Quik Opportunity

Do you want to double your money this year? Do you like to gamble? If yes, then keep on reading, I have an interesting call for you. We live in a world full of gadgets. Smartphones, iPods, laptops, game consoles, PDAs... what do they have in common? They are portable. What does that mean? Well... at least they have to run on batteries. And what do we want from them? More features of course. Remember the original iPod? Black and white screen and 5 hours battery live. Look at the current iPod: color screen and 20 hours battery live. And it plays videos. That means it's processor must be more powerful... so more power - hungry of course. The trend seems to defy the laws of physics - we keep on getting more features and more computing power with less power consumption. At least this is what we want the trend to be. But doing that is not easy. And if somebody finds a breakthrough way to continue that trend, they are going to be rewarded.

Look at the first iPod again. Once it was released in 2001, people started speculating about the next "video" version to be released. But Steve Jobs is an extremely smart guy. And he understood the reason iPod has been so successful from the beginning. It was simply delivering what it promised without a trace of frustration. Many tried to outmaneuver the iPod, jumping on the video track. The result? Bigger, heavier, poorly performing devices with amazingly short battery life. The end result? Frustration of course. Is 2006 going to be the year of a true video iPod? In other words, is today's technology ready to deliver an iPod-class satisfaction in a form of a portable video player? The answer is YES. Partly because of a little - known company called QuickLogic (QUIK).

QuickLogic has recently announced its new line of custom programmable chips, called µWatt. µWatt is a high - performance, low - power interface used to connect a mobile processor (like the one that powers iPods) to a mobile disk drive (like the one that stores the media files inside iPods). The uniqueness of µWatt proposition is its high performance and low power consumption. If you look at the chart provided on Quicklogic's web site, you will notice the µWatt chip allows to download a 1GB movie to your iPod in 100 seconds (compared to some 5000 seconds using other interfaces). That translates directly to satisfaction versus frustration, something that parallels iPod's philosophy. And the final result is 50 times longer battery life, something that should meet the bar set up by Steve Jobs.

Now let's compile some other random facts. 1. Apple filed a patent for virtual scroll wheel - something that is needed for a device entirely filled with a screen. 2. The current video iPod is not considered to be THE video iPod (a different design is on its way). 3. During the last conference call QuickLogic mentioned the consumer devices designed around the µWatt chips will ship in volume in Q2/2006. 4. iPod is mentioned on the Quicklogic's web site, yet at the moment we know µWatt is not designed into any existing iPod. 5. Quicklogic has more than 20 design wins for the µWatt hard drive interface.

What comes out of the compilation? The very real chance of µWatt grabbing the entire rapidly expanding niche of high performance, ultra low power disk controllers. Think not only iPods. Think smartphones with hard drives, think video camcorders with drives replacing video tapes, think cameras with build-in hard drives, portable game consoles...
If you believe the story and want to play, QUIK may be the best play for 2006. Its currently at 4 and a change. I am in...

PS. Credits to Paul McWilliams for bringing QUIK to the table, hepcat for the initial video iPod hunch and west for the in-depth analysis of QUIK financial prospects.