Digital cameras are everywhere -- in cell phones, laptops, and fancy toys. The prize in your box of cereal might soon be a digital camera. Rumor has it that you can even buy stand-alone cameras. Imagine that.

OmniVision Technologies (Nasdaq: OVTI) makes the image capture chips that make all these gadgets tick. Well, some of them, at least. Texas Instruments (NYSE: TXN) and Micron (NYSE: MU) produce a few image sensors of their own. In the just-reported quarter, OmniVision's management thought they were stealing market share from the other guys, and with new products on the way, that's a trend they'd like to continue.

Net income was $0.40 per diluted share on $225 million in sales. Those numbers skim the low end of management's revenue guidance, but skipped over the top of the official earnings forecast. That came as a welcome surprise to Wall Street, and the stock opened nearly 10% higher this morning.

You pull off that trick by widening your margins, and it started at the top for OmniVision. Gross margins improved to 27.1%, from 25.2% last quarter and 24.9% a year ago, mainly thanks to excellent production yields from manufacturing partner Taiwan Semiconductor (NYSE: TSM).

More importantly, after many delays, the company's much-vaunted TrueFocus technology will soon hit the streets. Cameras built around those chips will be able to auto-focus instantly and with unlimited depth of field, because it's all done digitally rather than by moving lenses around. That's so last century, you know.

If OmniVision executes that launch properly and lands attractive customers, it could be a major consumer hit and growth driver. It's a perfect philosophical fit for the next Apple (Nasdaq: AAPL) iPhone, for example. Missteps over the past couple of years make me somewhat skeptical of that scenario, but if the technology really is ready to go, there's a market for it.

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Apple is a new addition to our Motley Fool Stock Advisor portfolio of market-thumping stocks.

Fool contributor Anders Bylund is a Taiwan Semi shareholder, but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure always keeps the market in crisp, clear focus.