08 Nov Can eMAGIN Capitalize on the Burgeoning AR/VR Opportunities?
eMAGIN corporation, (NYSEMKT: EMAN), a leading designer and manufacturer of OLED microdisplays for high-resolution AR/VR and other near-eye imaging products announced a new prototype for a a widescreen ultra-extended graphics array (WUXGA) (1920×1200 pixels) that leverages the Company’s Direct Patterning Display (dPd™). eMagin’s proprietary technology can achieve 10,000 candela per square meter (cd/m2) of maximum luminance delivering the world’s brightest high-resolution, full-color OLED microdisplay as per a company statement.
Andrew G. Sculley, CEO of eMagin commented,
“This is a historic moment for eMagin and the industry and is our greatest achievement to date in advancing our proprietary dPd technology.”
The Company’s new full-color OLED micro display prototype, with high-brightness, high-contrast and high-resolution, which are an important component in AR/VR, will be a great asset to industries such as consumer, military, medical and industrial. The technology lends itself to numerous resolutions and form factors of OLED microdisplay, and can offer advantages such as more efficient power consumption and reduced image burn-in under identical driving conditions.
eMagin’s now targeting milestones such as addition of tandem OLED structures and other changes that can prove transformational for AR/VR applications.
eMAGIN corporation (NYSEMKT: EMAN)
Market Cap: $192.14M; Current Share Price: 2.65 USD
Data by YCharts
Strengths
The Company is a leading producer of active-matrix Organic LED (AM-OLED) Microdisplays on Silicon, which offer great improvement over LCD technologies. The eMAGIN’s products feature high brightness, low power and lightweight solutions across various temperature ranges. These products address the needs of commercial, industrial, military and medical markets.
eMAGIN’s patented direct patterning technology (dPdTM) delivers ultrahigh brightness in color and is poised to capitalize on the rising opportunities in numerous industries for high-brightness AR/VR solutions. Some of the advantages that the technology offers are lower power consumption, brightest OLED display, a compact form factor, superior performance and competitive cost. While conventional OLED displays use white OLED displays with color filters that absorb 80% of the light, resulting in limited brightness, eMAGIN’s technology enables direct emission of red, green and blue light leading to higher brightness, higher efficiency and lower power consumption.
The Company is the only U.S manufacturer of OLED microdisplays and has received government funding to the tune of $39.1 million for equipment procurement and other necessary improvements in productivity.
The Company has established a stronghold in the military and aviation market, which it intends to leverage to build a customer base in the commercial, medical and consumer electronics market. In addition, the company is aiming to build reliable partnerships for expanding its manufacturing capability in terms of capacity and production yields.
eMagin is a sole-source supplier of OLED displays for the U.S. Army’s Enhanced Night Vision Goggle – Binocular (ENVG-B) program. In December 2019, the Company had received a $4.3 million follow-on order from the Prime Contractor for the U.S. Army, with deliveries through 2021. This could be a multi-year opportunity as the U.S military plans to acquire 108,000 systems.
Weakness
The Company has established itself in the defence and aviation sector, however it still does not have a significant AR/VR licensing deal or manufacturing agreement in place. eMAGIN has been talking with players in the display industry for an agreement that will help increase its manufacturing capacity, which is a major constraint for the company as currently the Company is not in a position to deliver mass volumes.
Opportunity
The Global OLED micro display market was estimated to be worth $123.94 million in 2020 and is poised to reach $518.38 million by 2026, growing at a CAGR of 27.69% according to a report by Mordor Intelligence. The growth in the market will be driven by growing demand for smartphones, television and virtual reality products in retail, automotive, military and defence industries.
The Augmented Reality Market that was estimated to be worth USD 3.33 billion in 2015 is projected to grow at a CAGR of 85.2% from 2016 to 2021 to reach USD 133.78 billion by 2021, according to a report by Zion Market Research. Similarly, the virtual reality market is projected to reach $ 20.9 billion by 2025, growing at a CAGR of 27.9% from $ 6.1 billion in 2020 according to a report by markets and markets.
The growth will primarily be driven by the gaming, entertainment and retail industries that seek innovative and unique promotional media to differentiate themselves from the competition.
Image Source: Freepik
In addition, factors such as demand for digitally enhanced reality for game development, increasing usage of smartphones, need for redefining customer engagement; manufacturing support and quality assurance are some of the areas that have contributed to AR being adapted globally. The increased demand from Aerospace and defense organizations worldwide, coupled with the blooming e-commerce sector, will further propel the growth in the AR market.
Major organizations all over the world are now adopting AR-based strategies to promote their brands and enhance customer engagement. Pokemon Go is one of the best examples of how AR can create engaging content. Ikea now allows its customers to scan a room with the help of its IKEA PLACE app, and see how its furniture looks in the user’s surroundings. Pepsi MAX’s live for now campaign transformed a bus stop into an AR environment, by live streaming information from the road ahead, and also creating unique scenarios such as alien abduction to wild tiger chases to grab eyeballs.
The construction industry too is benefitting from the application of augmented reality in numerous areas such as simplifying complex model designs, sales and marketing demonstrations, training, planning and real-time monitoring of critical processes to name a few.
On the other hand, the Global Military Communications market is expected to reach USD 62.96 billion, growing at a CAGR of 6.18 percent, from USD 39.86 billion in 2018 according to a report by Fortune Business Insights. Communication equipment plays a vital role in military operations and is used for relaying or decoding critical and confidential information. The systems consist of software as well as hardware components such as transmitters, antenna, receivers that can convey information in the form of images, speech or signals.
Threats
Technology is a constantly evolving field. A breakthrough innovation of today can easily become outdated in a matter of years. To sustain in such a highly competitive environment, companies need to constantly be one step ahead of the competitors in research and development and delivering highly differentiated experiences for their customers.
There is a possibility of a new and better technology emerging in the market, which may render the Company’s technology obsolete. Customers may opt to go with its competitors for their business needs and the Company may fail to acquire new customers or not be able to achieve its targeted growth.
The Company faces competition from the likes of KOPIN, ORION Display World, CDT (Cambridge Display Technology) and MicroVision to name a few.
Key Takeaways
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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References
https://www.mordorintelligence.com/industry-reports/oled-microdisplay-market
https://www.marketsandmarkets.com/Market-Reports/reality-applications-market-458.html
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