Apple's (Nasdaq: AAPL) iPad is a hit. The iPhone has led a mobile phone revolution.

The products have done so well that there's already a slew of me-too tablet offerings from Hewlett-Packard (NYSE: HPQ), Dell (Nasdaq: DELL), and Research in Motion (Nasdaq: RIMM) in the pipeline. Not only that, but they've challenged competitors to create compelling operating systems that function stunningly well compared to regular, old-fashioned computers. Because of this, a lot of folks think now's a great time to own shares of miniature display specialist MicroVision (Nasdaq: MVIS). After all, small computers, smartphones, more mobile computing -- it all seems to play into the hands of a company that maximizes viewing pleasure on devices with minimal screen-size. Last week, however, MicroVision saw a massive sell-off as other investors began to suspect all was not well with the company.

Which version of this story is the right one?

Bull thesis
There's an inherent conflict in the movement to smaller computers and the human eyes that strive to read their screens. You can make your PCs as "nano" as you like, but the smaller the device, the smaller the surface area of the LCD display -- and the harder it is to read. Enter MicroVision with a solution, or rather, many solutions. Among its several products, the company produces tiny, wearable optics that allow you to "see" displays much larger than if you were viewing them directly on a device's screen. In addition, the company is a leader in pico projectors, a category that Texas Instruments (NYSE: TXN) highlighted as a key growth area in recent product announcements.

It's a great idea, except for one thing ...

Bear thesis
The customers aren't buying it. Last week, MicroVision preannounced Q4 earnings showing revenues tumbling 30% -- a big disconnect from the full-year expectation of 24% growth. The company also expects to lose perhaps $0.17 per share, while on an annual basis, MicroVision staggers along at a nearly flat, $0.52-per-share full-year loss.

Now, some folks might applaud management's getting "ahead of the news," putting these numbers out there a full month before official earnings are due. Unfortunately, rather than 'fess up front and center, MicroVision buried the bad news deep inside its press release, first devoting several paragraphs to boasting of its partnership with Pioneer in the automotive heads-up display market, and discussing this year's "strategy."

Foolish takeaway
When you get right down to it, even MicroVision's promises fail to inspire. MicroVision promised to cut "2011 cash requirements by 40%." But seeing as how the company would have burned over $35 million in cash last year were it not for additional equity financing, even that reduction of cash requirements leaves the company light on cash for the year ahead.

That means more stock dilution for its long-suffering shareholders, and a smaller share of future profits. Assuming MicroVision ever produces any.

Think MicroVision can turn it around? Want to be first in line to know when it does? Add the stock to your Fool Watchlist, and make sure of it.