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  • Pixelworks : Connecting The Dots... 1 comment
    May 28, 2014 11:37 AM | about stocks: PXLW, AAPL

    Pixelworks & Apple

    Pixelworks Inc. owns a broad portfolio of 125 patents and has no long term debt.
    A promising company poised to surge, especially when it announced its relationship with Apple in their 10K SEC filing. Where it is obliged to report customers that represent more than 10% revenue.
    On top of that, they appointed David Tupman to the Board of Directors. A mobile hardware executive with over 25 years of experience, former vice president of hardware engineering at Apple (left in 2012) where he was behind the development and success of every iPod and iPhone.
    Can't be a better timing since Pixelworks is penetrating the market for mobile devices, or has it already nested in this market?

    It's unclear whether Pixelworks has a relationship with Apple, both companies refuse to respond to such statements…why?
    Apple is strict when it comes to secrecy on future products.
    "Apple is getting ripped off left, right, and sideways. Talking about its future product plans would give competitors a road map of Apple's plans. We think the element of surprise is important."
    Tim Cook's response when the news got leaked that Apple is making sapphire screens for the new iPhones.

    When I think back to the lock-up story surrounding Apple's quiet deal for AuthenTec, I wouldn't be surprised if an acquisition is (or has been) in talks. The technology and amount of patents Pixelworks possess could only benefit Apple. Acquiring Pixelworks would solely benefit Apple and no other rival company that would like a piece of the cake.
    Who knows, we might see a 8K form filing for merger any time soon. Or perhaps I'm just too optimistic…(?)

    Apple television

    In the 10Q filing Pixelworks speaks of a "Co-development Agreement" made during 2012.
    In the agreement a portion of the research and development expenses will be paid by the customer resulting that the IC product will be sold exclusively to the customer.
    All milestone payments were done as of December 31, 2013 and Pixelworks received mass production qualification from the customer for their advanced SOC for large screen applications, to start this quarter and ramp in the second half of this year.

    How is this connected to Apple as customer? In 2012 rumors of an Apple branded television emerged. Since then, analysts kept predicting the release date of this revolutionary product but failed to succeed.
    In a February 2012 keynote, Apple CEO Tim Cook hinted that the current Apple TV box was a hobby product and that there was more potential in it. Issuing this, I believe Cook signed an agreement back then with Pixelworks to start co-developing a SOC for an Apple TV with the newest ultra HD (4K) resolution.

    Apple iPhone 6

    If the technology isn't set for the Apple TV, it can still be for the iPhone 6. Apple's rumored 5.5-inch screen model is set to start production in Q2, if not Q3. They are set to produce tens of millions units this year. The same amount Pixelworks' CEO Bruce Walicek is aiming to address to the market, said in the presentation at the B. Riley & Co. Investor Conference.
    Bruce mentioned it's made for devices with a 5.5-inch screen and up. So it would actually suit the iPhone perfectly.
    Or who knows, perhaps the iPad?

    Reasons enough why both companies could possibly be linked to each other, and the SEC filings didn't lie. I guess we'll just have to wait patiently, it's just a matter of weeks/months till we know for sure!

    Disclosure: I am long PXLW.

    Stocks: PXLW, AAPL
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  • JPnhy
    , contributor
    Comments (1409) | Send Message
    This relationship is still unclear. PXLW offering new product, clear.
    3 Jun 2014, 06:36 PM Reply Like
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