Reuters quotes Robert W. Baird analyst Tristan Gerra saying "Our checks indicate the new iPod nano will feature an OmniVision VGA sensor". He expects the average selling price for this chip at 20 cents, compared with an estimate of $1.50-$1.60 for a 2MP sensor in the iPod touch.
Gerra predicts: "Automotive is going to be an avenue of growth. But still, for the next couple of years, I think cellphone is going to be what matters the most for companies like OmniVision or Aptina".
That's brutal!!!
ReplyDeleteFor sure ! And if this price is true for OVT especially.
ReplyDelete0.20? how can this be possible for anyone?
ReplyDeleteHas to be a misquote. But the rest of the paragraph is suspect also. "$1.50-$1.60 for a 2MP sensor in the iPod touch". My understanding is that a 2MP part was never considered for the touch.
ReplyDeleteThis price is not possible, simple economics. Apple carries a lot of bargaining power for sure, but lets say Apple ships 100 million Ipod nanos in 2010. This generates something like US$20M for OV. This is pocket change, and I don't think there is enough reward for OV. Its a crappy deal if it were true
ReplyDeleteWhat do you think OV's cost for a wafer start? How many good parts per wafer? At $0.20 per part, I've got to believe that even the 1/13" part would not be profitable once it includes packaging, test, etc.
ReplyDeleteMost of these Wall Street guy's don't know anything. They just repeat what somebody in the industry tells them. I think somebody decided to yank this analyst's chain a little bit.
1/13" sensor on an 8" wafer with no packaging would have a raw cost of $.30-35. There is a mistake in the article.
ReplyDeleteHe might have meant the module @ $2 and someone put the decimal point in the wrong place.
The price of .20 vs 1.00 is not critical to Apple. They would pay 1.00 for good quality before they would pay .20 just to ship it. Apple's decision on that module would not have been about cost. It would have been quality. There would not have been a reason to go to .20.
ReplyDeleteAccording to sources, 2MP with raw output was considered for iPod Touch. But, OV messed up the deliveries. Also, do not think there is any mistake in those numbers. Apple is a tough negotiator. Apple usually pays the cost. Not the margins. Wanna make money? You go find a sucker somewhere else!
ReplyDeleteI have heard the same about Apple. Apple is like Walmart with their suppliers.
ReplyDeleteStay away from Apple then. If they want quality then make them pay for it. 20 cents does not do anyone any good in this space. There is no reason to go that low. How many of the ipod touches do you have to sell? Say OV could make a few cents. You can't sell enough ipods to pay for the business lunch you expensed to discuss it.
ReplyDeleteIts pretty clear that $0.20 would be BELOW COST even for OV who is supposed to get cheap wafer starts from TSMC. Why would OV or anyone else for that matter sell product with a negative GM? Don't these wall street guys even bother to check their facts?
ReplyDeleteLet's think in this way.
ReplyDeleteCurrent OV7670 price in China is around 0.68$.
It is a 1/6" VGA in CSP package.
Thus, it is still possible to have the VGA within the cost under 0.2$ but really low margin. If I were Hung, to have a STAR customer and attract more investors is better than to keep high margin...
Ummmmm ... you meant Hong, I think, LOL.
ReplyDeleteAs far as the OV7670, I doubt that OV makes any margin on this chip right now. SETi has really hurt OV in China. That said, you have a good point if the nano sensor is 1/13". Maybe OV wafer start costs are even lower than I thought.
To Appease a really demanding customer and to get funding - OVT decides to get that low on pricing? That's suicidal...and, suicidal for the industry.
ReplyDeleteOh... well, perhaps this is but natural in Capitalism.