BOSTON - June 26, 2014 (Investorideas.com Newswire) SoundView
Technology Group releases the recent research update on NXT-ID Inc. (
OTCQB: NXTD) and its smart wallet, Wocket™.
Recent developments following the June 11th update include the Company has filed for a
NASDAQ
application and appointed a new independent Board member to satisfy that requirement for listing.
Wocket Launches into Waiting Market
Kris Tuttle & Stephen Waite – June 11, 2014
Summary: The Wocket™ was officially launched on
May 28th at the Plaza Hotel in NYC. All the feedback we received from
attending suggests that consumers who get a chance to see and understand
it, immediately want one. It's a viable way to deliver something
consumers can use as a digital wallet that is secure, private, and able
to handle all their payment, identification, and loyalty needs. The
Wocket is really a wallet replacement, and the functional demonstration
worked very well. We'll be monitoring the progress and consumer reaction
very closely over the next few months with an eye to validating our IV
model, which currently suggests a
stock value of $11.70/share. We have also extended our forecast to arrive at a projected IV in 2015 of $20.55.
Additional Details: As a prelude to what will be a more active
marketing phase, the event included attendance by the media, investors,
analysts, and Miss Universe 2012, which added a special level of energy
and media attention.
In addition to elaborating on the key features, there was a live
demonstration of using the Wocket to do a typical transaction by swiping
the card, just as one does with a standard plastic debit or
credit card.
Online preorders are available with first units shipping to
consumers in September at a price of $149.99, plus some optional
services for customers that require additional protection.
Wocket is NXT-ID's replacement for a conventional wallet. The heart
of it is the device itself which securely stores cards digitally – that
covers virtually all of the important cards consumers carry in a wallet
today, including credit, debit, ATM, loyalty, gift, ID, membership,
insurance, medical information, and coupons. Wocket locks a user's
private information in an electronic "vault" where only an authenticated
owner can authorize access to the data. The case provides some space
for cash and a driver's license.
As concerns continue to mount in the U.S. and around the world
about identity theft and data hacking, the timing of the launch of the
Wocket helps NXT-ID channel media attention into their
marketing strategy. The Wocket addresses the important issues not adequately addressed currently by smart phones and other mobile devices.
The biggest advantages are in authentication and security. The
Wocket uses biometric technology to provide identity protection and
security. All information used with the Wocket is encrypted by the
owner's personal biometric stamp. NXT-ID is a pioneer in biometric
technology, and the Wocket incorporates some of the most advanced
biometric technology on the market (see our report, "Mobile Security
Beyond the Password", for an in depth discussion of the technology). The
device protects whatever information is stored in it so that it cannot
be released to any other individual or device without the user's
permission.
All payment cards and other dynamic stripe cards are swiped
directly into the Wocket during the initial set-up process. Barcodes and
text, such as voter's registration, loyalty and/or membership cards,
may all be scanned or entered into the Wocket. All information is
encrypted by the owner's personal biometric stamp and can be accessed
via a low power touch screen or optionally, a voice command.
Information is placed on a tamper-proof encrypted chip inside the
Wocket rather than on anywhere in the cloud. Any attempt to access the
encrypted chip will result in destroying any information stored on it.
If a Wocket or Wocket card is stolen, the company can guarantee
that the Wocket is worthless to anyone besides its owner. The security
technology incorporated by the Wocket zeroes out any relevant
information on the card dynamically after each use. Hence, the card used
with the Wocket becomes a blank piece of plastic to a thief. For added
peace of mind, NXT-ID will be offering customers an insurance plan for
stolen, misplaced, or lost Wockets.
The Wocket can securely store up to 10,000 items including –
debit/credit/loyalty/gift cards, health information, coupons, and
miscellaneous records.
Battery life is expected to be one year or more, depending on
frequency of use. A light will appear on the device weeks before the
battery is due for replacement, so users can replace the conventional
lithium ion battery that is widely available at a variety of retail
stores around the world.
NXT-ID has an FAQ section on the Wocket website that addresses key
questions and issues associated with the device (see:
http://wocketwallet.com).
NXT-ID has started taking pre-orders for the Wocket on their
website, with plans to ship the first devices in September. Unlike many
digital devices on the market today, the Wocket is being manufactured in
America. NXT-ID is planning a significant promotional campaign this
summer to increase customer awareness and drive more pre-sales.
Sales Projections and Intrinsic Valuation: Over the past year we've
seen plenty of data showing that there is strong desire for a device
like the Wocket. Consumers are still waiting for an actual product to
buy and use. Initial sales volumes will depend on initial orders, and
initially, on the ability of NXT-ID to ramp production and manage some
longer lead time components.
After a review of our current projections and intrinsic valuation
(IV) model, we don't see anything that needs to be changed. However,
extending the projections and model out an additional year allows us to
publish a 2015 IV estimate of $20.55.
Our current estimate for sales in 2014 is 40K units, which grow
fast in later years to reach nearly 1M units in 2018 and 1.5M units in
2019. These unit projections are still very low considering the small
penetration rate needed to generate those numbers. If the Wocket is
successful, unit growth can be much faster. Many investors were
surprised by how quickly new categories like the iPad reached large
numbers of units after consumer adoption. We won't have any real
visibility on these longer term projections until 2015, but have a
credible working forecast to start with.
Although digital currencies are not the initial focus for the
Wocket, we were impressed with the figures showing consumer adoption of
bitcoin wallets grew from under 500K to over 5M in one year!
Conclusion: The official launch of the Wocket has
certainly increased our confidence in the IV model shown below. As
consumers begin to use the device in the real world, we'll know much
more.
There's huge demand to use digital payments and have a secure
digital wallet that is easy to use and genuinely safe. Consumers are
nearly clamoring for it. Although other companies have done Kickstarter
campaigns and showed slick videos, the NXT-ID Wocket will be helping to
define this market in the next few months.
The stock has been holding steady after a major post-IPO run, but
our IV clearly shows there is far more to go if the Wocket is delivered
on time and consumers have a good experience with it.
About SoundView Research
SoundView conducts independent research in emerging technologies.
Our approach is to combine major thematic forces where technology is
involved and use analysis to identify the most promising companies and
investment opportunities.
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We apply our own proven approach to valuation that we call intrinsic
value (IV) for informing investment decisions and optimizing portfolio
management.
Full report with images and graphs:
http://s3.amazonaws.com/Published_Research/NXT-ID_NXTD_Update_Note_Final_June_2014.pdf
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