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virtual reality, earnings and InvenSense ?3

14:38 28-Apr-16


A tear down of the Oculus Rift shows that it uses a Bosch sensor, but the tear down of HTC's Vive reveals that it uses not one, but two InvenSense MPU-6500 motion sensing chips.  One is for the headset and the other is in the controller.  Even so, I doubt there will large volumes, but hope margins will be decent. 

Recent earnings reports do not bode well on that front.  While Apple's report was bad for AAPL, the volumes were actually okay.  However, the ST Micro report shows continued price erosion in chips like these.  STM needs the volume to have its fabs operate well, so InvenSense management is right not to compete on price and instead focus on the API, intelligence and data surrounding the chips. 

In my opinion, management needs to be to show some progress on the data and services front when InvenSense earnings, a week from Monday.  Analyst estimates have not changed recently, but they are above the break-even guidance given by management.  I still hope to have some more info out the competitive landscape for Coursa Retail before then.