InvenSense (INVN, Financial) is seeing a good growth momentum in its key markets and impressed everyone with strong results. It showed strong improvement in revenue on the back of its technology and product execution, along with impressive customer support. It is now more confident of achieving better results in the future. It is making advances to expand its design win pipeline in all of its targeted product segments. Management is also pleased with the balance sheet and cash flow.
Strong product demand
InvenSense is seeing robust demand for its second and third generation devices. In order to meet the growing demand, the company is leveraging its investments in the second generation 6-axis product family. It is working closely with almost 10 top mobile companies in the market. Its new offering of MotionTracking SoCs is under trial, and InvenSense is working closely to qualify this at OEM customers.
In the coming quarters, InvenSense is expecting better customer engagement across its robust portfolio of products. It is already seeing good traction for its third generation 6-Axis MotionTracking SoC. The most attractive thing about it is the latest ultra-low power SoC platform. This is expected to attract potential customers, which will ramp up its sales, leading to better a contribution to its top line.
An increasing end market
InvenSense is also seeing opportunities for additional content in devices due to a rise in gyroscope attach rates and new sensor applications. The transitional efforts by it in the past to shift the motion sensor market for high-end mobile devices are delivering results. In addition, it is also seeing significant content growth opportunities with seven and nine-axis motion sensors and audio sensors.
Moving ahead, as the camera quality among high-end smartphones has become a key differentiation point, InvenSense is will see good opportunities. The ecosystem for OIS systems and module supply is expected to help InvenSense achieve a leadership position in the market. As a result, InvenSense is enhancing its hardware and software capabilities for its 6-Axis and OIS architecture. It is also seeing good growth opportunities for it which will drive the gyro rates attached in the new smartphones.
Moreover, InvenSense is also excited about the opportunities that it is seeing in the software content business. The company is strategically moving to hold a piece of this pie. In this regard it is making significant investments in its own sensor algorithms and software. To enhance this offering and to strengthen its position in the market in this business, InvenSense has also acquired Movea in the past and seeing good synergies from it.
Conclusion
Several other acquisitions in the past have positioned it as a leading supplier of sensor system solutions. In addition, the company has also brought in a leading edge sensor assisted navigation which is seeing good traction and the company is shipping it to the leading smartphones. The main feature that is attracting the customers is its accurate navigation system. Also, the wearable market is booming and it another growth area where it is seeing numerous design wins across a wide variety of products. This is also expected to be a key growth market for InvenSense.
Thus, InvenSense is expected to see growth across a number of markets, making it a smart long-term investment.
