Ann: Appendix 4C - Quarterly Report with commentary, page-177

I wonder if the pricing model for the ohm is just wrong. While on paper it certainly sounded good (for us), in practice the target market clearly isn’t responding too well to it (even when presenting the potential savings). After the manufacturing and installation, there’s not a whole lot of ongoing cost to continue to provide the service. So maybe if the model was different/less expensive than the current contracts, it could do better?

Now with lifx, that does provide some added incentive for trying to push the ohm. If they already have devices that can plug into it, then they may be more likely to choose ohm over other solutions. However I don’t think that’s going to be enough to convince companies to pick it up (as I feel the barrier might still be the cost). But it would probably help with realising a consumer focused version of the ohm.

But maybe we’ll be surprised by the ohms performance next quarter, however I won’t hold my breath.

As for the lifx side of the business, the revenue targets seem achievable. But whether they can achieve the level of profitability needed (enough to carry the other business too) before a CR is the current question.

As far as where they’ll take the two businesses, it’s clear the trajectory is to marry the products together, rather than just be lifx. Now they could go the direction of smarter automation, but I’m still unsure of how much that’ll improve the ohm sales. That’s if they want to push it through the ohm with its current price and positioning, the other options are to move more of the “brains” into the bulbs themselves, or change the pricing model of the ohm, or produce a consumer version of it.

I still think the company can be turned around. But whether that can be done without requiring a CR I’m not so sure.