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Final INVN pre-earnings thoughts -2
A subscriber asked if my SA article was responsible for the bump in INVN. It might have some effect, but I don't think it's material. I mostly wrote the public article up to cover my bases; I want to be able to say I told you so to the rest of the world, just in case InvenSense announces something with this report. I figure subscribers have now had a full quarter to absorb the info since I first published it to them. I could easily see a successful Coursa Retail sales effort taking another 1 to 3 quarters, though. Only at that point would I start to give up hope.Actually, INVN has been trading strangely and increasingly to the high side for the past month. A more minor version of that is pretty common going into earnings, and it can sometimes be more pronounced when the last report was a very bad one, as traders bet on a return to the prior trend after a kitchen sink quarter. So that's my best guess.
Much of the media was pedaling very low projections, for Apple's
report, but as I expected it was pretty much middle of the road
with iPhone units down 20% QoQ and 15% YoY. I doubt that spells
much relief for the InvenSense chip business, but both stocks are
up this morning. That relief could turn out to be short-lived
where INVN is concerned. Reliance on a single company for a large
portion of sales is very dangerous.
A big part of why I say that is that the ST Micro report this
morning seems to indicate that the company continues to get wins
in motion sensors. Furthermore the company's collaboration
with Qualcomm doesn't bode well for InvenSense's legacy business
or the buyout prospects from that company.
I think InvenSense still has a long road ahead, but until other areas like microphones can start to make up for motion sensors, it's going to be a bumpy, uphill one.