All good points digi.
If there is a market, the big players will jump in.
I guess one needs to compare selfie sticks to selfie drones to get some idea of market size/ market potential.
A selfie stick sales first grew in 2014, topped out in 2015 and been in decline since late 2015.
Just like a drone, they are a fad product, always getting replaced by the next best thing
There are many estimates, the highest being circa 4.5m sales worldwide in 3 year period, so i'll go with that figure for now.
Lets say 1.5m sell per year, Average sale price is $10 - $30, so let's use $20.
1.5m x $20 = $30m market revenue per year for selfie sticks.
So if 1.5m people buy a selfie stick per year, how many of that market will
a) fork out say $400 for the drone instead, and
b) how many new participants that never liked the selfie stick, become part of the drone market?
Its tough one to know.
Say of the 1.5m, 75% never buy a drone, 25% do.
So we have a market per year of 375,000 buyers
Lets say the market for selfie drones, even though 20x more expensive, brings in 50% customers on top of current selfie owners.
Say 550,000 sales per year.
Say IOT gain 10% market share = 55,000 sales per year.
$399m x 55,000 = $22m revenue p.a
Guessing their profit per sale is $80 =
Gross profit circa $4.4m p.a
So @ 4.4m gross profit p.a, market cap is about 22 x gross profit at say $100m market cap.
Fair?
Anyway just my rough calcs, feel free anyone to shoot me down, they are but a lazy guess, albeit and the biggest concern is I think the product is a short term 3 year fad product at best, so the gross profit is not a long term sustainable number, so u must be first in and first at first sign of slower sales IMO and move on to the next product and/or stock.
As IOT has other products in the mix, guess they will help justify the market cap and sales revenue going forward, if the products are any good.
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