A few random notes on UniPixel (NASDAQ:UNXL):
1) For those of you who don't know, Synaptics (NASDAQ:SYNA) is a leading touch controller and touch module company. They've produced roughly a half-billion in revenues over the last twelve months, and have a market capitalization of $1.2bn. As I noted in my original article, touch controller suppliers are the linchpin in the touch market. It's crucial to pay attention to what they're saying and what they're doing. With that said, here are some noteworthy comments from Synaptics' CEO, Rick Bergman, lifted from the company's conference call last week on 1/24:
I think it's important to point out that the market expectations for touchscreen enabled notebooks have dramatically shifted upwards. IDT's projections for notebooks with touch is now 25% of the unit shipments by 2014.
The fact is that Windows 8 demand touch, and more specifically touchscreens within an exploding array of new form factors including ultrabooks, hybrids convertibles, sliders and detachables.
Synaptics has an excellent product line, our design pipeline is building and we have established a firm pathway towards providing the right high performance, cost optimized solutions to drive the adoption of large touchscreens and notebooks in even larger surface areas. In looking more specifically at the tablet, or large touchscreen market, tablets grew past 100 million units last year, and combined with large touchscreens and notebooks is expected to see 200 million units in 2013, and close to 300 million units the following year.
….In addition, we expect Windows 8 notebook touchscreens powered by Synaptics to begin shipping in key OEM products within the next few months. To wrap up my remarks, two underlying factors remain fundamental to our industry, the first is that increasing end-user experiences are raising the bar in human interface solutions, and the second is the demand for lower power thinness and quality of a touch experience is unrelenting. (bold and italic highlights are mine)
I will leave it up to you to connect these dots to UniPixel in the way you see fit.
2) Some UNXL investors are equating early capacity figures, supplied by management, with revenue production. We should all remember that there's a long period of ramp-up and qualification before UNXL can start real production runs. The company has mentioned pre-pilot runs, pilot runs, pre-production runs, and finally production runs. Even though they'll be building up capacity in the second quarter, they aren't going to be selling much UniBoss until the third quarter - when production is fully qualified. I'm assuming close to zero UniBoss revenue in 2Q.
3) Mike Malouf at Craig Hallum had an interesting note out following CES. He walked through the UniBoss manufacturing steps individually and answered a number of FAQs. I thought the most important comments, however, related to what he was seeing at CES more generally. He talked about the fact that Intel (NASDAQ:INTC) is actively pushing customers and OEMs to embrace touch (Microsoft (NASDAQ:MSFT) too, but that's well known). Intel has gone so far as to require touch compatibility for any manufacturer integrating its new Haswell microprocessor.
I don't follow the processor space closely, but I believe that Intel has struggled to make inroads in the mobile processor market. As a result, they are probably doing everything in their power to bring some growth to PCs and notebook/smartbooks. One could argue that part of the reason desktops and notebooks have ceded share to tablets is because they have lacked inexpensive touch functionality. Thus, finding an inexpensive touch solution for large format displays would seem to be fairly important to someone like Intel (and Microsoft).
These giant companies likely see Rick Bergman's "exploding array of new form factors" as a great opportunity to sell their wares. Bringing UniBoss under the "Wintel" umbrella in some sort of partnership might win them a greater slice of this emerging opportunity. Prodding their OEM and supply chain partners into a UniBoss solution could make a difference in an intensely competitive market.
4) The short piece put out on Friday hardly merits discussion. Suffice it to say that anyone who is convinced by the "analysis" and "due-diligence" that went into that paper deserves to be short UNXL. That's true for the Ben Wiley and Xuhua pieces as well. We should all hope that these shorts are using rallies to increase the size of their positions.
Disclosure: I am long UNXL.