For smartphones to perform all of their technical wizardry, some highly sophisticated systems must be built into them. For example, it's an accelerometer that seamlessly cues your smartphone to change its display orientation from portrait to landscape when you turn the device sideways -- working in the background, it measures how the device is being held.

Now, with the advent of Apple's (AAPL) iPhone 4, an even cooler system has taken its place inside the smartphone: The gyroscope, which, when combined with that aforementioned accelerometer, gives your device six-axis motion sensing. That technology was what allowed Steve Jobs, in his recent presentation, to use his iPhone 4 to play a game of Jenga, tilting the device back and forth to control the app.

As the iPhone 4 boom, continues, other smartphone makers will naturally follow Apple's lead, meaning the gyroscope market could be poised for growth. And investors will get a chance to participate: One of the top developers of gyroscope chips, InvenSense, which makes chips for the Nintendo (NTDOY) Wii, has filed to go public.

A Look at InvenSense

Steve Nasiri founded InvenSense in 2003. Before that, he was involved in a variety of companies that develop micro-electro-mechanical systems (MEMS), a technology that integrates mechanical elements, sensors and electronics on silicon chips. Nasiri has more than 50 patents and patent applications in the field.

No doubt, his expertise has helped make a top player in the MEMS industry. Besides having a small form factor and lots of power, the company's chips also have a set of application programming interfaces (APIs) that make it easier to embed them into systems.

In all, InvenSense has shipped more than 60 million units of its products, and from fiscal 2008 to fiscal 2010, its revenues have zoomed from $7.8 million to $79.6 million. The company generated $15.1 million in net income for fiscal 2010.

InvenSense's Post-IPO Prospects

In addition to developing strong technology, InvenSense has developed a highly efficient manufacturing process. Yet the company faces serious challenges. First, the competitive environment is fierce. InvenSense's rivals include Analog Devices (ADI), Robert Bosch GmbH, Epson Toyocom, Freescale Semiconductor, Kionix, Murata Manufacturing, Panasonic, Sony (SNE) and STMicroelectronics (STM).

But the second, and greater, issue is that InvenSense gets about 85% of its revenues from one customer: Nintendo. Consider that the Wii is in the fourth year on the market, and consoles generally have life cycles of five years. The general estimate is that Wii shipments will go from 25.9 million in 2009 to 18 million in 2011.

In other words, InvenSense really needs to find another major customer. If not, its revenue growth ramp could be in jeopardy.

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