Immersion Corporation Announces New Key Licensees

| About: Immersion Corporation (IMMR)

On May 17, Immersion Corporation (NASDAQ:IMMR) announced its participation at Display Week in Los Angeles and also took the opportunity to reveal several new licensees in different verticals.

These new partnerships confirm the increased popularity achieved by haptic solutions in the gaming, medical and automotive segments and validate Immersion's leadership in this specific field.

Let's have a quick look at some of the highlights for each new licensee.

The Gioteck name may not be very well know (yet) in the USA, but it is the leading third-party peripherals brand in the U.K., in terms of unit sales, according to GfK Chart-Track. Its manufacturer, GoodBetterBest, is particularly successful with its range of Bluetooth devices, that outsold Sony's (NYSE:SNE) official PS3 headset at the beginning of 2011.

Gioteck started selling its range of headsets, controllers, cables and other products for the PlayStation3 and Xbox 360 in stores across the U.S. at the beginning of April 2011.

In 2010 the company achieved a 40% growth internationally and a 15% sales increase in its own domestic market. With new market and product expansions foresees for 2011, Gioteck seems an interesting addition to Immersion's long list of gaming partners [Sony, Logitech (NASDAQ:LOGI), Mad Catz, Inc. (NYSEMKT:MCZ), Microsoft Corporation (NASDAQ:MSFT), Griffin, Razer, etc.).

National Research Council of Canada (NRC) is the Government of Canada's premier organization for research and development, active since 1916.

Here is a brief description of its NeuroTouch system, a virtual-reality brain surgery simulator, that was also displayed at the USA Science & Engineering Festival, held in Washington, D.C. in October 2010:

The NeuroTouch simulator takes magnetic resonance imaging (MRI) data and turns it into a virtual model of a patient's brain. The simulator allows a surgeon to visualize a particular patient's brain as it would be seen through an opening in the skull. Attached to the simulator is an instrument that mimics a key tool the surgeon will be using during the actual operation. The tool sends signals to the hand that replicate the sensations the surgeon would feel in the operating room.

NRC joins CAE (NYSE:CAE), MAKO Surgical (NASDAQ:MAKO), SOFAR S.P.A., Laerdal Medical and Simbionix as an Immersion's licensee in the medical vertical.

The most interesting win, however, comes from the automotive industry, in our opinion.

Valeo (OTCPK:VLEEF), one of the world's top automotive suppliers, with 109 production sites in 27 countries, was officially announced as a licensee for the company's haptic technology. Back in March 2010, Valeo informed that it was becoming a core member of the GENIVI Alliance, an association of automakers, suppliers and other industrial companies committed to the development and broad adoption of an open source In-Vehicle Infotainment (IVI) reference platform for the automotive industry.

On such occasion, Valeo underlined that the company had "been anticipating this architectural evolution for several years in the development of its product offer which includes integrated control panel modules combining climate control and various other functions, tactile surfaces and large touch screens with haptics feedback."

As we recently pointed out in one of our articles, it looks like the automotive segment is a sleeping vertical that could soon start seriously contributing to Immersion's results (2012 and forward). Some of the company's partners are already active in the high end of the market, like ALPS, which is shipping a haptic rotary control that has been included in the Mercedes-Benz S-Class sedan, and a two-dimensional haptic control module, called the Remote Touch controller, used in the Lexus RX 350 and 450h, or Continental AG, that licensed Immersion's haptics technology for use in the high-end Volkswagen (OTCPK:VLKAF) Phaeton sedan and Bentley cars. More important, for the larger potential impact on the market, both Visteon (NYSE:VC), SMK Corporation and Daesung Electric Co. Ltd., a leading Korean automotive original design manufacturer and major supplier to Hyundai (OTC:HYMLF) and Kia, are all working to bring haptics to some of the leading car producers in the close future.

Disclosure: I am long IMMR.