Mirasol Could Fetch Billions for Qualcomm

by Ryan Fitzwater, Director of Research, The Oxford Club

Mirasol Could Fetch Billions for Qualcomm

by Ryan Fitzwater, Investment U Research

Thursday, November 24, 2011

The smartphone and tablet industry has revolutionized the way we communicate and consume information, entertainment and media.

Every day mobile devices are achieving stronger processing power and quicker downloading speeds, but one thing lags behind... liquid crystal display (LCD) screens.

Current screen displays siphon more battery power than any other part of tablets and phones. The LCD board needs a substantial amount of power to produce bright light to shape images.

And while Amazon's Kindle offers e-ink technology, which guzzles a lot less energy than LCD displays, the e-ink surrenders color and the capability to generate video playback and game play.

Have No Fear, Mirasol is Here

At last, Qualcomm Inc. (Nasdaq: QCOM) has developed technology that could link low power consumption with colorful display.

Dubbed Mirasol, this display screen uses ambient light, which consumes a tenth of the power compared to LCD screens. The technology tunes the color of incoming light and reflects it back to the viewer - much like the wings of a butterfly.

Described like the pages of a magazine, Mirasol screens use small cavities that store color to push up against display glass to project the desired color, and use a very small voltage to do so. And Mirasol provides consumers an image with no glare.

Since this isn't light projection but more of a canvas display of color, in-the-dark LED lights (installed around the edge of the panel) are used to illuminate the picture, still consuming less power than LCDs.

Pike Research has stated that the Mirasol display would permit more than twice as much web browsing than LCD displays.

In 2004, Qualcomm bought the startup company Iridigm that created the Mirasol technology. Since its acquisition, Qualcomm has been tirelessly refining this technology in hopes to bring it to the commercial market.

There are still some kinks to work out before production goes full scale, but the company hopes to push Mirasol out to consumers in the second half of 2012.

The company currently sells mobile chips to Samsung, HTC and LG - all customers they are hoping to sell Mirasol to once they're ready for mass production.

Building for the Future

Qualcomm is currently building a factory in Taiwan that's set for completion in 2012. Once online, the new factory will be able to produce Mirasol displays on a mass scale.

And with a $975-million price tag, they're confident that their display technology will bring in big time revenue.

DisplaySearch analyst, Jennifer Colegrove, stated that Mirasol doesn't have serious competition. Samsung is working on a rival type of display called electrowetting, but it's not nearly as refined as Qualcomm's. Colegrove believes that Mirasol's exclusive type of display can match LCDs but with a fraction of power consumption.

A product like this could push Qualcomm's revenue through the roof. The company already sports strong financials.

Qualcomm Flooded With Cash

qualcomm revenue chart

As of the end of Qualcomm's 2011 third quarter, they have already pulled in record-breaking revenue of $14.96 billion.

Last year's revenue totaled $10.98 billion. The company already achieved a 36-percent increase in annual revenue and they still haven't added fourth-quarter sales.

Not only that - Qualcomm is flooded with cash.

The company currently sits on $11.65 billion in cash with only $1.16 billion in debt. Their debt-to-equity ratio is a low 3.69 percent - superb considering the industry average is currently 28.72 percent.

Operating margins are a healthy 35.44 percent, and third-quarter earnings growth was up 22.10 percent compared to the same period last year.

Investment bank juggernaut Goldman Sachs already holds over 21 million shares of Qualcomm stock.

With Mirasol display screens set for mass production in 2012, the company may possibly break its revenue record two years in a row, and hand investors big profits along the way.

Good investing,

Ryan Fitzwater

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