Synaptics (SYNA, Financial) has been riding the smartphone wave successfully. Considering Samsung, a customer surely helps and Synaptics is also taking a gander at the quick development of the Chinese smartphone business sector to drive development.
It is well realized that the smartphone market has been developing at a brisk pace with the quantity of cell phones on the planet anticipated that will dwarf the worldwide populace before the year's over, while sales of PCs have been falling.
Synaptics was smart enough in managing this standard transformation in processing by moving into the portable figuring space and winning new customers. The organization saw an incline up of all its new designs across numerous customers.
What does the future hold?
The business for the sub-$200 smartphone is projected to increase and is expected to achieve 750 million units from now to 2018. Synaptics is looking to capitalize on this development in sales of smartphones, and BRIC nations would the main impetus behind the expansion of this segment.
The business in China remains a key territory of development for the organization and it is overall positioned in the second level of the business, as it works closely with all major OEMs. Synaptics is also chipping away at technologies for addressing the passage level business sector.
On the tablet front, Synaptics sees a blasting business, with its solutions shipping in Samsung, Sony, Acer and Lenovo. The design win pipeline remains exceptionally strong and the organization is wanting to declare a lot of people new wins based on new flagship designs in the coming months.
Synaptics has also propelled a Clearpad solution for extensive touchscreens, and it expects to see this business segment develop as the PC advertise assuredly witnesses an uptick because of maturing fittings that would require substitution.
Synaptics is resolved to stay overall positioned, keeping in mind the end goal to have the capacity to profit by all opportunities that come in the versatile segment, as well as the more extensive touch-screen market and drive sustainable development going ahead.
Resilient rivals – Atmel and Cypress
The presence of a couple of peers will without a doubt make it troublesome for Synaptics to experience steady development going ahead, yet the organization seems prepared to face them.
Atmel (ATML, Financial) is one of the competitors of Synaptics in the touchscreen business, indulging the portable processing and the touch-empowered PC/note pad segments.
The organization has been depending on success of Windows 8 OS which hasn't been a boiling over success, while Windows RT has also been accounted for to be a disappointment. Windows Surface Pro also hasn't seen great sales numbers and Microsoft has been slashing the cost of the tablet.
Atmel's wins in the PC business sector may lead it to perform better later on. Atmel has seen wins from Lenovo. Lenovo, as we know, is the business pioneer in the record book PC segment right now, and this is an imperative tie-up for Atmel, especially for its maxtouch innovation based offerings.
Cypress Semiconductor (CY, Financial) is an alternate player in the same segment as Synaptics. It is a pioneer in USB controllers, which upgrade integration and performance in an extensive variety of consumer and industrial products.
To recoup from this decline in margins and perform better later on, Cypress as of late published Capsense Express, a capacitive touch-sensing controller, which is streamlined to do away with mechanical buttons in the front board for consumer electronic devices, compact medicinal devices, gaming devices and home computerization systems.
Also, Cypress as of late released an extraordinary failure power gadget, which supports up to ten buttons and drives up to ten Leds with completely configurable LED effects and is relied upon to profit the organization later on.
Administration expects that these new products will help the organization perform well later on and that it had achieved bottom in the previous quarter. These products may also pose a danger to Synaptics' business as well and push up rivalry in the space.
Conclusion
Synaptics may yield great returns later on, essentially because of the way that it is attempting to make the most out of the smartphone blast. Quick development of the monetary allowance smartphone showcase in the developing markets and the presence of a real customer such as Samsung are strengths of the organization. The great part is that investors won't be paying excessively for it as it is exchanging at 14 times trailing earnings and is profitable, while its two peers discussed here are running in losses.
