Wednesday, October 23, 2013

How InvenSense has become a major supplier of microchips for smartphones on Android - Forbes Russia


Microchips are on 70% of phones Android c motion sensors and 80% plates with them. As the company was able to achieve such impressive results?

Established 10 years ago, the company InvenSense is rarely in the spotlight. But on Sept. 20, when the iPhone 5s from Apple hit the store shelves, market players have decided that the manufacturer of components from San Jose (California), and finally hit the jackpot, beating larger rival STMicroelectronics. A few weeks before the start of sales of the new smartphone, waiting for the long-awaited debut, investors have inflated the company’s share price by 15%.

InvenSense operates in one segment of the semiconductor market. This is the so-called micro-electromechanical systems (MEMS) – various types of sensors with moving parts so small that they can be seen only under a microscope. These components suggest your smartphone or tablet: whether it is tilted, upside down, shake it be, turn to the left or to the right, and at what rate. The volume of this market is estimated at $ 9 billion

However, when tehnoblogery dismantled last iPhone, to describe his entrails, all were disappointed. Inside was a gyro from STMicro, compass, manufactured by Asahi Casa Microdevices and accelerometer from Bosch Sensortec. InvenSense shares the next day fell 3%. No big deal: paper played a drop in less than a week, demonstrating a sense of investors coming in 60% growth since the beginning of the year. Since January, the company has shipped about 120 million components to companies like Samsung, Motorola, BlackBerry, HTC, Acer, LG and Nintendo Wii, providing 70% of their phones Android c motion sensors and 80% of the tablets with them. Over the past 12 months, the company reported net income of $ 54 million on sales of $ 208 million

Thus ended another tumultuous (but hardly noticeable to the general public) a week in the life of InvenSense. Hardly anyone paid attention to what happened last October, corporate earthquake, when the board of directors fired founder and CEO Steve Nasiri and replaced him with industry veteran Behrooz Abdi. It was a classic entrepreneurial coup, when getting rid of a visionary, the guy who did everything himself, and invite professional manager, able to scale the company. Something like this happened many years ago, and at Apple, when the board of directors of the company has opted for John Sculley, firing Steve Jobs.

«Some members of the Board of Directors would like to influence the daily management of the company – says 58-year-Nasiri, who now consults startups. – I was against it. ” I replaced it 51-year-old Abdi, who previously worked at NetLogic Microsystems, RMI Corp., A different vision of the situation. “As we grow, it becomes much more difficult – he says. – There was an understanding that you have to climb to new heights in management. ” Abdi consults with nine vice-presidents before making most of their decisions.

long time InvenSense associated only with the name of Nasiri. Iranian-born engineer started the business in 2003, giving it its own $ 500,000. Company featured an innovative manufacturing process of MEMS, which led to the assembly of chips easier, and the quality of the final product better. Competitors in the meantime let the more expensive and larger devices, mainly for cars. “I looked at it and said, Oh, I can do it better, and the price is below $ 5,” – says Nasiri.

He immediately made a bet on the end user by persuading companies Artiman Ventures and Partech International to invest $ 8 million in 2006 Nasiri began supplying gyroscopic sensor image stabilization for digital cameras Sanyo, Minolta, and Fujitsu. Two years later, his sensors have been used in the video game console Nintendo Wii.

Nasiri also attended and for mobile devices. The emergence of the iPhone, which was accelerometer, has opened a new market for MEMS chips, but Nasiri found that the contract with the manufacturers of mobile phones are not so simple. “They did not want to bid on any new features until they will adopt Apple», – he says. The revolution took place in 2010, when the iPhone 4 gyroscope received from STMicro. After that, he was needed by all manufacturers of smart phones, and Nasiri fell orders from manufacturers of devices based on Android.

conducted in 2011 IPO, through which it raised about $ 75 million, helped earn the company has invested in venture funds and staff (if they owned 37% of the company), and also provided a good infusion in the development and sales. If at the time of the IPO InvenSense output control only 10% of the MEMS market, today – almost 40%, says Abdi. Satisfied and consumers. “These devices are great,” – says Andrew Uerkvits, an analyst at Oppenheimer.

What’s next? Extension. “Steve has made production at the kitchen table in the company worth billions of dollars,” – says Joe Siiger, director of development of MEMS and one of the old-timers InvenSense. The rapid development of global smartphone sales should lead to the fact that by 2017, the sensors will account for half of the MEMS chip market volume of $ 12 billion

Last year InvenSense doubled capacity and hired another 42 engineers. The company invests a lot in the software that is installed on miniprotsessory for sensors (they make simple calculations, thereby relieving the main processor phone or tablet). “The sensor should be smart enough to at least the low-level computing and save battery” – says Abdi.

In the near future, sensors will be used in new areas, such as in devices for measuring air pressure and in devices with accelerometers that integrate GPS and internal navigation in pedometer to help keep track of your activity and image stabilizer for cameras smartphones. “The cloud is becoming more intelligent – said Abdi. – It looks like that it will know where you are, what you do and how you do it. ” Pretty easy to understand how sensors can help older people to monitor their health, and will also be used in other areas of health ».

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