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Dolby Laboratories (DLB) is a leading provider of audio products and sound technologies. Ray Dolby, an engineer and inventor who had a hand in the development of the first VCR, founded the company in 1965. It went public in 2005. In the beginning, Dolby specialized in noise reduction, predominantly working with recording studios to eliminate background noise, but it soon parlayed its expertise into the film industry. Eventually, Dolby became the industry standard for music and film audio production.

Since then, Dolby has expanded its offerings to include many new innovations and technologies across a number of media segments. It is now a major player in the entertainment technology industry, and its innovations can be found in film, television, music, video games, computers and various other consumer and professional electronic devices.

The company has managed to retain a strong position in the industry, even with competition from players like Sony (SNE) and Kodak (EK), by focusing on innovation and patent protection. Dolby constantly develops new technologies, which keep it on top of market trends and eliminates the need to dwell on the possibility that its existing products and services could become obsolete. For this company, it’s all about moving with the market.

And in order to keep its position secure, Ray Dolby made patent protection a fundamental of his business. Licensing only technologies that cannot be duplicated, Dolby employs a “one of a kind” attitude that has strengthened its brand and reinforced the consumer need for its offerings.

Having established itself as the standard in audio sound in regard to traditional media, the company is now attempting to achieve the same recognition in newer areas, including the digital broadcasting, PC, and mobile markets. The company has jumped on the digital band wagon and is now carving out a piece of the market internationally as foreign countries make the transition from analog to digital television. In fact, the company is looking to be named as the standard for the digital roll out in China, expected to deploy in 2012. In terms of PCs, the company is benefiting from Microsoft’s (MSFT - Free Analyst Report) Windows 7 roll out across corporate enterprises, which has Dolby’s audio sound technology embedded in the operating system.

By keeping up with changes in the industry and constantly developing new technologies, Dolby has been able to profit from new advances in the market. An evolving industry means endless growth opportunities for a company, like Dolby, known for innovation. In fact, the recent emergence of mobile devices, such as the iPad developed by Apple (AAPL), has Dolby looking to take on a brand new segment that seems to have considerable potential.

Overall, Dolby continues to hold a strong position in the industry, largely due to its ability to adapt and move forward. We expect both revenues and earnings to rise this year and good performance to continue down the line. The company is well positioned for long-term growth as it looks to take advantage of emerging opportunities and benefit from its ability to remain on the cutting edge of an ever-changing industry. All told, investors looking for a technology stock that possesses good near- and long-term growth prospects, may want to consider Dolby Laboratories.

At the time of this article’s writing, the author did not have any positions in any of the companies mentioned.