MEMS pricing and Sony Announcement

I'm stepping out on a limb here, but I think in understanding Microvision's current situation this is an important consideration.

(If anyone thinks I got anything wrong in here, please send me a challenge!) 

Last week, Microvision announced a deal with Microvision for $1.9 Million in components from it's Global 100 customer. (Which we know is Sony, but they are still unable to say this.)

The key word is "components."

Microvision has stated in no uncertain terms that they will have three separate revenue streams:

• Components
• Licensing
• Royalties

It is my analysis, that the reason the components are part of this picture is to insure that Microvision can retain rather tight control over its technology. In which case there isn't a business reason to price the components at a high price -- which would mean that the component sale is a very small part of the revenue in this deal with the global fortune 100 company.

EVERYTHING BELOW is based on a SWAG

I expect that the component order is for the MEMS (or "secret sauce") of Microvision's PicoP. This $1.9 Million in components very likely represents significantly more in ultimate revenue to Microvision.

I do NOT know how much MEMS components would be sold for. As a licensing deal, I would assume that Microvision isn't going to be trying to make as much as possible on each MEMS unit,
but more on the licensing portion & hopefully something on the royalty portion.

It is very difficult to know what MEMS prices may be. There are many many vagaries and unknowns. I have perused a number of meme manufacturer sites for pricing the target is huge, and again, there is a lot of unknown.

I have seen prices for MEMs as low as $0.14 each to up to $5.00. The $5 numbers were on smaller quantities of more complex MEMS. After reviewing a number of those sites a $1 price tag for MEMS seems like both a reasonable and somewhat conservative price. The link just below opens a site that I've used as my "middle." (if you have better information, please share.)

Given that a million units was quoted as the break-even point for Microvision. (Stockholder meeting June 2014)  We can expect that the income per PicoP will be at least $12 when all is said and done.

If the mems are $1. I expect that conservatively, the Global Fortune 100 order was for at least 1.9 million PicoP units. Which should mean approximately $23 million in total revenue to Microvision.

Price of Specialty MEMS   -- $1each

Press Release @ Micro vision