Needham: Aptina, Toshiba, Samsung Take Market Share from Omnivision

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Forbes, Street Insider: Needham & Company analyst Rajvindra Gill writes that his checks find that Omnivision has lost "a considerable share" of the non-Apple market to Samsung, Toshiba and Aptina. The analyst says that Omnivision has two long-term challenges:

  • Gross margin compression from increasing pricing pressure.
  • Accelerating competition in the 8 MP non-Apple smartphone market.

As for gross margins, Gill writes that he cut his FY 2012 estimate to 28.4% from 30.1%, with FY 2013 now estimated at 26.6%, down from 30.4%. The analyst notes that in the current quarter he expects OmniVision to take an inventory charge due to "poor yields" and excess wafers at TSMC.

The analyst writes: "While OVTI initially had the technological lead in backside illumination (BSI) for over two years, we believe that gap has narrowed significantly due to OVTI’s internal design/production issues (i.e. 8830 sensor) and competitors catching up."
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