Synaptics puts touch on the back of tablets

Synaptics had a really nifty tablet tech called Sensa, aimed at fixing multi-touch errors, on display at CES. The idea behind it is simple enough, detect and remove erroneous touches from the hand holding the device, and turn them in to useful input.

Like all simple concepts, Sensa is a hard problem to solve technically speaking, but Synaptics did. If you are holding a tablet, you probably have four fingers on the back, and your thumb on the front. If that thumb touches the edge of the screen, then a swipe elsewhere becomes a zoom or a shrink, and things get weird. How do you tell a finger touch on the front from a, err, finger touch on the front? Not easily.

The way Synaptics solved this problem is pretty cool though, they put a full touch panelsensor on the back of the tablet and detected where fingers were on it. If the back sensor sees four fingers, as seen by the blue dots in the picture below, one touch near the margins on the front sensor can be safely mapped out as a the hand holding the device, not a voluntary input. Once you are told how it is done, the solution is obvious enough, but no one had done it before Sensa.

The blue dots are the fingers you can’t see

Once you know the position of the hand, you can do all sorts of tricks with what Synaptics calls ‘grip events’. You can make UI changes like one or two handed input modes, infer some use cases, and most usefully map out potential errors. The best one however is called dynamic margin control. This basically sees where your thumb is on the screen, maps the input out, and moves the margins over so the text is not blocked by it. There are two modes, one moves the whole margin over, the other pictured below just wraps text around your finger automagically. It is really nifty and useful, but not exactly a difficult thing to understand.

Magic is in the details, and the back sensor

One use case for Sensa that we hope Synaptics does explore is nothing more than a normal tea cup. This technology could easily detect the proverbial ‘pinky up’ position that is the bane of correct society and deliver lethal electric re-education ‘hints’ upon detection. Gesture error prevention and margin control are nice, but Sensa has the potential to do no less than help cleanse the gene pool with technological efficiency. Lets hope Synaptics decides to uses their advances for good, not just tablet frivolity.S|A

NJYTOUCH

Uni-Pixel: A True Analysis Of Risk Vs.

I’ve written about Unipixel (UNXL) before here, but wanted to give an update due to new developments, new information, and the several Seeking Alpha articles that followed mine in the past three weeks. But first, a brief summary on the company.

Unipixel is a micro-cap technology company focused on performance engineered films. It has two main products right now: UniBoss and Diamond Guard. Diamond Guard is a cover film that is extremely thin/light, highly scratch resistant, and virtually unbreakable. UniBoss is a highly customizable patterned grid used in touch sensors as an alternative to current ITO models. For more information on these products, see my previous article (linked above) or Green River Asset’s article here. Both will provide excellent background and I highly suggest reading them both before continuing, as I skip over much of the detail included.

I will focus on UniBoss, since it is the more exciting of the two products, although Diamond Guard could also potentially produce significant revenue. As in my previous article, I want to focus on two aspects: The opportunity and the risk.

Opportunity

The touch screen market is huge and growing fast. DisplaySearch estimates that it will grow from $16 billion in 2012 to $32 billion in 2018. Note that this is for the whole touch screen, not just the touch sensor. Based on the following article from DisplayBank, the touch screen panel market size is approximately 65% of this total amount, or about $10B in 2012 and $20B in 2018. However, UniBoss is half the cost of current ITO technology, so really the total market is $5B now and growing to $10B in 2018. This is the expected market that UniBoss is going after.

Keep in mind that touch screens are not a fad. They are here to stay and growing fast. Microsoft is fully devoted with its release of Windows 8. Also, many other companies announced their full support for touch screens at CES: Intel, Lenovo, and of course Dell.

Let’s focus on these “large-screen” devices and look at the market on a per unit basis. Morgan Stanley estimates that in 2013, there will be near 600 million large-screen devices (desktops, notebooks and tablets) shipped. If we assume that just half of the notebooks/desktops are touch enabled (less than the 60%-100% claimed by Lenovo, Dell and others), then we can expect approximately 216 + 371*.5 = 400 million large-screen touch-enabled devices shipped in 2013 and 352 + 370*.5 = 550 million in 2015. At $20 per square foot, this translates to a little under an $8B market in 2012 and $11B in 2015 – a little above the estimates presented earlier.

The differences come from the fact that DisplayBank and DisplaySearch are probably not accounting for the large transition in notebooks/PCs to touch screens as this is “new” information from CES this year. It was previously assumed that touch screens would not become too substantial in these devices as the cost was too high: Adding a touch screen to a laptop currently costs about $200-$400 to the end-user ($40-$90 for the ITO touch screen multiplied a few times for various margins). As an example, Sony just revamped its VIZIO T13 line to include touch screens. The base model increased from $770 to approximately $1,100. UniBoss will only increase the total cost by about $50-$150 to the end-user (an estimate given similar ratios).

I have already discussed why UniBoss is superior to ITO and other ITO replacements in the previous articles at the top, and believe that it is therefore not unreasonable to assume a conservative 5% market share. Using the $8B market in 2012 (based on units), this amounts to $400 million in revenue, and does not include any potential revenue from smartphones or other touch devices.

What does $400M in revenue mean in EPS? Well, Unipixel states that its gross margins will be “well north of 50%.” We could use this number, however what if margins are much higher? Unipixel has also stated that the most expensive part of the conductive film is the film itself, costing $0.10 per square foot. Throw in labor costs and yield and machine depreciation, and it is clear that, at a sale price of $20 per square foot, the revenue will in fact be “well north” of 50% and could easily be in the 80% to 90% range.

Now, all of this is assuming a 5% market share, or $400M in revenue. But how likely is this? Well, at $20/square foot, Unipixel would have to sell 20M units, or about 1.66M units per month for an entire year. According to Unipixel, it expects to be ramped up to over 3M units by the end of 2013, with its first major customer — rumored to be Dell (DELL) — accounting for near 1.3M units per month by the end of 2013, and potentially more in 2014. Unipixel doesn’t even have to sign any more deals this year and it will still produce upward of $260 Million in revenue, or about $6.5 in EPS using 50% margins. Give that a 20x P/E and we’re looking at a $130 share price, just from the current customer, which is already signed. But how committed is this customer? Well, it will be writing four checks to Unipixel throughout 2013 for a total of $15M just to help it build out capacity. That’s right, the customer is putting up millions of its own dollars just to help Unipixel build the capacity to provide it with touch screens.

To further support this data, one can look at the Craig-Hallum research note that was published yesterday (Jan. 22) when it increased its Price Target from $22 to $24. These numbers seem low compared with what I am postulating, however, it readily admits this:

As for 2014, which we are using in our price target calculation, we are only assuming that they produce at 200K units/month for the entire year. We obviously think these numbers are quite low, especially considering that they are ramping capacity to over 6x our estimates by the end of 2013. When looking at a scenario analysis, which we published in our December 10th note, it is clear that the company has the ability to generate more than $9.00/share in earnings next year with just the existing partnership.

Below is a chart to calculate potential EPS given various margin assumptions on the left and unit sales per month at the top. I have assumed the following: OpEx of $12M per year for each 1M units produced per month. Taxes of 35%. Fully diluted share count of 14M (it is actually around 13.5M).

		Units per month in Millions
		0.5	1	2	3	4	5
Gross Margin	50%	2.5	5.0	10.0	15.0	20.1	25.1
	60%	3.1	6.1	12.3	18.4	24.5	30.6
	70%	3.6	7.2	14.5	21.7	29.0	36.2
	80%	4.2	8.4	16.7	25.1	33.4	41.8

I personally believe that a P/E of 25 or 30 is fair given the growth, but even at a conservative P/E of 15 the price targets get very large, very quickly. Keep in mind that Unipixel recently raised its capacity ramp to over 3M units per month by the end of 2013. At just 50% margins, this will allow for over $15 EPS.

And yet, the price is currently at $15 per share. So clearly there must be significant risks, right?

The Risks

Dilution: As with any small company, one of the risks is dilution. However, that seems extremely unlikely with Unipixel. The company has $15M in cash, zero debt, it will be receiving an additional $15M throughout 2013 from the PC Manufacturer, and it will soon be cash-flow positive. Management has repeatedly stated that it will not be needing to do any more secondaries, thanks in part to the Preferred Pricing Agreements (detailed in Green River Asset’s article above).

Manufacturing: Unipixel does not have mass-production up and running yet, and until it does, this will be a risk. It currently owns one printing line (able to produce 1M units per month) and has already ordered two more. It also owns one plating line, which it is currently building / testing. Each plating line can output 100k units per month — it has already ordered two more for April and parts for eight more for the second half of the year. Based on the orders, it seems it is very confident that mass-production will work and it will be able to fill this capacity (probably because of the current customer’s needs and potential future customers). Up until now, it has been producing UniBoss at a 3rd-party facility using the exact same equipment. The only difference is that it didn’t utilize the roll-to-roll technology, but it is very confident that this will not cause any issues. Apparently, so is the PC manufacturer.

Other: There have been two SA articles written recently, which were very negative toward Unipixel. They can be read here and here. Both articles have been brilliantly refuted by Green River Asset here and here. But I will touch on them briefly. Both articles focus on the following points: The market isn’t really that big, Unipixel’s tech is unproven, and there are strong competitors. I feel as though I have painted a very clear picture as to why the market is actually very large. I have done this through estimated touch sensor revenue projections as well as looking at actual units of devices being sold. I even took the liberty of using many of the same articles that the second negative article (by Benjamin Wiley) linked to.

As for Unipixel’s tech being unproven, this is impossible for me to discuss. I have no way of proving to myself or anybody else that the technology is viable. But on the other hand, these authors have no way of proving that it is NOT viable. In the end, we can do as much due diligence as we want and speak to as many engineers as we would like, but the only way to know for sure is to view demonstrations. Here is a great demonstration that not only shows the great ability of UniBoss, but also its transparency. Also, keep in mind that the large PC Manufacturer would not have signed up and asked for limited exclusivity and put forward $15M for production if it was not impressed. Also, numerous institutions including FMR, Bank of America, and Wellington, all own over 5% of the shares outstanding and clearly have faith in Unipixel’s technology and ability. Most importantly, however, the company believes in itself. Employee compensation is heavily weighted in stock options and just last week on January 15, the company issued stock grants to itself at a price of $16.35 vesting in August of this year. It clearly believes that it we will be much higher by then.

Finally, other competition. The main competition is Atmel’s xSense (also copper metal-mesh), however it is not nearly as inexpensive as UniBoss. From talks at CES, it is clear that Atmel (ATML) is advertising its product as an improvement to ITO, and not as a competitor to UniBoss. I have even heard chatter that Atmel is in talks with Unipixel about developing a new controller for the company. Other competitors would be Cambrios and other silver metal-mesh companies. While these are certainly competitive, they are also not nearly as inexpensive as UniBoss and they do not provide any significant advantages (again, information is from talks with people at CES).

I’m not trying to suggest that Unipixel will get 100% of the market share. Even if it miraculously had capacity, this would never happen. However, I am trying to suggest that it is not at all unreasonable to expect a 5%-10% market share, and maybe significantly higher. In all, it is clear to me that the potential for Unipixel this year is huge and the risks are, in actuality, quite small. I expect more customers to sign up in the coming months, especially once they get manufacturing up and running and prove that it is feasible.

Unipixel will be having its earnings announcement for Q4 around March 1 (still unconfirmed), and I’m sure that by then it will be able to discuss much more of this in detail. Until then, I expect potential catalysts to be any press releases of new partnerships / customers or PRs relating to the first plating line being functional.

NJYTOUCH

Synaptics puts touch on the back of tablets

Reports are circling around Apple’s supply chain of a potential shift in the company’s display strategy for its future iPhones and iPads — moving back to LCDs and away from touch panels — but a drastic realignment of its supply chain is probably not likely, observes DisplaySearch.

Calvin Hsieh, senior analyst at DisplaySearch, cites a report from China that Innolux has delivered “touch on display” samples for the iPhone, another China report that Innolux and AU Optronics have provided “one-glass solution” (OGS) samples for the iPad Mini, and his firm’s own analysis that theiPhone 5 uses in-cell touch technology but the iPad mini uses a glass/film dual ITO (GF2, or DITO) structure. With both those processes struggling to attain good yields, could Apple end up changing its display technology adoption midstream?

TOD is a proprietary on-cell touch technology developed by Innolux in which the sensor is located on the upper glass (the color filter substrate) beneath the top polarizer. On-cell touch combines both LCD and touch so it must meet Apple’s LCD display requirements; Hsieh notes, adding that Innolux accounted for less than 10% of iPhone 4 display shipments (3.5-in, 960×640). “If Apple were to adopt TOD, it would very likely request that Innolux share its technology, structure or even patents with Apple’s other LCD suppliers in order to ensure adequate supply,” he writes,” and Apple also probably would want to take over the controller IC and algorithm from any Innolux partners (e.g. Synaptics). Apple already owns DITO patents, he adds.

The OGS display technology is an even more complex problem, Hsieh points out. OGS integrates the touch ITO sensor circuits into the cover glass, via two possible methods: a piece type such as “touch on lens” (TOL) or a sheet type, each accomplished with a different process. Either way the X-Y sensor patterns are on the same side of the substrate, so it’s called a “SITO” structure or “G2.” Touch panel maker TPK owns patents for the piece-type OGS method, and claim they have key SITO patents as well and are suing Nokia and Chinese panel maker O-film, Hsieh notes; whether the aforementioned Innolux-AUO partnership could produce the technology given the TPK patents is unclear, he says.

There’s more to Apple use of OGS display if it chooses that route. Sheet-type OGS has a compressive cover-glass strength of 500-6600 Mpa; Corning’s IOX-FS and Gorilla glass have 600-700 Mpa for smartphone sizes and cannot be used in sheet type, Hsieh says. Piece type has the higher CS value but are difficult to mask-stamp and align under lithography, and throughput may be low.

Among iPhone 5 panel suppliers only LG Display offers everything from in-cell touch LCD to cover glass lamination (consigned by Apple), Hsieh notes. Other in-cell touch LCD makers Japan Display and Sharp rely on partners for the cover glass. If Innolux and AUO continue with their OGS partnership, they have a choice:

An integrated offering of LCD, OGS sheet patterning (cover glass with SITO sensor), and lamination let Apple specify the IOX-FS glass sheet with compressive strength of Gorilla 1; “In this scenario, LG Display will never give up and must be one of the suppliers,” he notes.

Integrate the LCD, OGS piece-type sensor patterning, and lamination, using consigned cover glass pieces from other finishers (e.g. Lens One). The challenge here is expanding tools, throughput, and yield for piece-type patterning, to be acceptable for the iPhone’s >100M unit base.

All that is somewhat speculation, though, because long-term Apple touch supplier TPK already “has excellent OGS sheet and piece-type technology, and high lamination yield rates,” and is unlikely to simply hand over that business to new entrants. “Although AUO and Innolux have advantages as LCD makers and can shorten the supply chain by producing LCD and touch at the same time, TPK has strength in OGS integration from sensor patterning, cover glass finishing (for sheet type), to module lamination,” Hsieh writes. “Thus, there is a good chance that TPK will once again be a key touch supplier to Apple if it decides to change touch structures.”

NJYTOUCH

ViewSonic Smart Display VSD220 Review

It’s hard to review ViewSonic’s new Smart Display VSD220 without thinking back to another of the company’s unusual products that we reviewed almost a decade ago: the Air Panel V110.

The Air Panel used Microsoft’s “Smart Display” technology to essentially let you remotely control your PC over Wi-Fi for browsing and MP3 streaming. Not to rehash ancient history, but Smart Display was just another charred carcass on the long road to a successful consumer tablet computer.

Besides functioning as a desktop-size Android device, the VSD220 can serve as a stand-alone touchscreen monitor for a full-fledged PC.

ViewSonic’s new Smart Display VSD220, though, is actually nothing like its predecessor and, in fact, shows how much the world has turned. While the Air Panel tried to leverage desktop power, the new Smart Display VSD220 reverses the tide by leveraging tablet technology in a desktop.

The Smart Display VSD220 is essentially a 22-inch, 1920×1080 touch-enabled monitor withAndroid 4.0.4 in it. That’s right, there’s no need to hook it up to a PC—you just run Android directly on the monitor. Think of it as an Android-in-one.

The unit features a dual-core, 1GHz TI OMAP 4428 Cortex CPU with a PowerVR SGX 540 GPU. The screen is an LED side-lit panel with optical touch sensors. Unlike the capacitive-touch overlay that your tablet or phone uses, optical is actually affordable in a large screen. A capacitive-touch panel alone at 22-inches would cost about $900.

The unit sports two standard USB ports on the right, a Micro USB port on the left, Ethernet, audio out, Micro HDMI in, and a microSD slot. Android has had USB HID support for some time and adding a USB mouse and keyboard to the VSD220 let us navigate the interface and type mostly without issue. Some of the apps we ran, such as Minecraft, ran only with touch.

In performance, the unit was incredibly underwhelming. We couldn’t find the data sheet for the OMAP 4428, but we’d guess that it’s two notches below the OMAP 4430 used in the Kindle Fire. As much as the original Fire was a breakthrough tablet, performance on it sucked. In scrolling and panning, you can tell the OMAP4430 and PowerVR SGX GPU are underwater here. The situation is not helped by the OMAP’s support for only dual-channel low-power DDR2. Just as with a notebook or desktop PC, the more memory bandwidth you can get, the more performance you’ll see in your applications.

Although it’s not a direct comparison, we decided to see how the Smart Display VSD220 compared to Google’s Nexus 7 tablet in a few benchmarks. The result was ugly for the ViewSonic.

We know that performance isn’t the top check-off item on thin-client OSes, but we’d like smooth scrolling at least. ViewSonic engineers surmised that the slow performance could be from the optical digitizer, which doesn’t have the resolution of capacitive touch—but the unit felt slow using the mouse to move around, as well.

By now, we’re sure you’re asking the pesky “why even build such a device?” question. At this point, we don’t know. We understand that some computer phobes may find such a low-maintenance device appealing, but for all others, we’d suggest a pass. The unit does have one redeeming quality: Hook an HDMI and USB cable to your PC, and you can run it as a touch-enabled panel for Windows 8.

But for us to even consider this device, we’d want a faster CPU and GPU along with an optimized OS such as Jelly Bean. Then we’ll talk.

NJYTOUCH

New Panasonic Plasma TV Range

Like Panasonic’s 2013 LCD TVs, the plasma range offers access to the firm’s Viera Connect Smart TV platform for apps, catch-up TV, VOD services and more. There’s also a handy built-in media player for access to content via USB or DLNA (local network). One thing that’s different about Panasonic’s plasma range, though, is that unlike the firm’s LCD TVs, the plasmas use active-shutter 3D technology. That means you can enjoy 3D viewing in full resolution (Full HD: 1920 x 1080 pixels). However, active 3D glasses rely on built-in electronics, making them heavier and more expensive than passive models.

ZT60 Series

Panasonic’s new flagship plasma TV for 2013 is the ZT60. It features a brand new plasma screen, called the Studio Master Panel, as well as boosted screen brightness and contrast. The anti-glare finish also promises to be more effective than in 2012 models, and this year’s TVs are made with no lead or mercury.

This TV comes with all the usual high-end features, including a “3000 Hz” motion compensation mode (although there’s no mention of the actual screen refresh rate), a dual-core processor, voice controls and a second remote with a touchpad (Viera Touch Pad Controller) for quick and easy navigation in the TV’s menus. Plus, there’s a built-in webcam for video chat with Skype.

A fun new Touch Pen function has landed in Panasonic’s high-end plasmas too, which lets you draw pictures on the TV using a compatible stylus. That should keep the kids quiet for a while!

The ZT60 will only be available in one size: 60″ (152 cm) TX-P60ZT60.

VT60 Series

The VT has all the same functions as the ZT60, except that it doesn’t get the all-new screen panel. It uses the same Infinite Black Ultra panel as the VT50.

This TV will be available in three sizes: 50″ (127 cm) TX-P50VT60, 60″ (152 cm) TX-P60ST60 and 65″ (165 cm) TX-P65VT60.

ST60 Series

The ST60 uses an Infinite Black Pro panel and comes with a motion compensation mode announced at 2500 Hz. Unlike the two higher-end models, there’s no dual-core processor, second remote, voice controls or Touch Pen functionality. This is clearly a more basic TV, but picture quality should still be pretty good, as this plasma inherits most of its tech specs from the ST50.

This TV will be available in four sizes: 50″ (127 cm) TX-P50ST60, 55″ (140 cm) TX-P55ST60, 60″ (152 cm) TX-P60ST60 and 65″ (165 cm) TX-P65ST60.

NJYTOUCH

Science and technology: Apple Cuts iPhone 5 Display Orders By 50%

Science and technology: Apple Cuts iPhone 5 Display Orders By 50%: Journal reported on Monday that Apple is confronting low demand for its new iPhone 5, reason why the Cupertino-based company has cut the d...

Apple Cuts iPhone 5 Display Orders By 50%

Journal reported on Monday that Apple is confronting low demand for its new iPhone 5, reason why the Cupertino-based company has cut the display orders for its flagship smartphone by 50%. The reputed publication is quoting sources close to the matter that say that Apple has also cut the orders for other iPhone parts, as well.

According to the sources, we are talking about a cut of 50% for the iPhone 5 displays that are supposed to ship in the January – March time frame. There’s also another source that claims that Apple did the same for other iPhone components.

Even tough this might suggest that Apple’s iPhone 5 is not selling well, we shouldn’t jump to conclusions, yet, as the Cupertino-base company might as well have enough parts on stock, so it would make no sense for the suppliers to ship new ones.

On the other hand, Apple might also get ready for the production of a new iPhone model, the yet-unannounced iPhone 6 (or iPhone 5S, or The iPhone, or whatever they decide to call it). Therefore, it’s part suppliers might get ready to kick off the production of the parts for the next gen iOS-powered smartphone.

An article written by the guys at Nikkei confirms the information, showing that Japan Display and Sharp touch screen manufacturers have registered drops in LED displays orders for the first quarter of 2013.

It was reported that Apple initially planned to order 65 million touch panel units from the two aforementioned companies, but, for some reason, the number have been reduced.

It’s not clear yet whether LG Display, another important screen supplier for Apple, was affected, as well.

njytouch