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Sunny Side Up

(With apologies to Peter King of Sports Illustrated)

Five Things I Think I Think:

1. I think Bill Belichick is making a push for the Hall of Fame. His steady, one game, one play, one practice at a time mentality keeps the Patriots players focused on their job and not overwhelmed by any situations they may find themselves in. They play tough, smart, disciplined football week in, and week out. It's easy to imagine Belichick with a Nomad that relays the game clock and play clock, down and distance, the playbook, personnel packages, etc etc. With wireless sensors embedded in the players' uniforms, Coach would also be able to substitute players before they became tired enough to make a costly mistake.

2. I think Microvision suffers from a simple lack of recognition by the general public. Investors are either completely overlooking the company or simply don't believe them when they say things like "we believe the market for our miniature displays can reach tens of millions of units annually [in the next several years]". I mean, think about this for just a second. Tens of millions of units. At a $40 royalty per unit, this gets into billions of dollars a year pretty quickly. For me personally, I'm just not willing to brush off company statements like this as just blue sky optimism or hyperbole. I think there is an extremely high probability that they will indeed sell tens of millions of units and eventually hundreds of millions of units of scanned beam displays annually, making Microvision a large cap company in the process.

3. I think an important thing to remember is that Microvision doesn't need to be directly involved in manufacturing anything themselves for these massive unit volume consumer product rollouts. Their large, deep-pocketed partners like Canon and who-knows-who-else will set up the assembly lines and crank out tens of millions of scanned beam display engines to incorporate in their products as they see fit. We end up with a tidy royalty per unit and zero overhead. The 'intellectual property licensing' business model is just about as efficient as it gets.

4. I think the company's image capture technology could be just as lucrative as their display technology. Microvision's Laser Scanning Camera unveiled last year, and the 2D Bar Code Scanner development contract awarded this May portend a low-price, high-performance laser camera that could very well be embedded in a cell phone. Microvision could conceivably package a display, bar code scanner and camera in a single cell phone. Keep your eye on developments involving incorporation of bar code scanning capabilities in cell phones -- this is yet another huge potential market for the company.

5. I think the MicroHUD is a slam-dunk product. I've talked a fair bit about why laser HUDs are inherently superior to LCD-based HUDs. From the PR last week: "The new development contract, which is the third awarded by Volkswagen of America, continues prior efforts and supports the development of a compact head-up display designed to meet specific size and performance specifications for future car generations." One of the things that occurs to me is that automakers like VW (who also owns Audi and Porsche) are increasingly using the same platforms across multiple makes and models. For example, the same underpinnings are used (the 'A' platform) in the VW Golf, VW Jetta, VW New Beetle, and Audi TT. The company's 'B' platform is used for both the VW Passat and Audi A4. This leads me to think that when the MicroHUD is incorporated for the first time in a VW vehicle, it will very quickly appear in multiple models across VW's brands.


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