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Joseph Dedvukaj
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I am an independent investor helping retail investors beat Wall Street to undiscovered high technology and biotechnology growth stocks. Education: University of Michigan (1987) - Bachelors Degree in Business, Professional Accounting, Finance and Managerial Economics Michigan State University... More
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  • Is Apple, Google, And Samsung Getting Ready For Sensor Hubs In Their Ecosystems To Fuel Their Products And Stock Price?

    I think a larger screen in the next generation iPhone is a foregone conclusion. I would like to first say that to Apple's (NASDAQ:AAPL) credit, its products have stayed true to the four consumer favorites, they are easy to use because users don't have to read any instructions; and they always can count on something do with the product; they are mechanically strong; they are beautiful; and they are very dependable. However, I noticed there is a lot of discussion by engineers and investor analysts who are clearly overlooking the fueling possibilities that Apple's Ecosystem provides. This is the thing that a lot of pundits writing about Apple's doom and gloom are missing. Once you are are user of Apple's ecosystem, it's hard to leave.

    (click to enlarge): Source Apples Ecosystem

    Apple's iTunes store is an important part of the Ecosystem design in the years to come. In February, 2013, Apple reported 25B downloads from more than 315 million customers using Apple devices. The software to hardware interface is easy to use and reliable. The ecosystem is more important than the hardware, as Apple learned in the 1980's when competitors ate its lunch by being able to clone hardware. Google (NASDAQ:GOOG) is learning that it's not easy to develop an ecosystem or applications that can compete with Apple. Apple's CEO Tim Cook needs to stick to Steve Jobs inspiring and oft quoted "simplicity" mantra:

    "That's been one of my mantras - focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains."

    Needless to say, Apple must keep the ecosystem Steve Jobs built simple. Investors learned when Apple introduced the iPhone 5S that Apple was getting hardware ready for some greater ecosystem advancements. How did we learn this from 5S? AAPL's 5S has a 64-bit application processor, which I believe will be used this year to better implement fingerprint security encryption technology, to make purchases from AAPL and other retailers very secure and trustworthy. The fingerprint technology is actually made possible by a tiny M7 co-processor chip from NXP Semiconductor (NASDAQ:NXPI):

    (click to enlarge) Source:

    My focus is on the introduction of AAPL's tiny M7 co-processor, which is really a sensor hub, and this is where the iPhone and Apple's products will get really interesting in the future. However, the M7 sensor hub will meet some stiff competition from Google, Samsung (OTC:SSNLF), Nokia (NYSE:NOK), Hewlett-Packard (NYSE:HPQ), HTC (OTC:OTC:HTCKF), Kyocera (NYSE:KYO), Huawei, ZTE (OTCPK:OTCPK:ZTCOY) and Sony (NYSE:SNE) who are expected to adopt a new first-ever patent pending ultra low power in-system reprogrammable sensor hub chip manufactured by QUICKLOGIC (NASDAQ:QUIK) that I wrote about in a previous article. Sensor hubs are tiny and must consume less than 1% of battery power to be useful in small always-on devices. The M7 opens the door for a huge market in "wearable" devices and we will see mobile OEMs leverage their respective ecosystems using sensor hub technologies. AAPL's M7 positions the hardware in the middle of the sensor application and sensor fusion paradigm shift we are entering this year. Google's Android smartphones should also be able to leverage the fingerprint technology using the QUIK reprogrammable sensor hub that cleverly uses Complex Instruction Set Computing (OTC:CISC) Arithmetic Logic Unit technology. The coming wave of mobile smartphone, tablet and wearable devices will be able to use written applications to control the tiny sensor hub that continuously communicates with smartphones and other devices to perform functions that previously could only be imagined. OEM's want the flexibility to reprogram and open source software development for these sensor hubs because they continue to develop and improve powerful written functions for their ecosystems, as a means of making their products more desirable and productive for consumers.

    In the beginning, investors expect that the sensor hub, using finger print technology, will allow AAPL to establish a payment processing business and take away some business from PayPal. I believe we will see AAPL's simple ecosystem penetrate further into the television strategy started with Apple TV's hockey puck that some consumers use, in content delivery, which can make other industries vulnerable to AAPL's and other OEM mobile manufactures ecosystem reach. Shortly, I expect that these new sensor technologies will give more competition to companies traditionally in direct contact with consumers and their wallets, like Amazon (NASDAQ:AMZN), Sony, Microsoft (NASDAQ:MSFT), MasterCard (NYSE:MA), and Netflix (NASDAQ:NFLX). Heck, I believe they might even be able to put a tiny electronic patch on your skin to monitor your vitals, and encroach on your doctors turf, by helping him better understand, monitor and treat your medical condition. The emerging Internet of Things (NYSEMKT:IOT) is based on the simplicity of the sensor technology being integrated into the ecosystem of mobile devices and other consumer electronic networks. The three Titans of mobile computing will be the first to market. AAPL, Google, and Samsung will be incorporating sensor hubs (co-processors) to manage the ecosystem they are now developing. Sensors make it simple, efficient and possible for smart communication devices to continue to be in contact with the ecosystem, even when the main applications processor is sleeping. We should see new products, applications and communications devices being developed in the very near future. Apple will lead the way, as the first mover with the M7 sensor hub and the 64-bit processor.

    Bottom Line Analysis

    At the end of 2013, AAPL closed the year with a staggering $170 billion in cash and long-term investments. AAPL's market cap is currently approximately $475 billion. APPL's ecosystem and mobile designs will continue to evolve with the M7 sensor hub designed to take AAPL's ecosystem to the next level with wearable devices and new functions that previously were not thought possible. APPL should be able to return to growth as the ecosystem built by Steve Jobs amazes consumers with advancements in sensor hub technologies and applications. I believe there are still some compelling reasons to be invested in AAPL's stock.

    Disclosure: I am long AAPL, QUIK, GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Mar 24 5:48 PM | Link | Comment!
  • QuickLogic Is Poised For More Gains In 2014

    QuickLogic (NASDAQ:QUIK) had many accomplishments in 2013 both financially and technologically. QUIK exceeded 200% revenue growth in 2013. QUIK has zero debt on its balance sheet. Management is working towards 50% product margin goal. QUIK raised capital in November, 2013, and is fully capitalized to introduce new revolutionary connectivity and always-on sensor hub products. I find start up technology stocks a tough business to follow. QUIK's nondisclosure agreements keep the details of new contract wins a secret for competitive reasons. As an investor you should know getting useful investing information from company's like QUIK or their customers can be tough. In light of this difficulty, savvy investors know they need to become a detective of sorts to find meaningful investment information. I did some detective work.

    What is the reputation of its CEO Andy Pease?

    An investor researches the CEO by speaking to people who know him well. A noted technology expert Mr. Paul McWilliams of NEXTINNING Technology report states:

    "I researched him at depth before accepting a position as an executive advisor at QUIK. Literally 100% of the people I talked to about Andy said the same thing-Andy will win. Don't look for fluff announcements-look for real leading products released with S1 and PP3."

    I have personally spoken to CEO Andy Pease on numerous occasion and I came to the conclusion he is a man of integrity. Good investors also check-out what other analysts think and recently, Mr. Thomas E. Garrity, at Cabot Small-Cap Confidential, issued his report entitled "Undiscovered Stocks That Can Make You Rich" started Quik with a "strong buy" rating ahead of the expected revenue ramp up. I think the analysts and Wall Street agree QUIK is a "strong buy" in this case. I believe I discovered the reason why.

    February 5, 2014 Conference Call Highlight:

    On the conference call CEO Andy Pease revealed new "design engagements":

    "We have a number of active design engagements with leading mobile device manufacturers for ArcticLink 3 S1 and PolarPro 3..."

    Of course, Mr. Pease is referring to the new industry leading ultra low power S1 sensor hub technology that is now production ready. Quik's sensor hub is designed for always-on-context-aware applications for smartphones and tablets.

    Following the call, I exchanged emails with CEO Andy Pease to gain a better understanding. I felt QUIK's VX follow-on production design win for the new Samsung Galaxy Tab 3 7.0 Lite, expected to ship this quarter, validated QUIK's technology acceptance. QUIK has managed to develop strong strategic partnerships with processor suppliers Qualcomm (NASDAQ:QCOM), Marvell Technology Group (NASDAQ:MRVL), and secured a qualified vendor list status with Mediatek (2454.TW) and Broadcom (NASDAQ:BRCM). These existing partners see the unique advantages they will gain over competitors by being the first to market, using QUIK's ultra-low power consumption products. I see this translating into new innovations and big demand for new wearable products they are working on.

    Why should investors and analysts get really excited?

    CEO Andy Pease responded to my inquiry in this email:

    "...4 tier one OEM wins: 2 at Samsung and 2 at a tier one PC manufacturer that we cannot yet name. All I can tell you is that we are working with many of the people you just mentioned. If they are doing tablet that requires a bridge, we go after that socket with our bridge solution that is enhanced with VEE/DPO.

    What I believe should excite all our investors is that the target for both of our new silicon platforms (PolarPro 3 and ArcticLink 3 S1) are Smartphones. Finally, having solutions in both smart connectivity as well as sensor hub for smartphones is HUGE."

    QUIK's management has outlined in the company blog the following events:

    (1) Mobile World Congress is right around the corner…let us know if you're going to be there!

    (2) With the incredible amount of sensor applications being discussed (for instance, these, this one, and these), it's obvious that the algorithm requirements are going to continue to grow and diversify. Given that, the idea of an ASIC-based sensor hub seems less and less viable. As more and more sensors come on line, and the applications for those grow, dedicated ASIC's grow long in the tooth quickly. Sensor hub's need to be adaptive, and the in-system reprogrammable nature of the ArcticLink 3 S1 sure seems like better option.

    (3) As Andy Pease mentioned in the last earnings call, we're really happy to continue our presence in the Samsung Galaxy tablet line, most recently in the Tab 7.0 lite. It was great to finish a year of great growth with another high-profile design, and we look forward to continuing the momentum in 2014.

    (4) Thanks to all of you who visited the blog site immediately after the earnings call. The beauty of a communications method like this blog is that we are able to provide context and answers to questions to our readers (and investors, in this case) in a quick turn, direct manner. We're glad we were able to clear up any confusion, and thanks to those who commented publicly and privately about their satisfaction with the content.

    (5) Look for information from us in the coming weeks regarding the ArcticLink 3 S1′s unique CISC-ALU approach, and how it compares and contrasts to traditional RISC-based approaches.

    I believe in the next few months or quarters the company should be able to super charge growth. During my investigation, I combed through the press releases, conference calls, spoke to other analysts, checked the stock's chart, and discussed the company's future with the CEO. Honestly, I could not find anything inconsistent or negative to write about. In my opinion, whether you take a full or partial stock position, you may want to hold onto every single share, you can get your hot little hands on at these wholesale prices.

    Conclusion:

    In my opinion, QUIK moved into very interesting times with product shipments growing and design engagements building future revenues in the hundreds of percent. Hypothetically, if QUIK's standard CSSP or S1 Sensor hub products can fetch a reasonable $2 per unit in the market place, and QUIK manages to get an order of 10 million units, the simple math dictates additional $20 million in revenue coming. This can be big deal for a very small company with only 50 Million shares for the feeding frenzy. The balance sheet is solid with more than $36 million in cash and zero debt. In the last year QUIK has more than tripled year over year growth. In my opinion, QuickLogic is an ideal "strong buy" for the long-term investor, especially since past experience tells us its virtually impossible to time a stock's run up.

    Disclosure: I am long QUIK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Feb 19 8:48 AM | Link | 1 Comment
  • FDA Accepted And Posted Arena Citizen Petition
    A note to investors, the FDA has accepted and posted the Citizen Petition filed by a group of healthcare professionals, investors, lawyers and others. The petition took a while to post because there is a quality control process within the FDA to make sure the petition conforms to the law. You are free to post a supporting comment at the following website location http://www.regulations.gov

    You may then insert the FDA Docketing Number "FDA-2012-P-0298-0001/CP" to find the petition. There is a comment icon you can click to state your comment. The rest is self-explanatory:

    http://www.regulations.gov/#!submitComment;D=FDA-2012-P-0298-0001

    Apr 03 9:54 AM | Link | Comment!
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