Morpho

Description of Services

We are an R&D driven venture company established in May 2004 centered around technicians from The University of Tokyo who have been conducting research into digital image processing technology. Based on the belief that computer science should be a practical discipline, our mission is not to conduct cutting-edge research on a purely theoretical basis, but rather to constantly pursue new discoveries which will contribute to the world based on the various needs of society. Our goal is to construct the next generation of the digital image and visual industry through product development and R&D of unique technologies.
Morpho has long intended to be the de facto standard by offering an efficient and high-quality next-generation digital image processing framework which links the processes of recognizing, processing, and expressing images on embedded devices such as smartphones, then on various platforms.
Morpho operates a software licensing business related to assorted software used for image processing. The following describes the 1. software products, 2. profit structure, and 3. intellectual property strategy of the business.

1. Software products

Of the five human senses, vision is an important interface for receiving information. It is said that 80% of human information processing relies on visual information. Due to the development of networks and digital technology, as well as the spread of smartphone and other mobile devices in the recent years, the environment surrounding visual information processing has changed drastically. We believe that it is necessary to develop the technology as the second pair of eyes different from our own, which can make it possible for anyone to take, save, edit and share digital images and that can make the new lifestyle a reality.
Since our establishment, Morpho has been conducting R&D to produce advanced algorithms related to digital images and commercializing various software, which leverages the cutting-edge image processing technology. The superiority of the current technology and products of our group is that as all the functions can be realized by software, unnecessary space can be saved, the durability can be improved, and the electricity consumption becomes lower.
Morpho identifies the most recent trend in advanced technology, and commercializes it as products reflecting the customers’ needs. We will continue to launch products at the best timing and grow as a company which can “impress” and “delight” people with imaging technologies.

2. Profit structure

Morpho is operating a software licensing business centered around the smartphone market. Our revenue can be classified in three categories: (1) royalty revenue, (2) support revenue, and (3) development revenue. An outline of our profit structure is described below.

(1) Royalty revenue

We authorize major smartphone manufacturers etc. to distribute and use multiple software products developed independently by the Group for commercial purposes. It is a kind of revenue mainly comprising the collection of license fee corresponding to the volume of shipments of smartphones etc. which equipped with our products.
While Morpho and other companies work together, this revenue is part of a direct transaction agreed upon in contracts between Morpho and the companies which are given the license to use these products. Also, Morpho principally collects the license fees based on the actual shipment quantity.

(2) Support revenue

Support revenue can be divided into two categories. One is development supporting revenue which is from supporting smartphone manufacturers etc., to implement our software product to the devices on the premise that they are authorized to use our software product. The another is maintenance supporting revenue, which is from providing technical support for a certain period after obtaining authorization to use our software products.

(3) Development revenue

The revenue is mainly generated by providing our standardized image processing engine with limited scope of use of the technology and products when smartphone manufacturers perform technical assessment after prototypes implementation. Or by undertaking R&D when creating new technologies, products or services. Regarding the latter, it is possible for both parties to share the right of deliverables. If certain conditions are met, Morpho Group can solely conduct a licensing business. In addition, the revenue can also be generated by conducting development corresponding to the individual requirements (specifications) of smartphone makers based on amassed know-how.

Business Structure

3. Intellectual property strategy

As an R&D driven company, the cornerstone of our company is to launch unique and distinct new technology to the world. In order to protect our innovative and unique technologies and to secure the realm of our business activities, we are committed to acquiring, utilizing, and protecting patent rights in proprietary technical fields prior to other companies. Specifically, we promote the acquisition of patents which contribute to increasing the value of the entire business, and proactively work to maximize the value of potential asset. In addition, we investigate intellectual property rights to avoid infringement of intellectual property rights of other companies, which may contribute to business promotion stably and continuously.

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