“One Company Poised to Dominate the Wearable Tech Ecosystem”

Checking out Michael Robinson's "LifeChips" teaser for Nova-X Report about micro sensors and wearable technology.

By Travis Johnson, Stock Gumshoe, July 14, 2014

Michael Robinson has been a big booster of tech ideas for his Nova-X Report, and lately he’s trying to sell his newsletter by using a special report that he says will reveal “The Wearable Tech Investment Opportunity of a Lifetime.”

So naturally, Gumshoe readers want to know who it is. The spiel starts off with a look at “LifeChips” as a way to give an idea of the growth potential in wearable tech sensors for both medical and other applications, which is very similar to the way he was pitching last Summer for his (much more expensive) Radical Technology Profits newsletter. Back then he was touting Micro-Electro-Mechanical Sensors (MEMS) to “end all disease” and, in the end, teasing the very large ST Microelectronics (STM) as the major patent holder in this emerging field.

This time it’s a little different — and not to foreshadow too much, but he’s still teasing the same basic concept of micro sensors and the boon they will bring for wearable tech in medicine and elsewhere… it’s just that now, for his much less expensive newsletter, he’s teasing a company that I like a lot more. Don’t worry, we’ll reveal the name in a moment, and it won’t cost you anything and you won’t have to click anywhere … we just like to keep the suspense up a little bit.

Here’s how the ad from Robinson launches:

“‘LifeChips’ to Sell Out in Record Time, First Wave Hits Shelves this Month

“Thanks to this new miracle technology, you could live an extra 27 years

“Units expected to s hoot from 1 millino to 300 million overnight

“Sales poised to surve 29,000% and…

“Deliver $50 billion in new wealth to early investors.”

So that sounds exciting, right?

Robinson calls up some examples that you may have heard of — like Google Glass, or the early stage Google project to develop a contact lens that does glucose monitoring, or a wearable continuous blood pressure monitor … and it’s true, there are plenty of sensors and monitors becoming much more portable and useful, often connected to smart phones for constant alerts or consistent monitoring… or even transmission to doctors. You can imagine the benefits, and if you know any diabetics who have implanted insulin pumps and glucose monitors you probably have some idea of why these kinds of tools and sensors are often pitched as tools to both improve health outcomes and lower costs.

It’s not just the mass-market toys like the Fitbit or the Nike Fuelband that are hitting the market — those are fun and useful as they try to measure exertion or monitor sleep cycles, but the medical stuff is going far beyond that and is changing quickly. You can see the full rundown in Robinson’s presentation here if you like, I won’t touch on all the “lifechip” advances he talks about — they’re also similar to the disease-fighting advances he was teasing last year with his “$50 MEMS Chip to End All Disease” pitch.

And then, since we’re all really just looking to get rich quick and easy, we’re told that there is “one little known company” that’s going to give your portfolio a rocket boost. Here’s how Robinson puts it:

“And I’m also going to tell you about ONE little-known company that’s at the very center of the entire Wearable Technology industry – as crucial to the development of this technology as Intel was to the development of the personal computer.”

So what is this company? Some more clues:

“And, one small tech company manufacturers the ONE necessary component used in virtually every piece of Wearable Technology.

“This company’s products are found in everything from smartphones to tablet PCs, from gaming consoles to industrial robotics.

“And they are especially abundant in medical applications.
That’s why I call it the Wearable Tech opportunity of a lifetime…

“Amazingly enough, you can own a piece of this company’s profits for around $20 a share…”

Is that enough? Well, if you’ve been around these parts for a while it might be starting to sound familiar … but just to make sure, let’s check the rest of the clues that Robinson provides as he entices us to subscribe:

“Billions of Wearable Tech Devices Will Need Billions of Sensors

“Founded in 2003 and with a market cap of $1.6 billion, this company’s growth is off the charts. It’s seen its revenues explode seven-fold in just four years, from only $29 million in 2009 to $209 million in 2012.

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“The reason is simple: Its products have become the de facto standard for one of the top mobile devices.

“Its customers include some of the biggest and most sophisticated tech companies on earth… Google… Nintendo… Samsung… LG and many others.

“For example, its sensors are an essential part of Google Glass and other Wearable Tech devices.

“Other customers include Asus, Acer, Motorola, BlackBerry and Pantech, just to name a few.

“And They Are Developing ‘Always On’ Multi-Sensors and Chip Sets That Wearable Tech Needs.”

So who is it?

Thinkolator sez that Michael Robinson is teasing longtime Gumshoe favorite (though I haven’t owned it yet, unfortunately) and oft-teased-by the Motley Fool stock, Invensense (INVN).

Invensense is a chipmaker, they essentially are leading the push in analog-to-digital devices like gyroscopic motion sensors and microphones that can measure the motion and speed of a device in several dimensions but still consumer little electricity and fit inside your favorite teensy weensy little mobile device. Invensense was indeed founded in 2003, and they’ve had two strong waves of big adoption that have helped them grow to this point — first their motion sensors were in the early Wii remotes from Nintendo, then they got built into a lot of the Samsung smart phones.

The company has often been teased as a potential major Apple supplier as rumors about the next version of the iPhone or the oft-predicted iWatch circulate, and that’s happening again this year… and helping to drive up the price of INVN. I came close to buying this one personally a few times in recent months but didn’t end up acquiring shares, to my current regret (it has spiked up a bit in the last couple months — it was a $1.6 billion company a few months ago, now it’s a $2.1 billion company with a share price of about $24).

You can see past notes I’ve shared about Invensense here, or if you’d like another perspective one of the Motley Fool newsletter analysts posted a pretty thorough free article about the company last year here that touches on most of the major factors influencing INVN shares. The bit news this year, and likely the most significant factor that took the lid off the stock price, is the settlement of their patent dispute with ST Microelectronics (STM), the stock that Robinson teased starting last year. STM owns many core micro-sensor patents and STM and INVN were in court over those patents for years, so the fact that they settled their suits and entered into cross-licensing deals for all the relevant patents takes away one major fear for investors.

Still, it’s an unpredictable company that has historically been very dependent on a couple key customers, and it’s not cheap, and the stock is quite volatile. Their earnings jump up and down quite a bit and sentiment fluctuates with their real and rumored design wins, but it would not be surprising if the attention stays very tight on INVN at least until the iPhone 6 and/or the iWatch come out (or more detailed rumors are leaked) over the next couple months — if INVN is not in fact a major supplier to either of those products, it’s still a good company with a strong product portfolio but at that point investors will probably move on and there will very likely be chances to buy it cheaper.

Invensense is not the only company making MEMS sensor chips, and they’re a chip designer and a tech company so they face the same waves of change as all their competitors — new advances come fast, and competition to make things faster and cheaper never stops. Right now they seem to be the market leader in the fastest and most capable motion sensing chips, but that may not persist forever and they are not necessarily a “forever” dominant company — monopolies like Intel’s processor chip business are few and far between in the semiconductor space, so they can make lots and lots of money but we should keep a lid on expectations that they will be dominating this segment of the business in a few years. Maybe they will, but that’s quite speculative and other folks, including big guys like STM, are aiming for their perch.

I keep saying I like it on the dips, and I keep missing the dips because I’m looking at other things … but that’s just me and my money, what matters to you is your opinion and your portfolio…. So what’ll it be, want some INVN for your portfolio? or is it too pricey or otherwise unappealing for you? Let us know with a comment below.

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