The business model - a bridgehead into new verticals
Research Instruments offers four different main eye tracking product series, Aurora, Smart Eye XO, Smart Eye dx and Smart Eye Pro. Aurora is what is known as a bar tracker, located on a display that customers can install themselves. This can be viewed as an entry-level product, once the customer has a need for eye tracking. Aurora has initially had two cameras, but in 2019, a new version with bar tracker was developed, which will have only one camera, and will be launched in early-2020. Smart Eye XO, launched in late 2018, offers an upgrade opportunity for Aurora users. It satisfies the need for eye tracking that is external from displays.
Smart Eye Pro is a fully custom system without up to eight cameras, offering robust, precise and reliable eye tracking data. Finally, Smart Eye Pro dx is a system with smaller form factor but greater precision that helps customers save valuable space in complex environments. A number of complementary accessories such as the Smart Recorder, Smart AI, a support function and subscriptions are offered to back Smart Eye Pro and Aurora. All systems are sold as complete solutions, with customers paying per system or per product. Minor revenue flows are also generated during product lives in the form of subscription income and software updates. Although Smart Eye does provide hardware, the substantial values are in the algorithms and software used in the system, as is reflected in the business area’s gross margins of between 75 and 90%.
Progress in 2019
Research Instruments’ sales decreased by 20% to SEK 23.6 million (29.5) in 2019. Although 2018 was a strong comparative year, progress in 2019 was also somewhat limited by customers deferring orders. However, Smart Eye considers that no business was lost, either to competitors or in terms of future orders. The interest from customers in neuroscience remains high, especially benefiting the demand for more basic eye trackers. Increased demand for more basic eye trackers is also sourced from other customer groups and is one of the reasons underlying product development in 2019, which will spawn product launches in the Aurora family in 2020. Interest in sophisticated eye tracking systems for train drivers, other participants in the rail industry, as well as the aviation industry for pilot training and pilot monitoring systems, is continuing to grow.
"Smart Eye’s sales were SEK 49,8 Mkr during 2019. Of this total 47 % (SEK 23,5 Mkr) was generated from the Research Instruments business area"