Of course this has happened. You’re in a conversation with someone who knows the entire story, except for the recent news, when someone new walks up, gets intrigued, and wants to hear the entire story. Pity the person who only wanted the latest tidbit. Don’t, however, ignore the person for whom it is all news. I’ve mentioned MicroVision for so many years that many roll their eyes, send mental daggers my way, or escape as soon as possible. And yet, there’s a new batch of people interested in the company, fresh with enthusiasm, who want to know more. It is for them that I write this long synopsis of MicroVision, a company with a technology that has intrigued, frustrated, and infuriated me for years – while continuing to be one of the most captivating investments I’ve ever held. My apologies to those who’ve heard this before (and who may know it better than I do). My welcome to any who are interested. My admission that, even with my semi-annual exercise, it makes sense for me to tell this story to myself, again.
MicroVision is a company founded on a basic technology, an ingenious innovation. If you take a mirror, shrink it to the size of a micro-chip, oscillate it back and forth and up and down, the chip can send and receive photons. Light can be captured and displayed. That is obvious but the implementation is not. By making the mirror so small it can move at high speeds. Shine red, green, and blue light on it; find ways to switch them on and off quickly; move the mirror quickly; and project an image. Reserve the process. Move the mirror quickly; have the reflected image shine on a series of sensors; and capture an image. Because the mirror is so small, the projector and the camera can fit into very small spaces, use very little power, and be potentially cheap and easy to use and manufacture.
They’re too numerous to list. For a guess, though, look around your world at all the ways images are displayed and captured. The technology can’t replace all of the existing solutions, but even a small slice of such a large market can create a very profitable company. The resulting products are quieter, lighter, and use far less resources than conventional solutions. MicroVision technology can be an upgrade that also improves the technology’s impact on the planet.
It hasn’t happened yet; despite over 15 years of effort. Some significant hurdles were crossed with the introduction of a new CEO a few years ago, and with the technical shift from LED light sources to lasers. Shifting to lasers required the crossing of another significant hurdle, the invention of an acceptable green laser, but laser projections are always in focus and exhibit high contrast. Lasers don’t have to fake black. They just turn off and save power. The image resolution is about that of HD, and getting better and brighter. The ingenuity also enables unexpected applications that could come to market at any time. One demonstrated capability is the ability to notice and react to a person’s hand, enabling them to interact with the image. These have been true for years, and the market and the shareholders wait.
Skipping the generalities, here are some specifics. MicroVision could enable:
- Projectors that fit in your pocket that can display images that are one foot bigger for every foot the projection travels. (Done, and available as a ShowWX, PicoAir, and PicoPro.)
- Projectors that fit in a cell phone that do the same. (Prototypes have been spotted.)
- Projectors built to act as TVs anywhere, speakers included. (Prototypes exhibited by Sony at CES.)
- Projectors that project dashboard information. (Prototypes exhibited by MicroVision, and supposedly in development by car companies, kitchen appliance manufacturers, and UPS.)
- Projectors that fit into eyewear. (Prototypes like Nomad and Spectrum exhibited by MicroVision years ago.)
- Cameras that can fit into medical equipment like endoscopes. (A prototype exhibited by MicroVision years ago.)
- Cameras that can read bar codes at very high rates. (Products like the Flic/ROV discontinued by MicroVision years ago.)
Just like with computers, however, the best applications will probably only be obvious after the products have hit the market.
The Reality, Revisited.
Unfortunately, the company’s finances forced the company to rely on others to develop the products. While MicroVision might want to create enormous billboards about their accomplishments and potential, any company considering using MicroVision’s technology is working in a competitive industry that forces them to keep as quiet as possible as long as possible. The result is that MicroVision says little, the investors know little, and the stock languishes.
Fortunately, after years of hearing about next year, next year, there has been significant news. Here I will direct you back to a previous post for details, but I’ll include the graphic here. Instead of a few possibilities and very little revenue, 2015 has seen several possibilities, record setting production revenue, and actual product launches. Celluon already launched the PicoPro and PicoAir, and is so pleased with the response that they are considering additional products. Sony has committed to payments of $8M and $14.5M prior to expected product launches later this year. The company has mentioned additional potential products from UPS, Ford, another car part supplier, a Fortune 500 smartphone, and several others.
The Oh, Too Familiar Situation
Any day now, really, any day now, a product or products can be announced that will be produced in the volumes in the millions, and eventually tens of millions. The concept is simple, as ingenious concepts are. The manufacturing and distribution are far more complex, yet solvable. The product manufacturers are in control, which means MicroVision is not. MicroVision’s fate and future are uncertain enough that many avoid the stock (MVIS), yet the potential is so great that those of us blogging about it find increased traffic that probably exceeds the actual number of shareholders.
Sources Outside MicroVision
First, I must point to the official company site, even though I find it provides little, for the reasons I’ve already mentioned. I blog about the company occasionally because it is one of the most potentially profitable holdings in my portfolio. Estimates range from the ever-present zero, to a few multiples over the recent $3, to as high as $3,333 – which I admit is incredible, yet mathematically plausible. Peter devotes his blog to far more aspects of news, analysis, and speculation. I also suggest joining the discussions on Investor Village, Silicon Investor, and The Motley Fool, so you can hear from more than just me.
My Short Version of the Long Synopsis
For me logically, the potential far outweighs the risks. For me, MicroVision has the potential to do to tablets what they did to laptops what they did to desktops what they did to mainframes. It is easy to imagine a smartphone with a projector out the front for a keyboard (see Celluon) and projector out the back for a display. It is easy to imagine eyewear that allows a person to watch whatever they want, wherever they want, and to have their iris scanned as a password replacement. Riding on the bus will look different. The potential is so large that estimates may only look credible in retrospect.
For me emotionally, so far the company could be an archetypical case study in over-promise and under-deliver. I expected profitability about a decade ago. My enthusiasm has never been met by the reality. While I am able to write this synopsis, my emotions include those of not wanting to lead anyone on, and not wanting to repeat what I’ve seen before – people buying without research, simply because I bought and mention my enthusiasm. I mention my cautions as well, but that has been too easy for others to discount.
My preferred method of investing is to buy small companies and wait for them to get big, then sell. (See my book, Dream. Invest. Live. for details and historical data.) I buy based on comparing the present value of future revenues discounted for risk. I’ve always picked a risk discount that wasn’t as severe as the markets, which is why it thinks the stock is worth about $3, while I think it is worth about $33. Make your own analysis. Check in with your logic and emotions, and don’t let either carry you too far without the other. The story continues, and changes every day, and any day could see the story dramatically improve. The only evidence that it might not is years of history.
Past performance is no guarantee of future results.