If they want to operate the watch, the app has to be downloaded and subscribed to. App subsriptions will be proportional to sales. See below for more detail on the proportion.
“Over 6,200 monthly App subscribers as at Dec 31, with a further 3,100 added in January 2019.”
That means that January had app downloads (which would be proportional to number of watch sales) totaling 50% of the total downloads (sales)of the previous six months. January has been confirmed as a strong month. That’s good to see and it adds credibility to the Applyzer charts ability to identify sales patterns.
From the annual report. “To operate each SPACETALK watch requires the AllMyTribe App with a monthly subscription fee of $5.99 for up to 2 watches or $8.99 for up to 5 watches. Currently, each SPACETALK watch is generating recurring monthly gross revenue averaging $3.61 per month.”
Based on the average of $3.61 revenue per watch and the $5.99 price of the app, we can conclude that around 1.6 watches are sold per app downloaded (a lot of parents buy two watches but only need to download one app). Therefore 3,100 apps downloaded in January should equate to around 4,960 watches sold in January. That’s just under 60,000 watches per year annualized for Aust and NZ assuming only flat same store sales over the rest of the year and no new stores selling the watch. I’m expecting a bit of a dip in Feb but that would be more than made up for with the seasonally stronger Nov and Dec period so 60,000 is looking conservative if we assume any growth going forward. Considering UK is launching shortly, we should be on a rate of well over 120,000 watches per year for next financial year. If we expand our stores footprint in Australia (e.g. Harvey Norman could increase our Australian outlets by 85%) and assuming quarter on quarter growth on a same store basis then the companies revised target of 120,000 watches per year (lower end) is starting to look achievable very near term. If that is achievable in Australia/NZ then what is achievable in Europe? While some posters like to keep talking this company down, the way sales are currently tracking and assuming other retailers are added here, together with the launch in the much larger market in the UK in April, we could very realistically be considering numbers in excess of 200,000 watch sales per year for next financial year. Even without another retailer here, adding one more European country is likely to give at least as good a result.
With a gross profit above 70%, that sort of volume is going to give us some very strong profits next financial year which is only 4 months away.
