One of the first questions people usually ask with every new smartphone release is: "How did they improve the camera?"
Cameras first appeared in a mobile phone in 2002. The Nokia 7650 camera could take photos that were 176 x 208 pixels in size – or 36,608 pixels total. That's tiny and blurry compared with the smartphone cameras we have today...
Since the old Nokia, we are up to 12 million pixels of resolution, and you can easily see the difference.
The iPhone XR, released last year, sports a dual 12-megapixel camera – the images are sharp and the colors are brilliant. The photos below show just how far the phone camera has come:
The release of the newest slate of iPhones was no different...
One of the most notable changes to the iPhone 11 was the camera. Now, users can take advantage of a wide-angle lens to shoot landscapes, a "telephoto" lens to zoom in without losing clarity, and a "low-light" feature to make pictures look brighter.
What makes the iPhone's photos so impressive is how small and bright the "pixels" are...
A pixel is a short way of saying "picture element." It's the smallest part of a 20-million-piece puzzle: the rainbow of colors that make up a digital image like a web page, a photograph, or a single frame of a movie.
The fewer the pixels, the lower the resolution – so the grainier and more disjointed the image appears. The more pixels, the higher the resolution – so the smoother and clearer the image appears.
With camera performance taking center stage on smartphones, state-of-the-art technology is as important as ever. Today's company is one of the leaders in upgrading smartphone cameras...
We're talking about STMicroelectronics (NYSE: STM).
Among other specialties, STMicro produces imaging and photonics technology for the traditional and high-end camera markets. Its components enable image stabilization and recognition, autofocus, and depth-of-field features.
Some of STMicro's customers are Cisco, Bosch, and Chinese mobile-phone giant Huawei Technologies.
STMicro isn't the largest company in this space, but it's gotten the attention of two of the largest smartphone manufacturers...
When Apple built its facial recognition system for the iPhone X, it chose to go with STMicro components. Samsung chose STMicro components for the Galaxy S9. And Wall Street analysts report that the recently released iPhone 11 has even more components from STMicro.
For the iPhone 11, STMicro will be supplying a higher-value face ID chip, analysts at Liberum said. This will expand the facial-recognition abilities of the smartphone. Now, the iPhone can recognize faces on an angle, instead of just straight on.
STMicro will also reportedly support the new iPhone's wireless-charging functions.
Of course, while its smartphone business is exciting, it's not all STMicro does.
You can also find its technology in Internet of Things ("IoT") devices like smart pressure sensors, medical diagnostic equipment, and microcontrollers used on assembly lines.
More than half of the company's sales come from the automotive and industrial manufacturing markets. This part of STMicro's business focuses on the "Fourth Industrial Revolution" in artificial intelligence.
In this division, driver-assisted cars, smart factories, and smart robots are responsible for the bulk of its sales. Its chips help self-driving cars detect objects around them, re-route the vehicle around obstructions, and display them to drivers.
These are sectors that are growing rapidly and could disrupt the way businesses around the world operate.
STMicro is in high-growth sectors, and its revenues are growing just as quickly...
Last year, STMicro's sales grew by 16% to $9.7 billion. And it continues to grow earnings and free cash flow ("FCF"), too. In 2018, it produced record FCF of $582 million, about 6% of sales.
Regular readers know FCF is the one metric we value most...
It's simply a measure of a company's cash profits minus capital expenditures – or "capex." And it's usually what allows great companies to reward shareholders through share buybacks and dividends.
Even though STMicro is still growing rapidly, it still looks out for its shareholders. Last year, the company paid out $216 million in dividends. And it bought back $62 million worth of its shares.
STMicro's shares sold off at the end of last year, along with the broader market. But they have rebounded strongly this year...
Since bottoming in January, shares of STMicro have soared about 60%. And they recently hit a new 52-week high.
STMicro has about a 4% share of the smartphone market today. That's about 160 million units. As smartphone manufacturers continue to upgrade their camera technology, they'll likely have to turn to STMicro – providing a long-term tailwind for the company.
Sometimes investing is simple.