the Bleeding Edge to the Leading Edge

I am "Pinning" this post to the top for a while.

If you can find a good up and coming technology to invest in, you can end up holding stock in a company that will pay you enormous returns. Think Apple, Microsoft, Nvidia and Google --companies that went from the bleeding edge of technology to the leading edge.

Notable investor Ronald Wayne, is an excellent example of a "smart investor" who missed the gains possible in holding a "bleeding edge company." In 1976 he was one of the first investors in Apple computer company. He was a 10% stakeholder and sold his stake for $800. He did double his money in 12 days, but had he held onto his investment it would be worth 90 Billion today.  Ronald Wayne

Now, not all bleeding edge companies make it to the leading edge. However, if you can find a company that is transitioning from the bleeding edge to the leading edge, you can avoid a lot of the risk the early investors took, and get most of the gains. The sweet spot to find one of these companies is when it's making the transition.

Of course to find the right company now, you'd look to something that was going to be a key component of an up and coming new technology. 

  • Mobile technology is still in its infancy -- find the next must-have feature, and you're golden. 
  • Personal assistants, like the Amazon Echo or the Google Home are gaining popularity, and will likely become more and more common, and more widely available everywhere -- especially if video features can be conveniently added to them. 
  • The Internet of Things is talked about everywhere, more and more powerful computers are being put in everyday items. If you're old enough to remember the 1990's a powerful personal computer of the 1990's was required to play the game "DOOM" -- but that computing horsepower is now available in a thermostat. [Doom on a Thermostat] The thing about that computing horsepower is that people need a good way to interact with it, that will be a key component.
  • Augmented Reality, the ability to enhance the world you see with computer generated information, is so new most people have seen little of it except perhaps an experience with Pokemon Go. They're getting great results with this technology in industry, greatly increasing productivity -- and it's a wild fantasy of gamers. It will be bigger than Virtual Reality -- it brings people together, or it can. Virtual reality isolates them. 
  • Self Driving Cars and Automation: I know self-driving cars are controversial -- they're not going to happen all at once though. They're going to happen a little at a time. More and more sensors will appear, the ability to automate some functions of the car, and the ability of the car to process the sensors' information and intervene when necessary is going to increase. No one is complaining about cars automatically NOT hitting pedestrians, or parking themselves, or alerting us when there's another car in our blind spot. This happens through primarily sensors that can detect and identify other objects.
If you want to do a good job investing in future technology, you could find a good company in each space -- but finding a good company that is publicly traded in each specific space could be tedious. You could invest in ST Microelectronics, absolutely nothing wrong with them, or Intel, or Google. However I think there's a way to invest in a company that has much greater growth potential, and it's poised to provide key components in ALL of those areas. 
  • Mobile Technology
  • The Internet of Things - Personal Assistants
  • Augmented Reality
  • Self Driving Cars & Automation
The Ticker symbol is MVIS

I'll keep this as brief and complete as possible, you can explore the rest of the blog....

Pico Projection -- Mobile Phone Technology

Why? Because of the picture below. Want to share your pictures? Would you rather share it with the picture on the phone below (at the bottom, slightly to the right of the center of the picture is my phone.) It's showing the same image as the PicoP powered projected large image, everyone can see it at once. (yes the crab were delicious.)

When I ask people "so, of the smart phones made in the world, how many of them do you think will eventually get a projector like this?"

The most common answer is "all of them." I have a link to a price calculator below, and you can see the difference between 10% and "all of them."

Would you like a six foot screen in your Phone? This phone is now available in China, and Romania, and soon will be in Brazil, and India. (45%+ of the worldwide smartphone market.) 

Personal Assistants & Internet of things: Put a sensor in that projector and turn it into a touch screen. This projector product should be available for purchase in the second half of 2018. It can be included in personal assistants, appliances, and anywhere else a touch screen would be desirable.

Below is another prototype that uses MicroVision's technology. How would you like it if your Amazon Echo or your Google Home speaker could do this? 

Augmented Reality: This is an area that is just getting started. Most people are unaware this is possible, but it's probably going to be huge.

Pokemon' Go was an early augmented reality game, and Microsoft is having a lot of early success with its Hololens

MicroVision is working on Augmented Reality, displays; I do not know with who, and haven't seen a recent example. I have seen an old augmented reality display from MicroVision however, and it was much more impressive to me than other displays that were being shown at the time.

 In 2015 I attended the Consumer Electronics Show in Las Vegas. I tried every "augmented reality" item I could find, and none of them got even close to the contrast, and field of view that MicroVision's NOMAD system. (listen to what they say about the NOMAD display's business model below. That business model is becoming a reality. 
 [Augmented Reality Increasing Productivity]

 At that time I was told that what they have now is much better. I wish I could say I have seen it in person, but I haven't.

Are lasers (MicroVision's realm) going to be used? Nvidia thinks so, and they think that EVERYONE will be using augmented reality. (NVidia at SIGGRAF 2017) All good, but for our purposes, be sure to observe from 4:25-5:45! 

Below is a video of how Microsoft Imagines Augmented Reality. 

And Augmented Reality Games, below. I know these samples are from Microsoft, but that doesn't mean that they will be the only player, but for displays, I believe MicroVision will be key.

Scanning LiDAR

A huge problem with most automated things that move is that you don't want them to crash into things. If it's a moving arm, a robot, a truck, car, forklift, or gigantic digging machine. Scanning LiDAR is where it's at for those sensors. MicroVision's product is much smaller than competition, (and shrunk again by a factor of eight!) and they are in the mid-range sweet-spot of importance. Knowing where things are at a distance and close up is good, but most of the important decisions are made in the mid range. 

"Kevin Watson, senior director of product engineering at Redmond, Wash.-based MicroVision, a publicly held company, disagrees. “I don’t think that’s going to go anywhere,” he said of flash LiDAR. “For many years, the Holy Grail of LiDAR sensors we thought to be a MEMS mirror-based laser scanner, because they’re super-small, relatively inexpensive to manufacture in great quantity, and very reliable. They’re small enough to hide several around an automobile.”

Watson calls LiDAR “the most important sensor” in automotive electronics. “Vision systems are great, but they’re a totally passive system. LiDAR is active.” 

Mr Watson left Velodyne to work on the Holy Grail of LiDAR sensors at MicroVision.

It can also do 3D mapping for things like autonomous cars, robots, making movies, or creating content for Augmented reality. (And I'm sure more.

MicroVision Partners

ST Microelectronics 


Customers: Samsung, Sony and Lenovo

WPG Holdings The largest distributor of semiconductor components in Asia

Sharp / Foxconn Robohon is a sharp product, and Foxconn now owns a controlling interest in Sharp. (Robohon Video)

SONY   Sony has several products with MicroVision's PicoP inside, The relationship with Sony seems to have been problematic, but Sony is still in a position to produce products with MicroVision's technology inside. Products included: celluon PicoPro, and the Sony MPCL1 Laser Pico Projector, A cellphone with an embedded laser projector the Qualper phone has been shown but apparently not released: Qualper Phone

So how good is MicroVision's Intellectual Property? [ PatentVue ]

"Microvision Inc. made our list as the largest US patent holder in this space, owning 289 US patents primarily related to hardware components for augmented reality systems, with a focus on miniaturized MEMS and PICO level systems. Another smaller company is this space with significant patent protection is Kopin Corporation, with 206 relevant patents."

Microvision has been a company for the last 20 years that has been on the "bleeding edge" of technology. They have had to wait for some technologies (lasers) to catch up with them, and even had the lasers existed to do what they wanted to do ten years ago, the content landscape wasn't quite ready.

Where could this go? Well, if I'm conservative and say the company profits $5 per projector unit, and it goes into 10% of the world's smartphones and everything else fails? Then this thing will be trading about 200 times what it is now. If it does better? Sky is the limit. Check the price target calculator below, and put in your own numbers.

The sweet spot is to catch a company when it transitions from the bleeding edge of technology to the leading edge -- and I am long this company. I have endured the bleeding edge pain -- but things are going to get interesting as products are going into production now.

There's more, check out these past posts, and dig around a lot. There's way more out there than is on this blog.

Surface Phone
Price Target Calculator


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