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Up until 2011, Motorola led the world in sales of ‘connected-vehicle’ devices—communication devices specifically built for trucks, buses and fleets in heavy industries. While generating over $100M a year in revenue from this business segment, Motorola Mobility was purchased by Google, which shut down the highly profitable business, as it was not consumer oriented.
The shutting of this division left a major void in the market, leaving hundreds of thousands of professional vehicle drivers and fleets without a vendor to supply this key communication solution.
Siyata Mobile Inc. (TSX.V: SIM) (PINK: SIMFF) sells ‘connected-vehicle’ devices and accessories targeting the highly lucrative professional fleet market. Siyata is replacing the current multi-device status quo with a single device that incorporates voice, data and fleet management solutions. This innovative communication platform allows commercial vehicles to have a single device with a single SIM card, providing a voice and data plan, one installation and one maintenance package—making it far more cost effective than the current multi-device solutions.
Shortly after the Google purchase, Siyata CEO Marc Seelenfreund was approached by a mobile operator that had 80,000 aging 2G CDMA Motorola devices with no solution to replace or upgrade the hardware.
“We perceived a rare opportunity,” stated Seelenfreund in an exclusive interview, “so we hired the cream of the Motorola development team to build a new generation of devices that were more robust than the Motorola equipment and work on 3G networks allowing an easy upgrade. We quickly got an order for 5,000 units, which we built and delivered within nine months. Fast forward to 2016, we have now sold over 120,000 units, have an additional Android based device and are working on our next generation 4G LTE platform.”
Siyata’s Android device, called ‘Voyager’, is an all-in-one solution which simplifies the inside of commercial vehicles, which typically have a GPS system, a 2-way radio, a business cellphone, a fleet management device a black box and multiple SIM cards—with numerous data and voice plans.
The Voyager physically installs into the vehicle, connects directly to the car battery and has a dedicated cellular antenna and booster, allowing better cellular reception in areas with spotty coverage. It also has a loud external speaker and a directional microphone, which cancels out the background noise common in a truck cabin or a police car. The second generation model is currently being sold by distributors who are incentivised by the additional revenue streams generated by fleet-tracking software and data based applications.
“Our business operates in a large niche, as there are currently about fifteen million commercial vehicles on the road just in North America,” stated Seelenfreund. “Apple, Samsung, LG, HTC—none of these telecom giants are interested in entering this space, as it involves professional installation and other aspects outside of their comfort zone.”
“Our goal is global market dominance,” confirms Seelenfreund, “and we are positioned to achieve that. Smaller companies could decide to enter the arena, but it would take them a long time to catch up. You need an array of skill sets, both on the hardware and software sides, plus multiple high level cellular certifications just to enter the market. This is not software that you can code in your basement and then sell on the cloud.”
Siyata sells across a broad spectrum of industries, such as trucking, ambulances, police cars, busses and more—so they are not vulnerable to downturns in any one sector. To avoid the burn rate of maintaining a large sales force, the company books sales through mobile operators and distributors, who then resell the devices to their customer base.
|Siyata sales have been growing 40% year-over-year for the past 3 years.|
Typically the dealers approach Siyata, looking for high margins, which are far better than a consumer device. The dealer gets a cut of the device sale, the installation, the data plan and they acquire a ‘sticky customer’, as once a device is installed, the customer tends to leave it installed for many years.
Instead of buying a suite of devices costing between $6,000–8,000—Siyata’s customers pay about $1,000 for a robust system that includes mobile push-to-talk technology, which is a high fidelity 2-way radio system enabling headquarters to talk simultaneously to up to 300 vehicles over a cellular sim card. Seelenfreund anticipates additional revenue streams in the future from collaborations with third party app builders that can be pre-loaded on the android platform.
Siyata has received purchase orders to install Truckfones in the fleets of several companies to be installed by Ralcomm, a TELUS authorized dealer in Alberta. Its Truckfone device will replace the customers' outdated Motorola M800 devices. Ralcomm Manager Mike Stark, commented, "Our customers tell us that the Truckfone audio quality is night and day better than their old systems."
“The Telus deal is a significant milestone,” stated Seelenfreund, “because it gives us validation in North America. It’s not every day that a small device vendor gets a green light from a major Canadian mobile operator, and we’re now in discussions with additional potential partners. In 2016, our objective is to partner with a major mobile operator in the United States.”
Siyata sales have been growing 40% year-over-year for the past 3 years.
Siyata has also partnered with Israeli Push-To-Talk distributor iBIZ Technology, which will sell the Voyager, and accessories, to Israeli businesses that operate workforces and fleets. The iBIZ opening purchase order was for $300,000 with the expectation of significant repeat orders.
“Every time we get a new distributor, it brings additional annual revenue,” stated Seelenfreund. “We went from sales of $7.3 million in 2014 to close to $10 million in 2015, and have never lost a customer. We conquer a piece of territory and then we keep it. That is part of what is powering our continued growth, and in 2016 we anticipate another strong year.”