I remembered Dave Bell emphasizing on the Q3'12 ISIL Top10 growth drivers during the announcement of Q2'12 financial result. Q2'12 was a poor quarter which ended with 163 million revenue. A drop of ~22% y-on-y as compared to 209 million revenue on Q2'11.
Lets have a closer look on the ISIL Top10 growth drivers. There are as follows:
1) Securities surveillance.
3) PC power management.
4) Optical sensor.
5) Hand held devices.
6) Pico projectors.
7) Active cables.
9) Cloud infrastructure.
10) Dense power conversion.
The securities surveillance, automotive, Optical sensor & Pico projectors are heavily relied on the Analog to Digital converter (ADC) technologied in order to facilitate display, storage and transport video content. These are Techwell designed & application products. However, ISIL lose a major customer on optical sensor.
As Zilker, D2 Audio, Kenet & Xicor, these acquired companies were contributing mixed signal power conversion technologies. ISIL could make full used of their technologies to further enhance its mixed signal conversion sector.
Quellen's expertise in driving high speed signal over long distance. ISIL can focus to develop on active cabling technology.
The main concern here is most of these products are low volume, probably high profit margin. Unless, ISIL has a breakthrough in handheld devices and capture either Apple I-Phone & Samsung Galaxy tablets, otherwise it will be questionable in a growth for this mentioned area.
Looking at the estimated Q3'12 revenue, there was an estimated drop of 18.5% down to 151 million.
No doubt, there was no growth in most of the Top10 drivers as commited. I think most of the investors are scratching their head to search of reasons on the falling edge of ISIL revenue now.
May be they can start to question on the ISIL technology breakthrough & its impact on the revenue!
Dave Bell did talk about the top 10 drivers a lot during the Q2 call but his statement on when they'll make an impact was, "you’re going to start seeing some of these things [top 10 drivers] have a material impact in 2013, hopefully some in the 1st half of 2013, but increasingly as you go through 2013."
What one needs to scratch their head about is the collapse of optical sensor sales even if the loss is just one customer. ISIL must have lost at least $10 million in sales of these sensors since Q4 of '11. In the Q4 call, it wa said that the rapid growth of sensor sales was aided from two competitors being hurt by the Thailand flooding. Did the recovery of these competitors from the flooding cause the loss of that sensor customer?
Most ISIL investors are not technologists...they are MBA's. Eventually, after it is way too late, they will figure out that Bell is incapable of turning ISIL around. I really don't think that Bell thinks that all 10 of his so-called growth drivers will make it big. He was probably hoping for at least a few. He might get ONE.