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Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's Q3 Report 2018 Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today, Friday, the 26th of October 2018. I would now like to hand the conference over to your first speaker today, Stefan Pettersson. Thank you, and please go ahead, sir.
Good morning, and welcome to Fingerprint Cards earnings call following the release of our third quarter results this morning. My name is Stefan Pettersson, and I'll be the moderator today. We'll begin today's call with a presentation on the report by our CEO, Christian Fredrikson, and thereafter by our CFO, Per Sundqvist. Following this, we'll have a Q&A session. And if you're following the conference call on the web, you can post questions throughout this call. And for those of you participating on the phone, instructions on how to ask questions will be given by the operator before we get into the session. And with that then, I hand over to our CEO, Christian Fredrikson.
Yes, thank you, and good morning, everyone, and welcome. Before we get into the call, let me welcome our new CFO, Per Sundqvist, who joined us on October 1. I'll hand over to Per in a while to give you a more detailed overview of the financials. But let me first go through the main highlights from the quarter and give you a business update as usual. I am happy to report that the positive sales trend we saw in the second quarter continued into the third one. And we grew our revenues sequentially by 11%.Compared to the third quarter year-over-year, sales were down by 49%, mainly due to declining average selling price, as we have said quite a few times. If we look at the gross margin, which was 27%, the drop versus the same quarter last year from 33% is mainly due to lower volumes and a change in the product mix as well as lower ASP. However, we, of course, grew our gross margin from the second quarter quite substantially.Our cost-reduction program is progressing as planned. We recorded an operating profit of SEK 7 million and operating cash flow amounted to SEK 202 million in the quarter. The strong cash flow is due to improved underlying earnings, reduced accounts receivable and lower inventory.Next slide, please. Looking at some market highlights from the quarter. 12 smartphones equipped with our sensors were launched. Let me also mention that on October 9, Google announced 3 new devices with fingerprint sensors from us, the Pixel Slate and the smartphones Pixel 3 and Pixel 3 XL. We are, of course, proud to be providing world-class biometrics for these devices as well.During the quarter, we launched our first capacitive fingerprint sensor, which is compliant with the automotive industry's rigorous standards. I believe that this launch is an important step in bringing the benefits of biometric solutions to the automotive industry as automakers are clearly keen to integrate biometric-based driver authentication into vehicles.The first automotive product development project integrating the automotive sensor are expected to begin during 2019. As you know, we also have an exclusive partnership agreement with Gentex to bring iris scanning technology to the automotive industry.We are seeing the biometric card market firming up. Let me get back to this shortly. But let me mention that we could announce in Q3, we are supporting our partner, Zwipe, in launching biometric payment cards with banks and loyalty programs in China.Next slide, please. We have kept our leadership position in biometrics for the mobile industry. I am very pleased of this. And one of our most important priorities is to continue defending and now leveraging this position of strength as the mobile industry continues to evolve.The value of the capacitive fingerprint sensor market for smartphone continues to decline, but our view is that biometric solutions for smartphones will be an attractive growth market in the coming years, with new solutions like the in-display and touchless sensors more than offsetting the decline in capacitive solutions.First, we will defend our strong position in capacitive sensors for mobile, as we have clearly done today, by continuing to focus on driving cost efficiency to meet the ASP decline. I am pleased to report that we recently received the first volume orders for our fourth-generation capacitive sensors, which will be a very important part of our capacitive sensor portfolio going forward.The biometric performance of these new sensor is high despite its clearly smaller size, and all the feedback received from our OEM partners have been very positive. I will dare to say that this is clearly the best capacitive sensor ever made by quality, cost efficiency, performance and security.It will be a great product for us. The first commercial in-display sensors were introduced this year although volumes are still modest. Several OEMs are planning to integrate in-display sensors during the next year. And we believe that this technology will have significant inroads in the mobile industry during the next couple of years. We intend to enter this market in 2019 with our optical in-display solution. And we are continuing to develop also our ultrasonic in-display solution at the same time, although it is more technically complex as it is a full screen.In parallel, we continue to position the company for growth in new areas, not least in biometric smart cards. It seems likely that the major payment card brands will certify contactless cards during the first half of 2019. This is an important prerequisite for card issuers to be able to plan and budget for a broad market introduction. Biometrics for embedded application is also growing, and we are on track in our plans but in a very fragmented market, as we have said before.In the near term, the most attractive area for us is in the access systems, for example, door locks. Longer term, we see growth in many other areas, not least in the automotive industry, both for our iris recognition technology and the fingerprint sensors.Next slide, please. I believe that the segment offering the greatest potential in the coming years is biometric smart cards. The potential market is large, with some 4 billion and above cards, smart cards produced every year. There are a number of key success factors for a biometric payment card. First, it needs to support battery-less and contactless applications. This means that the card needs to perform well on very low power. It also needs to be compliant with existing card production processes and, of course, the consumer expects and demands a great experience, meaning reliability, speed and ease of use. It just has to work every time. Also, card producers expect the complete biometric solutions, spanning from hardware, software, algorithms, packaging, tools and support.Our biometrics smart card offering meets all these requirements. We have solid experience in volume production and proven track record from the mobile phone industry with hundreds of millions of sensors delivered to date. Our T-Shape product is the most power-efficient module on the market, and it is performing very well with contactless payment terminals. In May of this year, we announced the world's first orders for biometric fingerprint sensor for payment cards. Let me repeat, this was the world's first orders from 2 major card producers.Fingerprint has well-established partnerships with several of the major card producers, such as IDEMIA and Gemalto via Zwipe. We're also partnering with NXP Semiconductor late last year.Next slide, please. And if you look at the market trials to date, I think this confirms our very strong position in this emerging market for biometrics. In fact, Fingerprint is part of all contactless trials announced to date globally. The latest one was announced just last week in France, where Société Générale is the first bank to market the biometric card in France. This particular card is produced by IDEMIA, incorporating our T-Shape sensor.I should also point out that our solutions work equally well, of course, in a contact-only scenario. But contactless is clearly the most interesting application for biometric in the smart cards. It is clearly the thing and the performance that the consumers want and expect.Next slide, please. As you know, we have talked about this application for many years. The idea of replacing and keying pins with a fingerprint sensor in smart cards has been around for a very long time and was actually, of course, the foundation of this company, hence, our name. So where are we in the rollout of biometric cards?The last few years, the focus has been on optimizing the sensor system and on integrating and testing the sensing module on the card. And in 2017, we started to see several market tests, initially contact-only, but in the last year, we have participated in several dual interface tests all over the world. I strongly believe that the smart card's being developed into the next mass market for biometric solutions in the coming years.However, before commercial launches can take place, the payment scheme certification processes need to be completed. We have already seen one certification of a contact-based biometric smart card, and we believe, and it seems likely, that the major payment card brands will certify contactless cards during the first half of 2019. This will allow the industry to move to the next step, planning and budgeting for broader commercial launch, which we expect to materialize in 2020 and onwards.Next slide, please. So let me briefly summarize. We saw the positive revenue trend continue with a sequential increase of 11%. We report strong cash flow and are showing a net profit in the quarter.We have had a challenging few quarters, but I am a strong believer that biometrics is a growth industry. We have done well in the battle, and we are the market leader in mobile capacity.And even if the mobile capacity sensors for smartphones continues to decrease in value, we take a positive view of the opportunities also in mobile. We continue to provide cost efficiency capacitive sensors with a world-leading product, and we intend now to enter the growing market for in-display sensors in 2019 with our optical solution.And finally, we are well positioned to benefit from growth in new segments, not least in biometric smart cards but also in embedded. With that, I would like to hand over to our CFO, Per Sundqvist. Go ahead.
Thank you, Christian, and good morning, everyone. Let me now take you through the financial results for our third quarter. As Christian pointed out, our revenue increased sequentially by 11% to SEK 431 million. If you compare that to the same quarter last year, our revenues decreased by 49%, mainly due to the decrease in the average selling price.Compared to the Q3 last year, our gross margin decreased by 6 percentage points to 27%. This is mainly because of lower volumes and the decrease in the average selling price. If you compare that to the last quarter, we see an improvement, however. In Q2, we had a significant impact from the write-downs that we recorded, but we also saw an improvement in the underlying gross margin. This is partly due to an improved product mix as well as a more favorable customer mix than in Q2. In Q3, we sold significantly more of the FPC1291, our new high-end sensor for flagship smartphones, which made good contribution to gross profits.We also reported an operating profit of SEK 7 million compared to SEK 52.4 million in the same period last year. This decrease versus last year is mainly a consequence of the drop in the average selling price and the lower volumes.Next slide, please. We continue to focus on lowering our OpEx, and the cost-reduction program is progressing according to plan. If we exclude other operating income and expenses, our operating expenses for the third quarter totaled to SEK 101.5 million, which should be compared to the SEK 176.3 million we had for the same quarter last year and the SEK 155.1 million last quarter. Our development cost is SEK 14 million and were capitalized during the third quarter, which corresponds to 25% of the total development cost versus almost 40% for the same quarter last year.In relation to revenues, our operating expenses represented some 24% compared to 21% for the same quarter last year. We expect this ratio to come down as we continue to execute on our cost savings program, which is in progress according to plan. And during the quarter, we reduced the workforce by an additional 97 positions.Next slide, please. If you then turn -- take a look at the balance sheet, it's positive that our working capital, excluding cash and tax items, continue to decrease and was SEK 71 million at the end of the quarter, which should be compared to almost SEK 667 million in the third quarter last year. The decrease in working capital is mainly a result of a write-down of the inventory and the reduction in the revenue compared to the same period last year.Next slide, please. Our cash flow from operating activities was a positive SEK 202 million in the third quarter compared to SEK 175 million in Q3 last year. This strong cash flow is due to improved earnings, a decrease in receivables and also a decrease in inventory outside the actual write-down that was done before.Cash flow from financing activities was a negative SEK 162 million, and that consisted entirely of the repayment of the acquisition loan of Delta ID. During the third quarter, our cash and cash equivalents increased by SEK 4 million, adding up to a cash balance of almost SEK 742 million. The net cash was SEK 596 million, which should be compared to SEK 530 million in the same period last year.Thank you, everyone. And we are now ready to take your questions.
[Operator Instructions] Your first question comes from the line of Francois Bouvignies.
I have a couple, if I may. The first one is on your gross margin. So in Q2, you saw a significant improvement, like you said in your remarks. And I was just wondering if you can give a bit more granularity of what is really driving this gross margin. And if I understand correctly, it looks like it's a product mix, so you have new products with a cost-efficient solution. Just wanted to confirm that. And how we should think about this gross margin going forward given the launch of your new product, the 1511, that is apparently even more cost-efficient. So should we expect the gross margin to go above 30% going forward?
Yes. Francois, maybe I'll start here. Yes, we have improved. I think it is clearly from the both product mix and also we are -- we have -- by the way, we have not yet transported the new sensor. We have gotten our new orders. So that is starting as we speak. The volume orders have come in for the new sensor, but the impact will be more in the first quarter or at the end of this quarter, if you so may. And I think that the gross margins are now going in the right direction and more reflective, I believe, of where we need to be. And I believe that we, of course, need to be above 30% in our gross margins in the ongoing business. And that's what we, of course, aim for and where we need to be. I think now, they are more reflective of where we are in a position as a company now. It was way too low in the first 2 quarters.
But how do you explain such difference versus Q2 if it's the same kind of product?
Well, there has been a shift, of course. We have gotten -- there has been a shift. I think there is quite a few shifts that has happened, which is driven by the ASP decline as well. So we are -- we have brought the new product versions in, right? So we have a new [ client ]. We have also another product, which came earlier, which we -- have gone into volume now. So in a way, the product mix has shifted. So if you -- if I may, that if you had earlier maybe 8 or 9 different versions, now we are kind of consolidating in the industry from our point of view to maybe 3 versions. And those are good versions for us. Those are more competitive products. They are the latest versions. And the third one will be now 1511 that comes out. So I think that there were many models before, and that was scattering the market. So I think, in a way, what happens is that we will have much less core product in the capacitive, only 3 main ones -- actually, I would say versions of them. So it is better for us and it's better for our customers for us to do stronger volumes with few products. So I think that shift is helping us and making it possible to -- for us to both drive and be part of the ASP decline and make still very competitive products.
And the 1511, in terms of costs, how lower is it versus your current products in terms of percentage?
Well, we haven't given out that, but it is substantially better, of course. And -- but we haven't given out. But obviously, that means in the 10s percentages improvement.
Okay. That's clear. The other question I had is on the outlook for Q4. You saw Q3, you saw control increase, and I'm well aware that you don't guide for the next quarter and I'm not going to push on that. But I just wanted to have your view on the direction of the market in terms of the control performance in Q4 versus Q3. Should we think Q3 as usually your highest still quarter in terms of the buildup before end, and Q4 a bit lower?
Yes, thanks, Francois. You're asking without asking. Yes, so you know, we don't give projections at least for the time being. So I think in a way, what we know in the industry has a little bit changed as well because now there are different biometric technologies coming in. There is always a big shift between the OEMs as well as their market shares we have seen, even if it is consolidating to the big 6 players, maybe you could say. That it's more and more going towards them when it -- on mobile phones. But I -- and we know that Q1 is always a low quarter because we are so strong in Asia, and they have the Chinese New Year and everything happens there. So there's a buildup always in Q3 and Q4 into Q1. But I wouldn't start to guide. But I think, clearly, we feel more optimistic about the future now, and we have kind of settled in our market shares, which has not really changed this year anymore. So we've been able to defend that. So I'm more optimistic now about our position, clearly. And then we need to go in for the new technologies now. I think you would say the dust has settled a bit when it comes to the capacitive mobile phone market.
Okay. It's a good transition to my next question, actually. I want to talk about the in-display sensors because when you say in your release that you intend to capture the position in this market, the in-display sensors in '19, and my question is very simple. How do you want to do that? Because as far as I'm aware, you don't have any products yet in development, yes, for the full display. But I didn't see any commercial launch. So I'm quite surprised, how can you capture some position in there?
Well, it's actually -- there's a few things, right? So we have worked on a number of solutions but the main one on optical and then on ultrasonic. The ultrasonic, of course, is a full screen, which is technically much more complex to do, and we don't give any time lines on that one, right? That's an own project. What we are saying now is that we will go into optical next year in the in-display. And I think that how we will make it there is actually quite simple. We have -- first, we have -- of course, we have a clear market access now. We have a clear position in the market. We are a volume producer. So there is always, at the end of it, it does -- this optical market or the in-display market, it will be optical and ultrasonic that you will see in the in-display market is only in the beginning. It is only the beginning. It is only -- I see it only starting next year, really, from getting to certain volumes. So I think that there is -- I have no doubt that we're going to take our position in there. Of course, we need to have a good product. It is not so that the products yet that have come out have been overly impressive in that area. So clearly, there is a lot of position for a company like us to go in there. But having said that, I realize that we need to prove it at the end of it and get out with a product so.
Yes, I'm a bit confused because I mean, as I look at them, like you say, you said that you are developing an ultrasonic sensor for the full display. And now you have optical products, you developed it as well and you...
Yes, we have. Actually, on the Technology Day, we told that we are working on both optical and ultrasonic.
You emphasized much more the ultrasonic sensor.
Yes, because that is, of course, more disruptive. I think optical is more from the consumer point of view. Optical is you get the same performance. Actually, today, it's a worse performance than what you get on capacitive when it comes to speed and quality and security. But I think that, clearly, the optical is more of the same, but it is in in-display. So we work on that as well. It's not a disruptive technology, but it's a good technology to bring out for the in-display solution, right? And you will see many -- yes, so that's -- yes, it's technically simpler to do [ product ] innovation than what an ultrasonic full in-display is. And I realize that this can be confusing because there are so many in-display solutions actually that will come over the next 2 years. You will have [ hot zone ] both optical and ultrasonic, which is one finger close in one spot. You will have a large area optical, probably ultrasonic, and then you will have half screen and then you will have full screen. So there is quite a few solutions coming actually into this in-display area.
When do we -- should we expect you to have an optical sensor to sell? I mean, to have a commercial product on the market?
We expect in 2019 to come out with actually deliveries in optical.
But to be clear, today, you don't have any product to offer yet?
No, we haven't. That's why we're saying that next year, we will commence.
Okay. That's clear. One question on the iris Delta ID. Can you update? Because I don't see anything in the release and I mean, it's been a big acquisition for you. I was just wondering if you could give us some updates. What's the plan? Should we expect something?
Yes, with 3 areas where we are going with iris. One is clearly the mobile area. We have to get the convenience better. I think the [ face for touch ] has increased the consumers' expectations on convenience. And that is something that we are working on and will improve. So we will continue working on that. And then we can get actually a competitive, more secure with similar ease-of-use as a face solution into the market, which will be because the face solutions that Apple is providing is, of course, very expensive as of today. So we can come with -- into the mid-segment and hike from there. That's the logic with iris in mobile. Then we continue selling in embedded, like we have had quite a few launches now with the different payment terminals in India and continue with that. And of course, the Gentex, which is the car industry, for example, the Gentex deal, which is the exclusivity that we did for 10 years, that continues. But we expect only launches in late 2019 from that.
Okay, that's clear. Maybe just on the iris. Is there any risk of impairments, I mean, in the short term because I mean, I guess the performance is not what you expected. So is there a possibility? Or if not, question...
No. No, we see good business cases clearly for iris. We are in -- but you're right, it's not -- it hasn't grown as fast as we wanted, clearly. And we need to get the usability better now. That is the moving target. It is still by far, by far, the best iris solution in the world. No doubt about that. And we clearly need to get them improved on the ease-of-use. That's the main effort that we are doing now for the mobile industry.
Okay. And then just the last one for me. The cash flow was strong. Going forward the next couple of quarters, how we should think about the performance?
Well, this positive cash flow we reported in Q3 is due to improved earnings. And we had the decline in accounts receivable and reduced inventory level. Not giving any guidance for Q4, I would say that we're obviously continuously focusing on this, and we are improving our efforts on this area as well, as we go along right now. Learning from past experiences.
And your next question comes from the line of Viktor Westman.
Many questions have been asked already, but I want to follow up a little bit on the in-display solution. It seems like you're much more optimistic now, but the market volumes, as you mentioned, are small. Can you explain why you feel more optimistic about this now? Are you -- I mean, what's the -- how is the discussion with customers going? It sounds even like you have customers waiting in line for your products.
Yes, I suppose there is. After the -- I would say first that it's very clear fingerprint sensors in the mobile will continue, right? So I think there's clearly a strong demand for that. And we will have the mid- and the low-end segment and some parts of the high-end segment will be capacitive, which is, of course, from performance and cost, clearly in its own class. And at the same time, the kind of fashion trend to go with the new in-display sensors, I think that, that will also pick a good volume next year. The different -- the good thing about it in the in-display is that the price levels are very much higher in the beginning. Of course, there will be price erosion there. We have learned that from the capacitive. I'm sure that will be seen also both in optical and ultrasonic solutions that are coming out. But over the next 2 years, you will have quite a good revenue from the in-display because of the higher price levels. So I think that -- and we think that is a good position for us to go in there as well. It's very close to our capabilities. And so it's -- and we have, of course, worked on those -- both of the technologies for quite a while now. So it's a good time for us to go into that industry and get that segment.
Yes, and a follow-up also on the face recognition versus iris. There, we have not seen so much launches yet, I think, neither iris or face. What's your take on this? Are you surprised of this low interest? And -- yes.
Well, I think what has happened in -- that's a very good question, and I think it shows, of course, that what has happened is if you look at the face is that Apple clearly had a very -- they have done a lot of investments. It is quite a big investment, and it is a very costly solution. It is a very good performance as a solution as well. And -- but then, there is a very scattered segment after that. There are a number of different solutions from 2D to 3D, and the level of those are not so good at the moment in the whole market. So basically, it's -- I mean, because it's so scattered, it's very hard to get that to use in payment, and to just use something for opening up the phone is, of course, not enough to drive because you really need to use it for many other things like real identification with security included. So because that market has scattered, it hasn't maybe taken outside of Apple that much off. But we believe there will be a big touchless market as well. It's more scattered, the whole biometric in the mobile phone industry, so you will see combinations and you will see other versions of it. And there is a position for iris with the usability, so we're combining the usability and the security, right? So we believe that that's a position where we can still play because we will, of course, have then same level of usability, with much higher security and much lower cost, with expanded cameras, right? So that's where we are coming in. But you're right that the touchless solutions, nobody is even close to what Apple has delivered in terms of the capability. So it's very hard for it to take off at the moment for the other face solutions.
And your final question from the telephone lines comes from the line of Jörgen Wetterberg.
A nice trend of the turnaround here. I have a couple of questions. The first one is really related to your R&D spend, where you're decreasing to SEK 41.4 million in your R&D expenses and then SEK 14 million capitalized. How will you be able to grow your market share and take position in the segments of in-display, smart cards, automotive and other embedded going forward while, at the same time, reducing your R&D spend? Could you give some flavor on that?
Yes. I suppose that there's a few things. Focus, utilize your own R&D for what you are good at and very good partnerships. And maybe finally, also access into China in mobile. So I think that those are maybe the 4 reasons, right? So first of all, the mobile capacitive, we have, of course, moved a lot of the resources. You're right, we have cut substantially, and it's been a painful process for us. We have still extremely high skilled capabilities in fingerprint sensing and iris. So what we have done is we have cut a lot on the mobile capacitive. We have just gotten out and getting out now a fantastic product. It will be the world-leading product in mobile capacitive. That will form a base for us for the development into the smart cards, which is going to be capacitive sensors. And then when it comes to the partners that we can utilize, we have then moved the resources, of course, into the new in-display solutions. We can move them there as well as embedded, which is also capacitive at the moment. So in a way, when you utilize the capabilities you have, you can do those things that we have on the road map now. On top of it, in in-display, the ecosystem where we are going into is very much in Asia in the mobile, and that's, of course, where we are already deeply, strongly included in that system. So we have the partners, we have -- the whole channel is in place for us to build on the capabilities that we all do that and using the partners for the areas where we don't need to develop. So it's strong focus on what core do we do ourselves, the partners and then, of course, using the new investment into the new areas.
Then a question on revenues. You improved 11% sequentially. Could you give some color on what's driving that? I mean, is it better mix from other segments? You're saying that you're tracking against getting 10% outside of the capacitive. Or is it better share of the addressable market for capacitive? I would appreciate that.
Yes, I think the embedded has grown pretty much exactly as we planned. We said we'd be -- around 10% of our revenues this year will be embedded. And we are exactly on -- we're on track there and we will make that. And I think that, that will continue to grow for us. The embedded area is a good growth area for us. It will continue growing next year and in the coming years. Biometric's coming clearly into more and more devices, all kind of tokens, payment devices, access. So I think that is a good area to be in, and it's also now starting to show numbers for us. I think also the mobile, we have now kept our market share ever since Q4 last year, where we're kind of running on it so we have been able to kind of, if you say, the dust has settled in the battle. And we're the only non-Asian there in that business anymore with substantial volumes. And we are the market leader in capacitive mobile. So I think that -- and then, of course, I suppose one part of it is that in the mobile segment, the big ones where we are so strongly involved are taking more and more share. It is one of the toughest industries in the world, I think, in any industry but also in high tech is the mobile industry. That seems to be consolidating kind of every quarter a little bit more towards the big 6 ones, 6 players in the world. And that is -- or 7, 8 players, if you may, and that is, of course, also helping us when we are well positioned in that segment. And then finally, the product mix as well, which is helping us there. And maybe also -- yes, that's maybe the main reasons.
Okay. Two more questions, if I may. The next one is related to the addressable market and the potential of Samsung as a customer. I mean, they've launched their own in-display sensors, taken by laying some -- and also for in-display cameras. Do you still see them as an addressable market for in-display sensors or maybe even capacitive sensors? Or is that door closed?
Well, I think that, absolutely, their addressable market, obviously, we haven't been able to enter. That's not a secret; I can say easily, right? And we would want to enter. I think it's an addressable market if we can get in with the best capacitive sensor in the world now or in the new technologies. But of course, it's -- I mean, obviously, we haven't gotten in so far. So let's see. But yes, it's an addressable market and it's tough for us to find a way in there.
Okay. And last question relating to OpEx. You said you're tracking well on the -- with the program. And previously, you said that you will -- you're aiming to be below SEK 400 million annually excluding the effects from R&D capitalization. It seems like you're very well on track. Could we expect more there? Or is that where you're still targeting?
If I could just add to that, that we are on track for that during 2019, which is according to plan, so...
Yes, I suppose. Yes, we have said that we're going to be under SEK 400 million, excluding the activations, right, next year. So I don't think we want to add to that one. But yes, we are on track. As you said yourself, Jörgen, yes.
There are no further questions from the telephone lines. Please continue.
Yes, we have a question from the web as well. Could you please give us an update on the patent infringement complaints that you filed recently?
Yes. But as we said earlier, I think this is going to be a long journey. These typically take time. So we will update -- these cases take time, so we will update. Obviously, we will defend our patents, and it's long cases. So I think there is nothing new to tell from that one. And we will immediately, of course, come out and tell more when there are anything that we need to tell about it. These are complex cases always. We feel strongly that we need to defend our innovational patents and then the question comes, of course, how do we do in the Chinese courts.
And one question on the optical sensor technology. Is there anything that you can say in terms of Fingerprint's advantages vis-a-vis competitors?
I think that we will -- yes, I think that's a very good question. And I think that what we want to do wherever we go is a few things. We want to take a strong position. We want to be a leader in any market or any product area that we go into. And I think that with everything that this company stands for, we want to bring whatever is out there and has been delivered and will be delivered, we will be, and we want to be better on quality. We want to be better in terms of the technical innovation and security as well as performance. So basically, quality, performance, security, we want to bring better than that into the market, and that is the capabilities we have in the fingerprint sensor area, that's the skills we have in the system development, in the algo and our capability to make the system work better than anybody else. That's what we want to bring to the market.And with that, thank you very much. We are coming to the end. So I would like to thank everybody for joining us this morning. And I look forward to talking again. I will get back to you later in the year regarding the financial color for 2019. And with this, you have a nice day, and talk to you later in the next quarter. Take care. Bye now.
Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may now disconnect. Speakers, please standby.