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A few things struck me about yesterday's news regarding Microvision's development agreement with a Laser OEM for low-cost miniature green lasers. Some of these have been touched on by a couple of people on the Yahoo! MVIS message board. All thoughts in my humble opinion only and not the gospel truth:

It's important to remember that the large majority of Microvision intellectual property is related to the design of the scanning elements, rather than the light sources of scanned beam displays -- these being the MEMS devices themselves, the electronics and software algorithims to drive the MEMS, and the optics to deliver the reflected light to the wearer/user.

As a result of this focus, Microvision has a very large and robust patent portfolio that describes some truly fundamental design elements of light scanning, as well as coverage of hundreds of specific inventions and designs -- however, the company has a dependency on the availability of low-cost, high-brightness laser light sources in order to take their products to market. Red and blue laser light sources, which are small enough, bright enough, and cheap enough to fit as components inside Microvision's IPM, are apparently readily available.

Microvision has now partnered with a Laser OEM to develop and supply a green light source that fits the requirements of size, cost and performance to meet Microvision's target specifications for certain IPM configurations.

As Tokman mentioned in yesterday's PR, "We've witnessed some incredible gains over the past year in [green laser] design and development. We have decided to take greater control of our destiny by being more actively engaged in the definition, development and maturation of cost-effective solid-state high-frequency modulated green lasers."

The fastest and cheapest possible way for MVIS to complete their IPM configuration and supply chain is to directly partner with a Laser OEM, in order to create a new green laser device, using the OEM's equipment and expertise, that meets Microvision's performance and size requirements. Rather than making efforts to modify off-the-shelf components, or waiting on the Laser OEM's timelines for bringing a suitable device to market, MVIS is taking control.

Venturing into speculation -- I believe that this move is about taking control and accelerating the timeline for bringing the IPM to market for PicoP. While it will make sense to leverage the same components across all IPM configurations (ie, MicroHUD), the package size requirements for MicroHUD are likely more forgiving than those for Eyewear or the Picoprojector, meaning existing green light sources are probably OK.

If you were a potential mobile phone OEM that was interested in an embedded PicoP inside your next generation product, you would want to have some assurance that the IPM component supply chain would be robust and enough units would be available to meet projected demand. Microvision appears to be squaring up and tackling the issue of the availability of an ultra-miniature, low-cost green laser head on by directly funding its development.

As Tokman mentioned in a discussion of PicoP on June 7, "We are about a year away from completing a detailed reference design and are targeting product introduction within the next two years. The availability of the commercially viable green laser is a key enabler for this application and we are excited about the progress made by several green laser manufacturers over the past six months."

Now Microvision appears to have selected one green laser manufacturer above all others to partner with directly as the supplier of this critical component. Microvision is now in the driver's seat. The ultimate solution to mobile multimedia has just been accelerated.

3 comments:

At July 28, 2006 at 5:40 AM Anonymous said...

There is an interesting press release at www.novalux.com. It does not mention MVIS, but it does refer to the Pico Projection. The press relase talks about funding and partnership from Unaxis Optics. From there you can go to www.unaxis.com and read about their businesses. This will open a train of thought to lots of speculation, but Novalus can make green lasers and Unaxis can provide production and integration....maybe. At least it makes for interesting reading.


Jim D.

 
At July 28, 2006 at 10:32 AM Anonymous said...

The technology is great and very promising, no question. However, if it is going to take two years or more before we see significant revenues, then I think that we need to worry more about the available cash than the technology. Further dilution before that time could bring the stock into the penny range and make it hard to continue operations.

-hbolsen

 
At July 28, 2006 at 10:38 AM Ben said...

It's a question of visibility -- if you know for certain that PicoP or MicroHUD are going to be in production in 2008, then the stock will reflect that and be sharply higher -- offsetting any additional dilution.

That said, I would think that any design wins would include some upfront cash as well. Design wins will necessarily happen well in advance of products hitting the shelves and the company has previously stated its goal in 2006 is one or more design wins for HUD.

 

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