Dr. John L. Faessel
ON THE MARKET
Faessel Publishing L.L.C.
Commentary and Insights
A Breakthrough ‘Process’ as Big as the Internet. Maybe...*
Concept no more! It’s here: From knowing what happened to knowing what is happening – at all times – and then automatically controlling mission critical or asset protecting systems with that knowledge. It means, managing virtually any asset from "anywhere-to-anywhere" in the world...
iMetrik M2M Solutions, Inc. (OTC:IMEK) OTCBB
It’s M2M, Machine-to-Machine, and some experts suggest that the space could be bigger than the internet.
* Clark Nguyen, Ph.D, is Professor, and a Director of the Berkeley Sensor & Actuator Center, in the Department of Electrical Engineering and Computer Sciences at the University of California at Berkeley. Nguyen has told Forbes: “I like to be conservative about things, but in a way [sensor networks] could be bigger than the Internet.''
M2M stands for machine-to-machine communications: ubiquitous electronic devices can talk to each other through wireless networks and, through the Internet, talk to people who can control them. As more electronic devices become networked and empowered to talk with each other, M2M will multiply exponentially and have the kind of control over our lives we can't even imagine.
However obstacles have kept M2M from performing as predicted.
Analysts have been predicting that the M2M industry would grow in a near parabolic trajectory, or follow the “hockey stick” curve, meaning straight up for the last many years. Although the growth has been impressive, why did it not track the parabolic curve they have predicted?
Up to now, the deployment of M2M has been slowed due not to the lack of demand, but to the fact that integrators and users had to unify all the complex building blocks necessary to put together and operationalize an M2M system. (OTC:IMEK) understood this from the beginning, and they have been working long and hard and spending a lot of money to realize a plug and play "end-to-end" solution that works right out of the box.
(OTC:IMEK)’s Plug in and Play, End-to-End Solution
What (OTC:IMEK) brings to the table and the market is an "end-to-end” turnkey solution that involves sensors, gauges, or meters wirelessly linked to a “gateway” (similar to your base phone) and relayed through a world-wide network. Then, any “event” that activates the sensor produces a message that is automatically sent to inform whatever “party” (mobile device, manager, company) that needs to know so that further action can be taken.
So If it moves, grows, makes noise, leaks, or heats up (OTC:IMEK)’s end-to-end, plug in-and-play, cellular enabled wireless sensing service is a one of a kind solution that provides knowledge of what is happening at all times and then automatically manages that “situation” with that knowledge.
“What we’re talking about with M2M is little short of a second industrial revolution. The growth in connected devices over the next ten years will fundamentally change the way we live and work.” Matt Hatton, Machina Research.
Industry experts are estimating that M2M will grow 12-fold by the end of this decade according to the latest industry report by Machina Research. At the end of 2010, M2M accounted for 2% of cellular connections. By 2020 this will reach 19%, or 2.3 billion connections.
(OTC:IMEK) generates revenue from two sources: 1. A one-time fixed price on each device sold; and 2. A recurring monthly fee base on usage.
Importantly, once installed the base-unit can transmit “additional” information and data from other deployed disparate sensors of varied types in the local, e.g. CO2 sensors, panic notification or security applications that would bring added revenue to (OTC:IMEK).
Four recent agreements of note include:
1. In July 2011, (OTC:IMEK) and Monnit Corporation announced a partnership that will enable them to offer the M2M market a plug-and-play, end-to-end, cellular enabled wireless sensing solution using Monnit's wireless sensors, Monnit’s web application, and (OTC:IMEK)’s M2M Cellular Gateway with global connectivity. Users will benefit from a system that eliminates development time and reduces installation to an absolute minimum.
Management’s projections are for hundreds of thousands of installation to be deployed over the next two years. So, suppose for example that the monthly income is 200,000 X year one (1), 400,000 X year two (2) and that income is received every month. If it is only a few dollars a month, the total is very impressive. This multiplying effect of the recurring revenue model will yield very high and escalating profit margins as we go out further in time.
2. In October 2011, Metropolitan Industries Inc., the leading sump pump manufacturer in the US, selected (OTC:IMEK)’s M2M's all-wireless, web-based system to monitor its equipment and offer real-time preventive measures to keep their product offering ahead of the pack.
Since Metropolitan chose (OTC:IMEK)’s M2M to monitor all sump pumps it sells in the United States, it represents hundreds of thousands of installations a year, according to IMEK’s 8-K filing with the SEC. Metropolitan sells some 250,000 sump pump a year that it intends to monitor, so multiply 250,000 by let’s say $3 every month for the first year, 500,000 the second year and so on…..The same apply to every system installed.
3. (OTC:IMEK) also signed a manufacturing agreement with an important manufacturer of highly complex circuits requiring high standards of quality and short manufacturing lead times.
4. (OTC:IMEK) announced that it has signed an exclusive license agreement with private company iMetrik Global Inc. for the use of their entire global network for the Machine-to-Machine “M2M” markets worldwide.
According to a recent (12/12/2011) 8Kfiling, over the past six-months (OTC:IMEK) has been travelling in North America to meet potential clients and has received orders from two customers.
In Sum: Unknown and newly trading, this micro cap (market-cap $11million) has contracts in fist and is shepherded by an allied private company that knows the space. (OTC:IMEK) is launching an innovative Machine-to-Machine total solution disruptive to the existing market and value network displacing an earlier technology. It enables remote access and control over targeted equipment and services, as well as allowing monitoring, selective enabling, disabling, or any other command. Commercial, industrial and residential consumer applications abound for (OTC:IMEK). Imagine: passively managing and controlling just about, “you name it” from anywhere—wirelessly.
Because tiny and undiscovered (OTC:IMEK)’s end-to-end total solution brings a new and compelling boarder dimension to the M2M space I would envision that a major player in either the sensor or network sector would acquire them once they make inroads in the market. Most, if not all, major control system manufacturers are fast moving towards developing or buying the technology to implement this into their offering.
So what we have here is a recurring revenue value proposition with an almost sure-shot exit-strategy and it’s guided by savvy experience management who knows the space. Revenues should build in orders of magnitude as the multiplier effect takes hold. All things considered and with a tiny $11 million market-cap it’s a compelling narrative with “multi-bag” potential. More on this exceptional speculation in further reports.
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