IMMR

[Rmagos]

ANOTHER INTERESTING NEWS RELEASE TODAY

Haptics Receiving Broad Recognition


     
     

[Rmagos]

Haptics Receiving Broad Recognition


Business Editors/Technology Editors
     
SAN JOSE, Calif.--(BUSINESS WIRE)--February 20, 2008--Immersion Corporation
(Nasdaq:IMMR), a leading developer and licensor of haptics (touch feedback
http://www.immersion.com/corporate/haptics/index.php) technology, announces
that the benefits of its technology for human-computer interactions (HCI) have
been recognized by several industry authorities.
     
Computerworld magazine named haptic feedback one of the top 10 trends in 2008
that will fuel the best year ever in personal technology. (1) Its December
2007 article cited the long-standing use of haptics in video console games and
stated that, in 2008, haptics will help compensate for the disappearance of
buttons in cell phones and will return to its roots by improving game play on
cell phones.
     
Immersion`s TouchSense ® components for portable devices, which provide
tactile feedback in response to touchscreen interactions, won Electronic Design
magazine`s Best Electronic Design 2007 Competition in the
Components/Displays/Touchscreen Technology category.(2) The awards point out
the technologies judged by editors to be the most significant to advancing
electronic design.
     
Immersion`s VibeTonz ® technology for mobile phones was included in Hot Trends
40: Global Trends to See, a compilation of 40 rising global trends identified
as having a high growth potential.(3) The 282-page book was published in
January 2008 by Korea Trend Research Institute in cooperation with the
International Design Trend Center.
     
The recognition we`ve received from these and other distinguished authorities
corroborates independent research and the real-world experiences of our
customers, said Immersion CEO Victor Viegas. Haptics can help improve the
user experience for a broad range of products in many industries.
     
Research shows that haptic feedback (also known as tactile, touch,
vibrotactile, or force feedback) has been found to:
     

Increase user speed and accuracy(4)
Reduce complication and stress(5-9)
Improve user satisfaction(4,7,10)
     
More information on research performed by companies and universities can be
found in the Immersion white paper The Value of Haptics, available at:
http://www.immersion.com/valueofhaptics.php.
     
(1) Elgan, Mike. 2007. Personal Tech 2008: Top 10 Trends. Computerworld.
December 31.
     
(2) Penton Media. 2007. Penton s Electronic Design Magazine Announces Winners
of Best Electronic Design Competition for 2007. December 10.
     
(3) The Korea Times. 2008. Recent Books: Hot Trends 40. January 4.
     
(4) Brewster, Stephen, Faraz Chohan, and Lorna Brown. 2007. Tactile Feedback
for Mobile Interactions. Proceedings of CHI 2007.
     
(5) Wickens, Christopher D. 2002. Multiple resources and performance
prediction. Theoretical Issues in Ergonomics Science 3: 159  177.
     
(6) Burke, Jennifer L., Matthew S. Prewett, and Linda R. Elliot. 2006.
Comparing the Effects of Visual-Audio and Visual-Tactile Feedback on User
Performance: A Meta-analysis. International Conference on Multimodal
Interfaces. Proceedings of the 8th International Conference on Multimodal
Interfaces, 108-117.
     
(7) Poupyrev, Ivan, Shigeaki Maruyama, and Rekimoto Jun. 2002. Ambient Touch:
Designing Tactile Interfaces for Handheld Devices. CHI Letters 4 (2): 51  60.
     
( Van Veen, Hendrik and J.B.F. Van Erp. 2001. Tactile Information
Presentation in The Cockpit. Proceedings of the 1st International Workshop on
Haptic Human-Computer Interaction, 174  181.
     
(9) Brown, Lorna M. and John Williamson. 2003. Shake2Talk: Multimodal Messaging
for Interpersonal Communication. CHI '03 extended abstracts on Human factors in
computing systems, 854  855.
     
(10) Serafin, Colleen, Ranier Heers, Michael Tschirhart, Chris Ullrich, and
Christophe Ramstein. 2007. User Experience in the U.S. and Germany of
In-Vehicle Touch Screens with Integrated Haptic and Auditory Feedback.
Proceedings of SAE World Congress 2007.
     
About Immersion (www.immersion.com)
     
Founded in 1993, Immersion Corporation is a recognized leader in developing,
licensing, and marketing digital touch technology and products. Using
Immersion`s advanced touch feedback technology
(http://www.immersion.com/corporate/products/), electronic user interfaces can
be made more productive, compelling, entertaining, or safer. Immersion s
technology is deployed across automotive, entertainment, industrial controls,
medical training, mobility, and three-dimensional simulation markets.
Immersions patent portfolio includes over 700 issued or pending patents ìn US and other countries


PS Sorry again for clicking the wrong button but at this time of the night....

[David Randolph]

Finally, great news out of IMMR:

• Immersion VibeTonz(R) Tactile Feedback Platform in Over 10 Million Mobile Phones Around the World
Business Wire (Mon 8:30am)

I expect the stock to rally strongly due to this news. I'll analyze the financial impact of this over the next update (even though the press release lacks financial details).

[notbeln]

I don't believe that management closed the deals with Samsung and LG at 0.1% of sales 

[David Randolph]

I don't believe that management closed the deals with Samsung and LG at 0.1% of sales 

How did you get to that figure notbeln? The company didn't disclose that information.

Thanks.

[notbeln]

Only because of market reaction today. I thouhgt IMMR would rise much more than 8% , after
10M mobile phones sold!!!

Best,
Vova

[notbeln]

Now after I read third Quarter 2007 report I see that I'm not right!

http://immr.client.shareholder.com/ReleaseDetail.cfm?ReleaseID=272798

< We also reached a significant level of third-quarter revenue of $930,000 in our Mobility business," said Victor Viegas, Immersion CEO, president, and chairman of the board. >

But we know that LG and Samsung sold much less than 10M phones!

Best,
Vova

[David Randolph]

Only because of market reaction today. I thouhgt IMMR would rise much more than 8% , after
10M mobile phones sold!!!

Best,
Vova

The information just started spreading Vova, or do you think all eyes are on IMMR?

If "the market", that is, existing and potential investors understood IMMR's technology and especially its business model the stock would be at $40 now, not $9.5, in my view.

< We also reached a significant level of third-quarter revenue of $930,000 in our Mobility business," said Victor Viegas, Immersion CEO, president, and chairman of the board. >

But we know that LG and Samsung sold much less than 10M phones!

In the 3rd quarter the business was still incipient, watch how VibeTonz was shipped almost by as much in the first two months of 2008 as it was in the whole year of 2007. 

[kslifka]

I jumped in IMMR...this morning.  It seemed to have bottomed the past month...but I was waiting for a catalyst.  I wouldn't have seen the news unless David had posted it this morning...thanks.  I jumped in at 8.85.

[tokyopua]

I jumped in IMMR...this morning.  It seemed to have bottomed the past month...but I was waiting for a catalyst.  I wouldn't have seen the news unless David had posted it this morning...thanks.  I jumped in at 8.85.

Great timing, applaud! 

I agree with David, this news is likely to move us up over the course of days or weeks as the stock isnt widely followed.

[la-onda]

TA from TTF, just FYi:

[David Randolph]

Of yesterday's news ...

• Immersion VibeTonz(R) Tactile Feedback Platform in Over 10 Million Mobile Phones Around the World
Business Wire (Mon 8:30am)

... the most important paragraph is the first:

«Immersion Corporation, a leading developer and licensor of touch feedback technology, today announced that over 10 million mobile phones with VibeTonz® technology have been shipped by licensees, including 5.5 million shipped in 2007.»

This information tells me two things:

1 - We can expect a significant financial impact in IMMR in the 4th quarter 2007 results, to be announced next Thursday after the close. I say that of the 5.5 million units shipped still in 2007, 4.5 million or so were in the 4th quarter.

My expectation is that IMMR gets about $1 for each unit shipped, which is almost all pure profit (before taxes). So this means about $4.5 M in revenue and I say $2.4 M in net income, using an effective tax rate of 40% (and costs of $500 K).

As comparison, IMMR had a loss of ($1.98 M) in Q4 2006 and its net income was just $493,000 in Q3 2007. The $2.4 M net income would translate into about $0.08 EPS for the quarter, against expectations of 0 cents.

2 - Things are accelerating and the 10 million mobile phones using VibeTonz are still without Nokia, which sells more than 400 million mobile phones a year. Yesterday's press release doesn't make any mention of Nokia, and that shows how IMMR's management is conservative, announcing only the models already in the marketplace or to be there in a very short period of time.

On another issue, I guess they used the weakness in the share price to buy the $50 M worth of stock they said they would buy. $50 M at an average price of, say, $10, would add up to 5 million shares, reducing the share count from 30 million to 25 million. If this happened and my net income estimate is right, EPS would then be 10 cents in Q4 2007.

I spent the day yesterday reading people's thoughts about IMMR in some message boards. It was clear to me that almost nobody (I could say nobody) really understood IMMR's business model. People don't know that they sell licenses and then receive cash on a per unit sold basis. They don't know that the court settled the Sony case obligating Sony to pay 1.67% of the revenues it had with products using IMMR's technology. Everybody says IMMR is a mystery, because they don't disclose how much money they'll make from each and every licensee and doesn't provide any objective guidance. I think management does this so they can negotiate every license without being tied up by previous deals.

For example, what would Nokia say if IMMR sold them a license for 1.5% of revenue if they knew that Samsung's license was for 1%? Or how would LG feel if they knew that IMMR settled for 1% with Nokia while LG pays 2%? They wouldn't understand "hey, they sell more volume" as an answer, not from a business partner.

Looking at the future, I see IMMR as the World leader in haptics technology which will be used in most electronic devices. IMMR already developed its technology, spending many years and hundreds of millions to do it, and now it is ready to have very fat profit margins. They'll collect about 1% of the revenues of every electronic device sold using their technology, which can be huge.

My view continues to be that IMMR will be at least a $3 B market cap company in a couple of years, that is, about 12 times more than what it is now.

The opportunity seems so clear to me that I feel sad about owning just 3.6% of capital in this stock. This is too little, considering the potential and the safety of the investment. I don't think I was wrong when buying at $20, just early. We've talked about this in previous updates a lot, I believe that at some point investors forgot the long term story and paid attention just to hard facts like revenues and EPS multiples. And those showed a very overvalued picture, when, if we consider 12 months down the road, IMMR is deeply undervalued (there weren't any mobile phones with VibeTonz in the past, therefore no meaningful revenues, therefore no meaningful earnings - everything is changing now).

I'm going to do something that I've never done in the past (not that I recall) and I'll use the 50% decline to my advantage by buying another 5% stake in IMMR. I'll increase my exposure to this stock from 3.6% to 8.6%.

I don't think this is an unfair practice, since you can do the same with your portfolio. I picked the stock at the wrong time, but there's no rule saying that I can't increase my exposure now that the trend is turning bullish again and there's more evidence that my long term fundamental case was right all along.

In the future, if I feel like I made a mistake today I'll correct that mistake by reducing exposure again or eliminating it completely. But as it is now I feel that I need more IMMR in the Main Portfolio and I need it now!

The Trading Plan is:

Buy another 5% of capital in IMMR.

[usedcasting]

Nice post Dave! Really like your approach here.
I think yesterday's move will draw some attention.

uc.

[buddjas1]

Looks like a one-month triangle breakout to the upside, which is my cue to buy finally. 

Thanks for the pick David. applaud

[Ramsburg]

Hello

Just to say that I've changed IMMR on the open trades table, to 1 composite trade instead of 2 separate trades, this way the Entry price is an average price:
1500 shares bought @ 20$
2000 shares bought @ 9.85$
= 3500 shares bought @ 14.20$ (average price)

best regards,