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Is Immersion’s Haptic Technology A Cut Above the Rest?

18 Mar Is Immersion’s Haptic Technology A Cut Above the Rest?

Immersion Corporation, (NASDAQ: IMMR) develops touch and motion control technologies for the digital world. The Company has over 15 award-winning designs and products and serves more than 150 licensed customers and 3 billion devices that are using its technology. The technology developed by the Company provides life-like digital touch feedback through a wide array of solutions such as use cases, software development kits, tools and services for device manufacturers, haptic hardware companies, designers, and developers in mobile, automotive, gaming industries.

Immersion Corporation, (NASDAQ: IMMR)

Market Cap: $320.14M; Current Share Price: 10.64 USDChart
Data by YCharts

An Industry with High Growth Potential
The global haptic technology market is projected to reach USD 4.6 billion by 2026, growing at a CAGR of 12.0%, from USD 2.6 billion in 2021 according to a report by Markets and Markets. The growth is driven by rapid technological advancements and increasing adoption by the mobile, gaming and automotive industry. Growing integration of haptic technology into smartphones, tablets and wearable devices such as smartwatches and fitness trackers are propelling the market’s growth and expansion.

The largest market growth will be witnessed in the automotive industry as more and more OEM’s incorporate haptics into infotainment systems and navigation systems such as touchscreen GPS. The industry is witnessing partnerships and agreements between automotive component manufacturers and haptic solution providers, which will drive the growth even further.

Gaming is another industry that is incorporating haptics into controllers and other gaming paraphernalia to deliver life-like experiences.

Leveraging its Cutting-Edge Technology
The Company’s TouchSense technology allows device manufacturers to create a highly differentiated experience for its customers, through a cost-effective and easily integrated solution that can be customized and fine-tuned, to create a high-quality interactive experience.

The Company’s Active Sensing Technology combines motion sensing and smart control technology to redefine customer experience by enabling the creation of button pushes, dial turns, and sliders, allowing device makers to provide an interactive digital display with programmable touch surfaces. The technology can be applied to automotive, mobile and IoT devices.

Immersion offers Engineering Design Services, Reference Design and user experience design services that provide comprehensive knowledge and insight into haptic design effect, determining hardware capabilities, process for system implementation and choosing the right software for optimal performance and experience.

Making Strides in the Automotive Industry
Immersion delivers textured surfaces, touch feedback and kinesthetic that can transform user experience and enhance interior car design through creation of true-to-feel pushes, button, slider, and dial in the car. The Company’s automotive offerings include large screen touch displays, curved displays and dashboard button textures. In addition to providing haptic technology solutions, Immersion also offers Co-development programs with manufacturers to customize haptic system implementation to suit specific user requirements. Furthermore, the Company also offers licensing opportunities that provide access to its portfolio of haptic-enabled automotive touchscreens, touchpads and touch surfaces.

The Company’s Automotive Haptic product development kit helps design and customize touchscreens, touch surfaces, button consoles, steering wheels. Immersion’s haptic hardware supply partners include TDK (OTCPK: TTDKY), Microchip (NASDAQ: MCHP), Boreas Technologies, Continental, Bosch, Panasonic (OTCPK: PCRFY) and Nippon Seiki (7287.T) among others.

Immersion entered into a multi-year license agreement with Faurecia, a premier automotive technology company to grant access to its haptic technologies and solutions enabling Faurecia to develop interactive haptic user interfaces for automotive.

Furthermore, the Company has also signed a multi-year license agreement with Woory Industrial Co. Ltd., a Korean automotive component supplier that will use Immersion’s haptic technologies for automotive touchscreens to be sold to OEM’s.

A Solid Game Plan
The Company’s HD haptic and kinesthetic force feedback technologies leverage the TouchSense Force to add realistic textures, materials, and weapon recoil and true touch sensations such pushing, pulling, grasping, and pulsing that can be incorporated into game controllers, headsets, mice, mobile devices, and gaming chairs. Furthermore, Immersion also offers Co-development programs and technology licenses that offer a completely transformative gaming experience.

Immersion recently announced a collaboration with StrikerVR, a developer of force feedback peripherals, to incorporate Immersion’s HD haptic and kinesthetic technologies into StrikerVR’s newest controller that will help deliver novel designs to the VR market. The companies have signed a multi-year license agreement that allows StrikerVR to use Immersion’s advanced haptic technologies for its next peripheral products.

John Griffin, VP of Products and Marketing at Immersion, commented

“New advanced force feedback and high-definition vibrotactile haptic products launched in the market are inspiring the gaming industry to deliver new experiences with touch feedback technology. Gaming experiences today are defined by sight, sound and touch. StrikerVR is thinking ahead and building a product that will excite users with its advanced features. We’re looking forward to working with them to expand the use of touch feedback on their platform and change how people experience haptics.”

The Company has also signed a multi-year licensing agreement with SenseArena, as part of its VR offering for athletes that helps improve reaction time and performance, besides renewing its contract with Abtivan, a game peripheral OEM that produces force feedback steering wheel and related racing and flight simulator equipment.

Robust Intellectual Rights Portfolio
The Company has an extensive intellectual property rights portfolio that reflects its commitment to develop path-breaking haptic technologies. Immersion has over 740 U.S patents and 981 international patents as of 31 December 2020.

Fourth Quarter 2020 Financial Results
In March 2021, the Company announced its Q4, 2020 and reported total revenues of $10.9 million, compared to $11.5 million in Q4,2019, out of which royalty and license revenues contributed $10.9 million as against $11.4 million during the same quarter of 2019. Revenues for the year 2020 stood at $30.5 million as against $36.0 million in 2019, of which royalty and license revenues were $30.2 million, compared to $35.6 million in 2019. Immersion had cash and cash equivalents of $59.5 million at the end of December 31, 2020.

Jared Smith, Interim Chief Executive Officer at Immersion, commented,

“We had a very strong fourth quarter, growing our top-line by over 40% compared to the third quarter and maintained control over our operating expenses. “The net result was a solid, profitable quarter. We did this while continuing to innovate our next-generation haptic technology and achieving several exciting customer wins. All of this positions us well as we enter 2021 with momentum to deliver double-digit top-line and profitability growth year-over-year.”

Image Source: Company

Key Takeaways

  • Immersion powers the DualSense controllers for Sony’s PlayStation 5 and has a licensing deal that involves payment of royalty for each controller sold. The deal provides the Company a foothold in the gaming controller market that could also lead to large scale adoption by other gaming equipment manufacturers keen on leveraging the Company’s haptic technology to create a cutting-edge interactive experience. Immersion also has a six-year contract with Nintendo as well.
  • The Company intends to make inroads into the automotive sector and is focused on landing Tier-1 licenses, while also expanding its business with existing customers. The Company has made multiple agreements with automotive OEMs in 2021 so far, which demonstrate that its strategy is paying off.
  • Haptic Technology lends itself to a wide array of applications right from automotive to robotics and provides ample opportunities for growth and expansion. However, the industry is extremely competitive and is dominated by major players such as TDK, Microchip Technology and Texas Instruments to name a few. The Company will have to stay one step ahead of the competition in order to make inroads into the market and create a niche for itself.
  • 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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