...OmniVision's bullish forecast all but confirms it will be supplying the rumored iPhone 5. The optimistic sales outlook is yet another indication that Apple will be launching the iPhone 5 very soon."
Seeking Alpha's transcript of Omnivision's quarterly earnings call has few interesting bits of info:
- The cash balance went down by $94M due to the decision to increase the inventory
- The bulk of this inventory is OmniBSI-2 devices
- An unusually big increase in 1.3MP sensor shipments in the past quarter is explained by the adaption of HD video across all mobile devices
- The reported GAAP gross margin is 19.1% and might go down further next quarter. This is explained by the higher cost of OmniBSI-2 sensors and their bigger proportion in overall shipments
Some quotes:
Shaw Hong, CEO:
"In Q1, we recorded revenues of $258 million and we shipped 166 million image sensors. On a non-GAAP basis, gross margin was 19.5% and net income was $11.6 million.
...Our cash balance decreased by $94 million to $237 million and our inventory balance increased by $112 million to $403 million. These were results of a strategic decision to build inventory to support our fast growing business in the face of strong seasonal demand."
Hasan Gadjali, VP Marketing and Business Development:
"...our most advanced OmniBSI-2 technology such as OV90772, OV5690, OV8850 and OV12830, ...are now being selected for premium mobile device."
Anson Chan - CFO & VP, Finance:
"R&D expense in the first quarter of fiscal 2013 totaled $28.8 million, a 6.2% increase from the $27.2 million in our fiscal 2012 fourth quarter. The increase in R&D expense was driven by an increase in R&D headcount.
...We currently expect our R&D expense in the second quarter of fiscal 2013 will increase further at a low double-digit percentage rate."
Most likely Omnivision has won the Iphone 5 and Ipad Mini contracts. Congrats to Omnivision and it looks like Sony screwed up this time.
ReplyDeletethanks for the speculation. here are some facts. omnivision forecasted 100 million dollars more of revenue for the current quarter ending in october but only forecasted between 21 and 37 cents (a midpoint of 29 cents) of earnings per share computed on a proforma basis. analyst's midpoint for these earnings was 33 cents. so even though omnivision is forecasting 100 million more of revenue, the earnings are less than analysts expected for the lower revenue number. that's how bad and how fast margins are collapsing in the eyes' of the analysts. whether omnivision can regain these margins is another issue. i personally doubt it but wish them all the luck.
ReplyDeletehttp://finance.yahoo.com/q/ae?s=OVTI+Analyst+Estimates
ps: i would not say sony screwed up if it did not actually win the back camera for the iphone 5; rather, maybe they did not want to make next to nothing to beat omnivisions offer of giving the product away apparently at, near or below cost, according to analyst estimates. i'll wait till the teardowns to say who won what. guessing brings me no joy.
Apparently Sony's Stacked CMOS sensor is not as good as they claimed and not good enough for Apple. Apple only wants the best of the best.
DeleteThey want the best and buy onnivision? No way.
Deletemight also mention that omnivision might just be the backup supplier for the sensor, that it had to build some part of 400 million in inventory to facilitate this, and it is not guaranteed selling to to apple unless sony is unable to supply all of apple's needs.
ReplyDeleteand, or, omnivision may have been required by requirement contracts with tsmc to produce that inventory even though it was not sold.
you might think that to whatever extent the inventory was sold would have been disclosed by the company to executives if that amount was substantial. omnivision's failure to indicate the percent of inventory sold but yet to be delivered arguably may mean that all or part of it will not be sold, and as indicated by one of the analysts, may have to be written down.
Hi Eric from OVTI message board...
DeleteIs Tina here as well?
busted...
sorry, in the last paragraph of my post at 5:34am, i should have said "disclosed by the company to analysts (not executives)." lol obviously, there's a big difference.
Deleteand to respond to the later post asking about aptiva losing mobile marketshare, i believe their execs said they were trying to move away from phone product because of low margins, lots of competition etc... they're more into the high-end.
kind of like omnivision has said for years that it wants to get away from a majority of low res and vga biz but hasn't really started until recently and last quarter asp was $1.57.
and as far as apple making it's own sensors, that would involve adding a lot of risk and overhead to their model. i know they did something like that with their processors in terms of design, but i doubt they'd want to fab or make their own sensors. and i have seen plenty of patent apps and employment ads for cis guys.
apple is a class outfit, same with aptina. and there's a lot of great technical people at omnivision. as an investor, i'm just not thrilled with some of the management and how they value shareholders or treat analysts. and i will not even discuss all the hype that surrounds so much of what ovt does, where ever it comes from, who knows?
All the discussions are on OV and SONY. Where is Aptina? Is Aptina losing the mobile market now??
ReplyDeleteAptina is quickly becoming irrelevant.
DeletePretty soon Apple will make their own image sensors. They have been building their image sensor group for a while now
ReplyDeleteWhich foundry do they use?
DeleteThe Orange foundry perhaps (The reason being that one can compare Apples to Oranges?)
DeleteRPK
Agree. Apple got system engineer, pixel engineer, analog designer and now CAD engineer from Aptina, what are you expecting? OV will get in trouble soon if they 100% rely on Apple.
ReplyDeleteIt is not easy for AAPL to make image sensors. Remember, everyone is waiting to sue the hell out of AAPL just to pay it back for its arrogance. And AAPL has no IP in the CIS field -- all shared between SONY, Samsung, Aptina and Kodak (now OV)..AAPL is compelled to buy from OEM suppliers ...
ReplyDeleteThe profit margin is so high for iXXX products. Why would they involve in the CIS business??
DeleteI don't think it is likely Apple will make their own image sensors, even as a fabless unit. It takes a big team and even if they work with TSMC, their design teams needs to be strong and large to keep up year after year with Samsung, Sony and the other suppliers. I think they need these ex-Aptina guys to round out their procurement (spec, eval, QC) and camera and system design efforts. The amount Apple would save per sensor to support an in- house team would be marginal, with possibly no savings at all and likely no technology advantage either.
ReplyDeleteNevertheless, Apple has a vast amount of cash and market value so I suppose if they were to want to pursue image sensor design, losing a few tens million a year in the process would hardly be noticeable in their bottom line. I guess they could do something really unusual in the design space if they wanted to as well.
Maybe Eric, you can propose his JAK(?) pixel concept to them.
DeleteI am guessing you meant jot as part of the Quanta Image Sensor concept. The Apple camera guys were in London in March and heard the talk.
DeleteHow do they think about the JOT concept, please?
DeleteI don't recall discussing the QIS with them. It was the last talk of the day and I left shortly thereafter for an IISW planning dinner, and then left London. If we get the technology to work, I suppose it will be interesting to a lot of companies. But, ha, Lytro, Pelican and Invisage also have interesting technologies. Are they compelling? - that is the real question.
DeleteHave you ever seen any demo sensors from Invisage?
DeleteOnly seen the public releases from Invisage. I remain excited about the potential of the technology, but concerned about some practical aspects as I have mentioned before. But, maybe they will take the industry by storm tomorrow. Or not.
DeleteInterestingly, there is a rumor about Apple considering digital cameras:
ReplyDeletehttp://www.macrumors.com/2012/05/31/apple-working-on-standalone-point-and-shoot-digital-camera/
Another one, iCamera?
Deletehttp://www.tgdaily.com/opinion-features/65590-icamera-thoughts-on-apple-s-rumored-digital-camera
be care of the inventory on hand days now is 174 days. A year ago, it was 55 days. Why need 3 times extra full FAB capa??
ReplyDeleteIphone 5, Ipad mini, OVTI has to stock up...
Delete