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On Semiconductor (ONNN - Analyst Report) recently launched an optical image stabilization (OIS) integrated circuit (IC) – LC898111AXB-MH –for better accuracy and less power consumption in smartphone camera modules.

OIS is an intriguing feature of the smartphone, which stabilizes the recorded image by varying the optical path to the sensor. This technology is implemented in the lens itself and helps to stabilize the image projected on the sensor before the image is converted into digital information.

LC898111AXB-MH will help designers to attain maximum image accuracy, while reducing overall power consumption. The device combines the controller and driver functionality to deal with OIS in the camera modules to give superior picture quality. Also, the device will provide pan and tilt functions, enabling wide area coverage. The output of the IC’s integrated pulse width modulated (PWM) driver lowers power consumption as well as reduces the effect of noise on image quality.

ON Semi realizes the importance of enhanced camera performance and efficient power management and it constantly launches new products in the power management segment. The recently-launched products aims to enhance the performance of smartphones and tablets.

Currently, smartphones are one of the most talked about and hottest-selling electronic gadgets. The popularity behind smartphones are their slimmer and lighter build, efficient camera feature and multi-tasking capabilities such as easy availability of social networking sites -- Facebook (FB - Analyst Report), Twitter (TWTR - Analyst Report), etc. -- viewing videos, and Internet connectivity among others. Hence, the importance of power management in these devices rises as these applications can drain out the power in the devices very easily.

As per market researcher Gartner, in the second quarter of 2013, smartphone sales exceeded feature phone sales for the first time and accounted for 51.8% of the overall mobile phone sales.

As per a report by IDC, smartphones shipments too were at a record high at 258.4 million in the third quarter of 2013. The performance in the third quarter was even better than the preceding quarter in terms of shipments, affirming a continued winning momentum of the smartphone market. The firm expects worldwide smartphone shipments to exceed one billion units in 2013, up 40% year over year. This would mark the first year to record such a huge volume.

Therefore, it is apparent that the smartphones will see very strong growth, which will boost ON Semi’s power management business.

ON Semi has a well-diversified business and an end-market focus that would typically generate relatively steady revenues throughout the year. The company’s third-quarter 2013 earnings of 17 cents exceeded the Zacks Consensus Estimate by a penny. Revenues of $715.4 million were up 3.9% sequentially and at the mid-point of the company’s expected range of $700.0 million–$730.0 million.

ON Semi has a Zacks Rank #3 (Hold). Other stocks that have been performing well and are worth a look include Melco Crown Entertainment Limited (MPEL - Snapshot Report) and Microchip Technology (MCHP - Analyst Report). Both stocks carry a Zacks Rank #1 (Strong Buy).

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