Silicon Image Needs Some Help From Its Friends
Silicon Image (NAS: SIMG) needs some help from its friends.
The video signal expert expects mobile sales to become its largest-revenue business next quarter. Driven by sales of HDMI and MHL transport chips and technology licenses, that segment is where the money is at. But for the new, super-detailed MHL technology to stand a chance at becoming an industry standard as Silicon Image hopes, the company needs some marketing assistance.
Smartphones and tablets with MHL ports have started trickling in from HTC and Samsung. Toshiba and others have even introduced some TV sets that are compatible with the new technology, and you can buy HDMI-to-MHL adapters if your television doesn't roll that way yet. The future holds even higher-resolution high-def TV standards, and MHL can make it all happen.
It's just not good enough to rely on Sony (NYS: SNE) and Toshiba to drive the new standard's direct consumer sales. According to Silicon Image CEO Camillo Martino, it's not even good enough to have retail giants such as Best Buy (NYS: BBY) throwing their weight behind it. No, MHL needs a focused push from cellphone carriers Verizon (NYS: VZ) , Sprint-Nextel (NYS: S) , and AT&T (NYS: T) in order to make it happen.
Use MHL as a selling point, presented front and center on e-tailing sites and in physical carrier stores. Only then can MHL reach its full potential. OK, I'll buy that for a dollar.
That's a long-term project, however. In the meantime, Silicon Image just reported roughly flat sales year over year due to weakness in the consumer electronics market. Non-GAAP earnings increased to $0.06 per share. The company sure could use some help from its wireless friends to kick-start its stalled growth engines.
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