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InvenSense (NYSE:INVN) has been a pretty big disappointment among technology stocks. The company's microelectromechanical systems (MEMS) and sensors are some of the best in the business, but the company's failed to substantially grow revenue, and its stock price has received a 60% haircut over the past 12 months.

For investors wondering what InvenSense can do to turn things around, here are three main areas the company needs to zero in on. 

1. Move further away from smartphone dependence

InvenSense is heavily dependent on MEMS sales to Samsung and Apple (NASDAQ:AAPL), which made up a combined 53% of total revenue in the fiscal fourth quarter of 2016.

That may have been all well and good when the smartphone market was expanding quickly and consumers were clamoring for iPhones, but things have changed. Apple saw its first-ever decline in smartphone sales in its most recent quarter, and smartphone sales overall are slowing. 

That slowdown contributed to InvenSense's 20% year-over-year revenue drop in Q4 -- and it's why the company needs to move away from its smartphone reliance, particularly from Apple. The iPhone maker accounted for 39% of InvenSense's total revenue in Q4, and it's dangerous for the company to continue relying on Apple so heavily. 

This leads us to InvenSense's next area to fix: revenue from its "other" category.

2. Expand its "other" revenue segment

The company deserves a credit in this regard because it has grown revenue from its "other" segment from 21% of total revenue in Q3 to 32% in Q4. But there's still plenty of room for more growth. 

Revenue from this segment comes from virtual and augmented reality, wearables, smart home, drones, and other Internet of Things tech. And CEO Behrooz Abdi said recently that "that the broad applicability of our portfolio positions us for continued diversification and growth in these exciting markets."

While revenue in this segment has doubled in fiscal 2016, it's still not making up for the drop in revenue elsewhere -- which is down 20% year over year to $79.5 million. Perhaps InvenSense will eventually be able to fill the gap with its other revenue segment, but the company is still a long way off from that. 

3. Improve margins

InvenSense saw its margin improve from 44% to 45% in the most recent quarter, but it wasn't exactly a big step forward. The company's fiscal 2015 adjusted gross margin was 44.4%, and it dipped ever so slightly to 44.2% in fiscal 2016.

The problem for InvenSense here is that competitors like STMicroelectronics have been muscling into InvenSense's business. The company can't increase margins when it's being undercut in pricing by STM, as it was when Samsung chose STM's chip for Galaxy S7 and S7 Edge over InvenSense's 6-axis microcontroller. And as fellow Fool Ashraf Eassa pointed out a few months back, if Samsung went with cheaper components for its flagship device instead of the better-performing InvenSense version, then Apple may see fit to do the same.

InvenSense can't change fast enough

While some investors may be looking to hang on to InvenSense in hopes of a turnaround, there's not much indicating that one is on the horizon. Management is forecasting revenue between $58 million and $62 million for the coming quarter, a far cry from analyst estimates of $84.8 million and a non-GAAP earnings-per-share (EPS) loss between $0.05 and $0.07. 

InvenSense needs to drastically improve its business before this stock begins ticking back upwards, but there's not much indicating that will happen any time soon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.