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The Next Mobile Killer App

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The mobile market is the greatest growth story ever told. Now Texas Instruments (NYSE: TXN  ) wants to write the next chapter.

The story so far
Over the last decade or so, cell phones grew from a yuppie luxury to an everyday necessity. Mobile mavens such as Nokia (NYSE: NOK  ) shipped 1.2 billion handsets last year. Compare that to 1997, when a puny global market supported just 107 million brick-like dinosaur phones.

As the market grew, the devices improved -- and formerly super-fancy features morphed into must-haves. The 4 million cameraphones in 2001 ballooned into more than 700 million in 2007, and it's getting harder and harder to find a simple non-camera phone these days. Smartphones started out as Palm (Nasdaq: PALM  ) PDAs (remember those?) and early Research In Motion (Nasdaq: RIMM  ) BlackBerrys, but after the runaway success of Apple's (Nasdaq: AAPL  ) iPhone, every handset designer wants to build one, and untold millions of consumers want 'em.

Chapter and verse
And that's where TI comes in. The markets for standard handsets, camera chips, and high-end smartphones have pretty much been staked out already. The next hypergrowth opportunity needs new features -- and TI thinks that microprojectors are it.

"We see no reason for this not to follow a path similar to the camera phone," says company spokesman Craig Moizio. "It's been requested of us by mobile phone companies and consumer electronics companies all over the world." TI just released a tiny, low-power version of the DLP technology you might have inside your big-screen projection HDTV. To complement that product, TI also upgraded its OMAP mobile hardware platform to improve its image-processing horsepower, and added support for its Pico projector. The end result of these innovations is the ability to embed cell phones with a high-quality projectable video display.

In this space, it's a two-horse race between TI and upstart projectionist Microvision (Nasdaq: MVIS  ) . TI is first to market with a Samsung phone designed for Korean and European consumers, which should be released this month. The company also expects to release a phone with its next-generation Pico technology by 2010. Microvision is hoping for its first commercial customers no earlier than the second half of next year. Though Microvision claims to have the smaller and more efficient projector chip, TI will have the first-mover advantage.

The Foolish upshot
Sharing videos and images on the go is tricky today, requiring us to crowd friends or business partners around a four-inch screen at best. By 2015, projecting the good stuff on table cloths or whiteboards will be a snap. I'm thinking two-way video conferences in any conference room or coffee shop, one-upping Cisco's (Nasdaq: CSCO  ) Telepresence vision.

Texas Instruments should make a mint powering that next killer feature. If so, investor returns will soon follow.

Further Foolishness:

Nokia is a Motley Fool Inside Value recommendation, and Apple is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (4) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 18, 2009, at 3:43 PM, mirro7 wrote:

    "Building upon the success of the first DLP Pico™ chipset, which has HVGA resolution and enables leading brands to deliver cutting-edge products across the globe, this new chipset increases performance benchmarks," said Frank J. Moizio, Manager, DLP Emerging Markets business. "The new chipset provides WVGA resolution, higher brightness and power efficiency; all while enabling thinner, smaller optical engine modules to meet the demands of contemporary handheld devices."

    What’s more important is to note that…

    “ … Pico projection products were featured at the International Consumer Electronics Show in January and regarded by industry analysts as one of the hottest new categories in consumer electronics. According to U.S. based research group Pacific Media Associates (PMA), the market for such devices is expected to surpass millions of units in the next few years.”

    With the announcement of new chipset today, at the Barcelona Mobil World Congress 2009, TI ratchets the competitive bar a notch higher. Competitive market for Pico Projectors is heating-up, no doubt, but it also confirms the huge market for PicoP in the next coming years. Things are going to get mighty interesting as the year progresses. I’m encouraged by this news in a few ways:

    – It continues to strongly validate the potential for this nascent market;

    – There is very strong belief that it's the start of a new world that transforms business and social interactions;

    – It’s a huge market!!!

    The overall market for the standalone and embedded Pico Projectors is over a billion units per year and there will be many players in the market place. It is expected that there will be many different technologies offered by many different players. However, the most differentiating technological features would remain to be:

    – Image size and resolution;

    – Brightness and color sharpness;

    – Contrast ratio;

    – Battery power;

    – Always in focus feature;

    – Price/performance ratio.

    Microvision’s PicoP Display Engine is laser based and offers all of the above differentiating features today with a technological path, with no technology glass-ceiling, to higher resolution… brighter picture… sharper colors… higher contrast ratio… lower power consumption… and of course the always-in-focus feature. As the green laser technology matures, we expect superior price/performance and manufacturing scalability from Microvision to meet the growing adoption rates of the billion units a year worldwide market.

    I don’t expect Microvision PicoP Projectors to be the only product in the market place or dominate the market. However, based on superior laser based technology pathway, I do expect Microvision’s PicoP Display Engine to be among the top three leaders of the pack [besides 3M and TI]. Even a small percentage of the huge market adoption rates from a billion unit worldwide market still represent a significant revenue [and earnings] stream. And that is good enough to be hugely successful as a small company the size of Microvision.


  • Report this Comment On February 19, 2009, at 1:48 PM, dbbfool63 wrote:

    Microvision expects to release their first PicoP enabled consumer product later in 2009, also the pico projector is just the beginning for the PicoP display engine which could be deployed in a diverse range of applications which is why they are providing PEKs to help prospective customers cultivate new ideas and products.

    Microvision will also introduce the PicoP ® Evaluation Kit (PEK) to enable a wide variety of consumer, industrial, automotive, medical and military applications.

    Microvision was just Awarded a $750,000 Contract to Develop a High-Definition Prototype Display Engine for the U.S. Army. Can you imagine the revenue from the number of units they might need.

    It's like getting free R&D money to create an even more intense design along with new advancements, it should definitely help for future developments and products.

    It has to make you wonder when you consider the U.S. Army chose Microvision over Texas Instruments for this contract, I believe it could be that Microvision is more focused in this area right now and could probably do it quicker.

    I do agree there will be other similar products eventually in the market place besides the two mentioned, but they will have a lot of catching up to do. There is definitely plenty of room for more companies since it is expected to be a huge market and it's only just beginning.

  • Report this Comment On February 20, 2009, at 2:37 AM, ex9 wrote:

    Quoting The Foolish upshot

    "... I'm thinking two-way video conferences in any conference room or coffee shop, one-upping Cisco's (Nasdaq: CSCO) Telepresence vision.

    Texas Instruments should make a mint powering that next killer feature. If so, investor returns will soon follow."

    I'm thinking Cisco would want to acquire a technology based pico company like Microvision (Nasdaq: MVIS) as it may allow them to offset the threat to that "Telepresence vision". Cisco is sitting on a mountain of cash and could easily take out MVIS at $5-10 a share.

  • Report this Comment On March 05, 2009, at 10:43 AM, dbbfool63 wrote:

    I agree ex9, and Cisco would have revenue and contracts already existent from it not to mention the cash Cisco would be able to expand R&D with.

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