When a butterfly flutters its wings, it might unleash a hurricane three continents away, years later. But when Apple
That's why OmniVision Technologies
So when Chipworks' infrared microscope clearly unveiled a Sony
Image taken from Chipworks, clearly showing Sony's fingerprints on the camera chip.
Chipworks bends over backwards to point out that this is just one unit and that Apple probably dual-source these chips from both Sony and OmniVision. But the fact remains that OmniVision's former stranglehold on this product line has been broken. Say hello to Sony, the second company to figure out how to make backside illumination camera chips with performance and costs acceptable to Apple.
This shoots large holes in my own investment thesis for OmniVision, which assumes that the company stands alone in the BSI market. But the salad days are over. Time to share the playground with the other kids. My real-money synthetic long on OmniVision is suffering right now.
In other iPhone 4S news, IHS iSuppli confirmed (and Chipworks also believes) that Cirrus Logic
Unless further reports show that Sony kicked OmniVision out of the iPhone entirely, which I think is about as likely as the Dolphins winning the Stanley Cup next year, I still think that the stock is ridiculously cheap at just 6 times trailing earnings before backing out nearly $8 a share of net cash. An earnings announcement in late November should sort that mispricing out before my options expire. The keyword here is should, of course. Stay tuned.
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Fool contributor Anders Bylund has created a synthetic long position in OmniVision, but he holds no other position in any of the companies discussed here. With his luck, the hockey playoffs will be conducted with pigskins on Astroturf in 2012. The Motley Fool owns shares of TriQuint Semiconductor, Cirrus Logic, and Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.