dgl, I was surprised and disappointed at the still-high cost of dgl's. I've written at Y that I thought they were substantially less in direct sales to OEMs. Do you have any ideas as to WHY dgl's are still so expensive? As I've written, if the R&D phase is over and we're into production of the dgls, and if there is higher demand and lower prices, it would reason that the higher profit/market share/branding strategy is for Osram/Nichia to product more dgls at lower prices.....
......So there's a technical reason why they aren't. One theory, postulated by a poster at IV and elsewhere, is that the error rate in dgl manufacturing is outlandishly high, so that Osram needs to produce 10 dgls to just get a single good one.
If we assume for a moment that Osram wanted to product more and sell them at a lower price -- lets just assume this for the hypothetical question -- what is preventing Osram from doing this? What technical or capacity issue?
Perhaps the concept of supply and demand is a field you have never given much thought to. If this is the case I will attempt to offer the following explanation.
The Law of Demand implies that if the price of an item is higher (all other factors being equal), then less people will demand that product.
The law of supply says that if the price is higher then the there is a higher incentive to supply.
In the case of DGL, the supply is obviously lower than demand at our perceived "ideal" price at this current moment in time.
At current ability to supply, then the current price is what it is.
In time however, the "ideal" price zone will come as the gap between production/supply and demand begins to narrow.
If demand is ever increasing and outpaces supply and production increases over (say) the next 12 months then a gap will still exist however the gap will represent a smaller portion of what is available so prices will still drop.
Either way it could be spun that it's a good thing. Ironically, the worst case scenario for Microvision is
Bargain basement prices for DGL as this would indicate low demand and would not spur a ramping of production.
The high price of DGL could be conceived as a "good" thing because it indicates demand and
Stimulates the ramping up of production.
The more suppliers of DGL's there are, then the sooner equilibrium between production/supply and demand/price occurs.
It is only then we will see a truly competitive price for DGL in the market place.
What we know: A website claims 60,000 per month from one supplier.
Prices below $80 have been quoted to outsiders (i.e.YMB members)
We know of at least two "reputable" suppliers.
Why did AT use the word "reputable”?
Perhaps not all DGL are to a desirable standard so by inference they are not from a "reputable" source.
The following is a very old document now but as they say a picture says 1000 words.
The picture above indicates that not all DGL's are created equal, so by inference, it is unlikely all DGL suppliers
will be selling at the exact same price. Again, the supply and demand rules also apply across the range of DGL's that are or will become available. High price and low quality are likely not to make the grade, where low price and high quality will do very well to state the extremes.
All I can do is repeat what others have said. Relax. The market for DGL's is following a very predictable pattern.
I am much more curious now on the progress of the ASIC than DGL price and supply.
What is important now is how well AT and our new CFO to hold things together until all the stars have finished their alignment. Then Gd willing, we will see a raft of mature professional products with PicoP inside enter the market where once again the supply and demand rule will dictate consumer prices and early adopters will pay the premium.
In respond to the DGLs, I will put my money on Alex statement at the CC. He said the OEMs see a roadmap of high yield, low cost from several DGL suppliers. So MicroVision recently signed with Global 100 giant and is in heated negotiations with several more which they expect to close this year.
So what is the roadmap on DGLs that OEMs see? Alex stated they expect product revenue in 2014. If OEMs are signing agreements with MicroVision now and not years ago, it may be that DGLs to their specs will follow soon. (6-18 months)
Another thing that people may want to consider, MicroVision just signed this agreement weeks ago and we hear more similar Wins may follow. MicroVision is going after the elite 5 in selected sectors. I think DGL companies have sat down with the Majors involved and talked volume and price as they know many of the Global 100 companies will pound out a lot of DGLs. Alex stated the OEMs involved know the roadmap is high volume and low cost, he also state they expect 2014 product revenue.
This agreement obviously is part of the overall design win process as we help our new customer with product development efforts, we expect to continue the commercial negotiations on supply and licensing terms. As many of you are aware of the green laser supply issue that hindered us in the past has been greatly alleviated in the second half of last year after we launch first product with Pioneer. And today global OEMs see a path to high volume, low-cost green laser solution from several reputable sources.