Haptics, less than it feels? Published 5.10.2016
LWRAS has been interested in the haptics market for years, and has been a long term investor in Immersion [Nasdaq: IMMR]. Immersion owns significant intellectual property (IP) in the haptics area, and has enjoyed success in defending against infringement by much larger companies.
In the past, Immersion has received damages and more importantly, licensing fees from a number of much larger companies. But now the company is tangling with Apple and Samsung at the same time. Samsung had licensed Immersion's technology for a number of Galaxy models, but chose not to do so for the Galaxy 7. This almost guarantees that Immersion will be suing Samsung for infringement in the future, though for the moment the two companies are in arbitration. In the nearer term, the two companies may be heading to court with residual licensing fees from sales of older Galaxy models that do have the Immersion technology in them.
The problem is that the amount earned from each cell phone that uses haptics is small and shrinking. Immersion claims to have a seminal position in the industry, and given its past success in court challenges, that assertion is stipulated as true. However, innovation continues and there is no guarantee that future challenges will be successful. Apple, in particular, is aggressive when defending its own IP.
As background for the above comments, notes from the 2015 fourth quarter
(2105Q4) and the first quarter 2016
(2016Q1) conference calls are listed below.
Notes from Q12016
- Revenues were down 16%, cratering the stock price. The shortfall is basically Samsung. Revenues are royalties on IP. Immersion has different licensing agreements, some have fixed fees, others are based on a variable scale. Most royalties are variable.
- Automotive sales were up 9%, medical revenues were up 135%— but that was anon-recurring sales. So don’t count on that for future growth.
- They are cutting headcount, although they claim they are still hiring.
- They filed a second infringement complaint against Apple, and included a a complaint against AT&T and AT&T Mobile.
- At this point, most of Immersion’s efforts have to do with defending its IP, which it legitimately has— Immersion is not a patent troll.
- The Samsung arbitration is expected to finish in the fall.
- Touchsense is finding a market in China.
Notes from Q42015
- Immersion has a collaboration with Google. Would Google buy Immersion?
- Tencent is one of largest internet companies in China. Have agreement with them too.
- Virtual reality (VR) should be a big market for them. though that’s years off. Right now, VR=goofy looking visor with your phone inside it. Might be cool for education purposes (or porn??) but otherwise… Lil’ Wayne just lookin’ stupid to this viewer.
- Samsung is worth about $16.6 million per qtr. Not an immaterial amount for the company.
- Non Samsung biz growth is 33%.
- In the automotive market, they claim there are new wins. They do not say how much per car.
- Samsung smart phones sold per quarter in round numbers is 85 million. For the year, IMMR says Samsung accounted for $20 million of its revenues, and that the run rate was static. So, figure $5M per qtr due to Samsung. there fore: 5/85 = .059 per phone if you assume that every smart phone has haptics.
- Apple claims to have invented its own version of haptics, which is why Immersion is suing them.
- Phones are never going to be a big margin or big total amount of revenues. IMMR needs to push into other fields.
- They have wins in the game area from Gionee and Huawei— but maybe those are phones too. Not Shaume though (yet).
- Touch pads on PCs they see interest but beyond phones it’s mobile gaming, mobile advertising PCs (as above) and tablets.
- $14-16M in litigation expense is the estimate. There's a lot of uncertainty in revenue numbers due to litigation.
What is LiFi and will it take over the internet? Published 5.5.2016
The internet is ubiquitous, are are WiFi wireless signals transmitting data to and from devices, be they phones, laptops, or other. WiFi uses radio waves in the infrared (IR) to transmit signals, and signal power is limited for health reasons. There is another way to wirelessly transmit data, and that's with light. So-called LiFi technology
uses modulated signals from light emitting diodes (LED) or lasers to transmit data.
The spectrum available in visible light is 1000 times greater than the 300 GHz or radio and microwave, therefore there can be many more channels. The modulation methods are similar to those used for IR signals (such telecom signals, which means the science and technology are well understood).
Brief takes on energy Published 4.25.2016
It's hard to overstate the importance of energy for the US economy, which is why LWRAS
keeps returning to the topic. Oil remains a huge portion of the energy used, particularly in transportation. Oil is not used much for power generation, though natural gas, which can be a by-product of oil drilling represents a significant percentage of power generation in the US.
Natural gas is harder and more expensive to ship long distances, and therefore is more typically used closer to the source. The US has huge reserves of natural gas, also found in shale and mined via fracking techniques. The very low cost of natural gas, for at least the past five years, has lead power companies to switch from coal to natural gas.
The US also has huge reserves of coal. The relatively small amount of renewable energy power generation has not significantly impacted coal use. Cheap natural gas (nat gas) killed coal
more than renewables or even regulations. Certainly regulations on coal burning played a part, and will affect any attempt at future increases in coal usage. But it was nat gas that done the deed on the coal producers, though not everyone in the energy industry agrees with this assessment.Clean coal is not working out so far.
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