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Microvision, Inc. (MVIS)
Q2 2008 Earnings Call
August 5, 2008 4:30 pm ET
Tiffany Bradford - Investors Relations Specialist
Alexander Tokman - President, Chief Executive Officer, Director
Jeff Wilson - Chief Financial Officer
Darice Liu - Maxim Group
Joe Dubroth - Morgan Stanley
Analyst for Richard Woodall - Financial Security Management
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. In addition to myself, participants on today's call include Alexander Tokman, President and Chief Executive Officer and Jeff Wilson, Chief Financial Officer.
The information in today's conference call may include forward-looking statements, including statements regarding projections of future operation, product development, introduction, applications, and benefits, business partnering expectations, market opportunities, and growth and demand, as well as statements containing words like "believes", "estimate", "expects", "anticipate", "target", "plans", "will", "could", "would", and other similar expressions. These statements are not guarantees of future performance. Actually results could differ materially from the future results implied or expressed in the forward-looking statement.
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are in included in our most recent annual report on form 10K filed with the Securities and Exchange Commission under the heading "Risk Factors Relating to the Company's Business" and our other reports filed with the Commission from time to time. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, changes in circumstances, or any other reason. I would now like to turn the call over to Alexander Tokman.
The outline of today's session is as follows. I will provide operating result and Jeff will comment and provide detail on the financial results for the quarter and for the first half. I will comeback and give you strategic outlook and we will wrap it up with the questions. So, let me begin with the operating results.
Although second quarter was quiet by external IR standards, we have made very important progress in all four key areas. Specifically, these are customers, technology, supply chain and liquidity. Let me begin with the customers’ update. We believe that market's interest in PicoP remains strong. During the second quarter, we received several letters of intent from customers for the PicoP accessory product for 2009 release. We expect to commence the extended field trials with our OEM partners very soon to solicit broader feedback for the final accessory product requirement.
It is our belief that successful completion of this extended trials that will extend through the remainder of this year and early portion of 2009 and will include both collections of consumer feedback as well as the internal testing on the part of our customers will lead to formal purchase commitment. During this time, we will be working with our OEM partners to determine as their ultimate timing for the accessory product launch. However, we expect to be in a position to launch the accessory product in the first half of 2009 and support volume production in the second half of 2009.
Let us move on to technology and supply chain. During the second quarter, we have made several important advancements on our core technology. As you all know, the new wide-angle MEMS scanner is an integral part of our PicoP display engine that we targeted to serve several different market segments. The requirements for this scanner are driven by stringent requirements by the cell phone market. The new scanner is required to provide reduced power consumption with similar or lesser form factor and be robust at the same time to shock and drop that as compared to earlier Microvision design.
In late 2006, we began the definition and design of the first MEMS device specifically focused on addressing the need of the mobile projection display market. This new device was expected to challenge the existing technology limits and required significant innovation in MEMS scanner and package design on the part of our development change. We exhibited the first prototype of this new scanner about a year ago at the Society of Information Display. We are pleased to say that in the last quarter, we began internal testing of its key attribute.
First, let me talk about power consumption. The power consumption of the latest version of the MEMS scanner has been reduced by approximately 75% over the previous version initially shown about a year ago. What is the significance of this reduction? Let me give you the big picture. The cell phone manufacturers told us that the target spec for the overall power consumption for the embedded Pico Projector which includes MEMS scanner, light sources, ASIC optics and other components should not exceed 1 ½ watt.
Before the 75% reduction that was measured recently, MEMS power contribution was about 25% of the total allocated budget. To date, it is approximately 7%. Second, we implemented internal testing and completed internal testing of the wide-angle MEMS scanner for shock and drop survivability. These results show that our MEMS scanning mirror exceeds the shock and drop tests requirements consistent with mobile handset industry standard.
We are not done yet. There are more reliability tests in progress but the structure reliability milestone is a good validation that we are moving in the right direction. On the ASIC's front, we progressed with our effort on further miniaturization and power reduction of the key ASIC subsystem necessary for the accessory and embedded product.