This teaser solution first appeared as part of a Friday File that was sent to the Irregulars on January 15, 2016, so it just passed its first birthday… but so many readers are asking about it again now that we’re re-posting it for everyone to read.
What follows has not been updated or revised since then, though the company Jason Stutman calls “the $7 ‘iPhone Killer'” had a good year into the Fall and hit $10 after three good “beat” quarters in a row and analysts raised their estimates for 2017 earnings expectations to 57 cents a share, getting everyone excited… then started to disappoint and received a wave of analyst downgrades and is now expected to earn about 40 cents a share. It’s now down to about $5.50 a share, I have not updated or revised the comments below and have not examined the company more closely in recent months.
The ad from Jason Stutman for the Technology & Opportunity newsletter, and this is the intro that is still catching the attention of Gumshoe readers:
“After years of getting pushed around by Apple, these three technology giants have finally had enough…
“Microsoft, Google, and Facebook have joined forces to create a groundbreaking device that will bring about…
“The Death of the iPhone
Wired magazine says it will ‘change the way we interact with the world,’ and this tiny, $7 tech company is the one thing connecting them all together.”
So that’s our challenge — who is it?
The big picture is, as you might have already guessed, “virtual reality.” That’s the prediction, that this currently “hot” technology of creating an immersive virtual world using headsets and other technology will change the way we do almost everything.
I’m a little nonplussed by how much of a “virtual world” I live in already, sometimes staring at my phone while there are real people around with whom I could be interacting instead, so the idea of all of us wearing augmented or virtual reality headsets and becoming even more depersonalized doesn’t appeal all that much… but there’s certainly a tech consensus that more virtual reality is coming.
And Stutman thinks he’s found the big “hidden” winner of the virtual reality gadget race… more from the ad:
“But here’s the kicker: the little known $7 tech stock that I’ve uncovered has found its way into not one, not two, but all three of the ‘iPhone Killer’ devices currently under development by Microsoft, Google, and Facebook.
“After taking a look inside these three devices, we know one thing for sure: Without this tiny firm’s proprietary computer chips, the ‘iPhone Killer’ wouldn’t even exist.
“Its components have become a necessity, just as Intel’s chips once were to PCs two decades ago.
“In just a moment, I’m going to explain exactly how you can profit up to 6,400% from this $7 ‘iPhone Killer’ stock as these three technology bellwethers attempt to knock Apple off its perch.”
Much of the “story” here is that Microsoft, Google and Facebook, having “lost” the handset war, are doubling down to seize leadership of the next big gadget explosion, and that this will drive mass adoption and get lots of gadgets sold, and this “iPhone Killer” company will benefit.
All three of those companies trade at huge premiums to Apple largely because they’re not gadget makers, so I don’t know that this is a story of three losers trying to catch a winner… but yes, there is a race on to “win” the first stages of mass-market virtual reality or augmented reality devices.
What do we get by way of clues? Well, it’s mostly about the fact that this secret company provides a component that is used in the gadgets being developed by Google, Facebook and Microsoft — here are a few snippets that provide most of the hints:
“… that $7 tech company I’ve been talking about is providing a crucial component for the device: a special kind of computer chip that processes images for the Oculus Rift.
“Better yet, this company has found its way into the devices of two other technology giants determined to kill the iPhone: Microsoft and Google….
“…. this little-known company produces a special kind of display chip, essential for the HoloLens to work.
“And because Apple is being forced to poach Microsoft engineers, you can bet it’ll be following a similar design approach…
“Based on all our internal sources, this tiny company is the only place for Apple’s engineers to turn….Are you getting our free Daily Update
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“One of the most telling indicators is that even technology giant Google relies on our $7 tech firm’s one-of-a-kind computer chips.
“Specifically, Google uses the company’s chips in its Google Glass devices.”
Yes, Google Glass was an early “beta” product flop, so far — but it’s not going away… at least not yet, Google is still working on the next iteration, widely expected to be an “Enterprise” version more specifically tailored to work environments. Hololens, if that reference confused you, is the Microsoft “Augmented Reality” goggle device that’s sort of a cross between Google Glass and immersive virtual reality — it’s expected to allow you to navitate 3D imagery while still being able to see the outside world, a bit like a fancy fighter pilot’s visor. That’s a different market, with quite different hardware and software, than the “Virtual Reality” immersive market with devices like the Oculus Rift and competitors, but apparently this company is working on chips for both.
Apple did “poach” a Hololens-focused employee from