I am not sure if Apple's iPhone uses Synaptics' technology, but I expect other manufacturers to follow suit with similar phones with gesture-recognition This would definitely contribute to Synaptics' growth in the coming years. In fact, Synaptics' latest technology is already in a growing number of cell phones, including LG's Prada touch-screen phone launched earlier this year in South Korea and Europe. Moreover, the company has also signed up Samsung and Motorola for future such versions of their phones.
However, over 80% of Synaptics' revenues come from laptop sales. Indeed Synaptics has 65% of the world's laptop market share, with laptop sales set to grow at 27.4% this year to 105.3 million units. That follows growth of 26.4% last year and 33.5% in 2005. Even though such growth will decelerate over the next few years, Synaptics plans to have more components in laptops than it does currently by using dual-mode pads and light-touch controls. More and more laptops now have buttons for DVD playback, volume control and other short-cuts for better look and feel.
A few years ago, SYNA was extremely popular. It was the exclusive provider for Apple's (AAPL) iPod click wheel. Then news of Apple diversifying its component providers which would result in lost business for SYNA sent the stock hurtling down after a successful run from $15 in Aug 2004 to $38 in Nov 2004. The correction was quite severe as the entire gain of 150% was wiped out. Since then, the stock has pushed and prodded its way to its old highs and since July 2006, the stock is up 110% to an all time high of $40.44 yesterday. 14% of the float is currently being shorted, and with earnings growth recently clocking in at 87%, the stock has quite a few reasons to continue its recent bull run. Keep an eye on earnings this evening. It could give the stock the next leg up.
Faisal Laljee
Full Disclosure: I do not own AAPL or SYNA but my position can change anytime without notice.
4 comments:
They did not get their fair share of interest or coverage, with Friday being what it was. Hell it went to new highs in after hours and than down and same in pre trading.
This is a stock that deserves more attention. Why...simply put. They have the same technology that Apple uses for the touch screen but Apple sent it out to a German company Balda, who only recently , made a deal with a Taiwan company for the technology and space to produce this. Balda's main concern is making the plastic shells for cell phones. If anyone doesn't know, the phone touch screen is made of 2 pieces of glass with electronic doo-dada in between. In actuality, you don't really have to touch it.
Anyway Syna has this ability also, so before the phone came out I looked at it as a win win.
aaple uses them great....they don't...i bet a few other people may want that technology for their phones.
Of interest is the relationship with Apple. They worked with them on the ipod, developed the wheel ( sounds funny) thing I believe. Weren't used for the Nano, but when it came tome and CEO Lee kept being asked about his relationship with Apple and is he making the screen, he hinted a lot but chose not to answer. Odd for someone who was kind of left at the altar so to speak with the phone. Unless they have a future relationship possibly, of Lee didn't want to ruin their chances at one.
Either way he could have buried him (Apple) with all the secretive stuff and didn't.
I love the company first and than the stock, but that other stuff makes ya wonder. If they can develop that touch screen and is right now mostly being used on notebooks,, I look forward for the future.
Staples
I do own long SYNA and will continue hopefully to build on it
Very good comment. Thanks for the input. We agree on the company and stock's prospects.
-- Faisal Laljee
Just an FYI, the iPhone does not use Synaptics. Its multi-touch technology is home-grown at Apple...I used to work there and knew the people developing it, and Synaptics was not involved at all.
I do not believe I said Synaptics provided the touch screen for the IPhone. I said that in an article I read was it was speculated it was coming from a company in Germany called Balda. Synaptics was mentioned as a back up possibility if it fell through or they couldn't keep up with demand. Now they did provide some of the touch pads for the new touch Nano, but another company did as well. As of right now, they are the only company in this new Google alliance for free air or something to that effect. 29 companies are involved and I believe picked by google. this is all supposedly for the Gphone. Hey some of my technical know how may be faulty, but the other stuff I'm sure of. Best to all in this tough times
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