Good macro point..........but cell phones coming back.
Selling below cost........please site some examples where companies are going into production on product specific orders for customers wherein a company like OVTI sells to an OEM the ordered product for less than cost.
The industry doesn't work that way. You take an order that has profit worked in. This is why OVTI continues to produce quarterly profits.
OVTI will prosper should a price war evolve. They are one of the lowest cost producers in the industry........
many times ovti has written down inventory to zero and then ended up selling it which creates profit and expands margin in the then reported quarter. in essence they throw old product away for less than they paid (in terms of both direct and indirect costs) to produce it.
in past cc's, analysts usually seek clarification of this. i recall once when the reported quarter's increase in margin was 50% due to selling written down inventory and the other half (or a good part of it) from selling nonpackaged (bare die) product. i recall this since i laughed that ovti use to brag about their investment in CSP and then ended up selling bare die product.