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Technology Stocks : InvenSense (INVN) -- Ignore unavailable to you. Want to Upgrade?

To: greatplains_guy who wrote (310)	11/18/2014 8:21:35 AM
From: The Ox	Respond to of 351

seekingalpha.com InvenSense builds the chips necessary to track motion in a variety of consumer electronics such as smartphones so the device can tell which way it has been tilted or for GPS-tracking capabilities. The VR industry would be a natural extension for INVN's chips, particularly if it can maintain industry-leading performance on size and efficiency on power as both are top concerns of VR manufacturers. The impact of the VR industry on INVN's revenue growth can be material as the company has around a $1.3 billion market cap and is expected to achieve $444M in revenue next year. If INVN grabs 2.5% of the projected $8.4 billion in aggregate VR hardware revenue from 2014 through 2018 as an input to the Oculus Rift and other VR devices, it collects $200 million in aggregate revenue during this time. This assumes that the conservative VR estimates aren't exceeded. The impact to INVN could end up being much more. STM is a competitor to INVN and remains a threat to compete for INVN's business within the Oculus Rift as well as provide the inputs it currently produces for the VR headset. STM's market cap is considerably larger at $6.2 billion and with projected revenue of $7.5 billion next year the company's contribution to the VR industry is not likely to impact it too significantly. However, as a leading-edge chip manufacturer, expect it to compete aggressively for this business regardless as all opportunities for growth will be pursued. Spectra7's contribution to the Oculus Rift remains the most interesting to risk-tolerant speculative investors as it has the smallest market cap at $80 million CDN and lowest revenue as an analyst expects $17 million in 2015. Like INVN, if it were to capture just 2.5% of the VR hardware market through its chip sales to Oculus and other manufacturers, revenues would be $210 million in aggregate and comprise the bulk of the company's business. Spectra7 continues to push the boundaries on the limits of VR technology as it released the VR7200 chip less than six weeks after releasing the VR7050 chip. Spectra7 believes that this new chip will "enable and accelerate the broader commercial availability of the market's first dual screen VR Head Mounted Displays ("HMDs") without the burden of multiple, thick and incremental passive cables." I believe that Spectra7 remains the best target for VR hardware manufacturers to bring in-house as it is the smallest brings significant competitive advantages and is the most pure play of the VR component producers. What truly lies inside the Oculus Rift is investment opportunity. Not everyone has to agree that virtual reality will be the next big tech movement to hit the market. All that matters is that at least one company with a pile of cash and a large consumer reach in Facebook has a strategic vision. While that vision is being laid out, there will be a lot of investment dollars flowing into the technology and much of the investment media will jump on the bandwagon in search of the next big thing. Now is a great time to speculate as the Rift and other hardware devices are expected to hit consumer markets next year. If Facebook succeeds in its vision for virtual reality it will result in its dominant position for the burgeoning technology and smaller players who contribute and carve their niche either on the hardware or software side will also greatly benefit.