Microvision Inc (MVIS)

[lookatmenow]

Is a laser projector a high-end feature in smartphones in 2010?

The mobile phone industry has been buzzing about miniature projection technology for years. Many have given up on the notion as one of those concepts that always seem to be two years away from the market. But recent advances in laser technology may have finally brought the idea to the cusp of commercialization.

Microvision's demo of its new laser projector is one of the hot tickets of the CES week -- the Show stand-alone unit is a neat product -- but the really interesting angle here is the potential of a module embedded in smartphones and laptops. Microvision has slimmed down the gadget to 7 mm. The laser projector does not need to be focused with lenses and can deliver vibrant, strong colors even on a wall a couple of feet away. Power consumption and price may be formidable hurdles, though.

But the recent success of high-end models from Nokia N95 to LG KU990 clearly demonstrates that there is strong demand for luxury phones with cutting-edge photo/video/display technology. Five-megapixel technology and large touch screens will have been adopted by three to five leading vendors by the first quarter of 2008; the industry is hungry for new differentiating features.

Camera quality and video capture tech can only be refined so far. Display real estate on the handset is reaching its maximum spread with nonflexible screens, as it now stretches across 80%-95% in cutting-edge models. An embedded miniature projector would open up a new front in the features arms race, and operators might be willing to subsidize these phones heavily because they could persuade consumers to download a lot more content. Much boils down to whether power consumption and price are finally decent.

There's plenty to watch for at the CES this year; I'll be posting throughout next week on the trends to keep an eye on for 2008.