Techno-geeks have been pining for and hearing about organic light-emitting display technology -- more commonly referred to as OLED -- for years. For investors and gadget geeks alike, it's frustrating, largely because it takes time for a new technology to displace incumbent technologies. And it takes even more time when all of the companies that sell the existing technologies have invested in plants designed to manufacture what's selling today.
A handful of MP3 players and other devices that use OLED screens are out today and in consumer hands. In the meantime, what we're really waiting for is the holy grail -- a larger, light, flexible, and portable display from the likes of Sony
All of this means that looking at a quarterly earnings report for Universal Display
On the revenue side of the coin, Universal Display is still dependent on research contracts, while the company tries to ramp up licensees of its OLED patent portfolio, which -- say it with me now -- takes time.
The big news for the company in the most recent quarter was Samsung signing on as a licensee. Samsung had been in a developmental agreement with the company since 2001, but has recently moved up to being a full commercial licensee.
However, as Samsung is a force in the display technology business, I think it's realistic to say that if Samsung has some form of success with OLED in the near future, then competitors will come calling on Universal Display and competitor Cambridge Display Technology
On the cash burn side, Universal Display has plenty of time to grow the business. The company is still sitting on almost $42 million of cash and equivalents. At the company's current burn rate of about $1.2 million per quarter, which should continue to decrease over time, it has almost 10 years of cash on hand. With a business model that needs plenty of time to develop fully, it appears Universal Display has the cash on hand to do it.
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Nathan Parmelee has no financial interest in any of the companies mentioned.