Market & Company Update
WOCKET WORKING TOWARDS CES
Investors have come to realize that the "revolutionary" Apple Pay is a continuation of the existing credit/debit card model and payment infrastructure. It adds a layer of security and convenience but the back end is still the same. In other words, we are digitizing the plastic part of the existing payment system rather than doing something profoundly new and different.
There is a simpler and more direct way to digitize your credit cards. Using a digital wallet like the Wocket, the myriad separate plastic cards are replaced with one reprogrammable card that behaves as whatever card the user selects. Not only does this also use the same back end systems in place, but it also works with all the existing front-end systems for credit and debit cards.
Major retailers like
So for us, this puts solutions like the Wocket in a favorable position with respect to other solutions involving all non-cash transactions. Consumers can keep their existing cards, pay any merchant, and have no worries about security, fraud, battery life or other "technical issues" that bedevil many existing phone-based offerings from QR codes to NFC.
As many failed Kickstarter projects attest – it's exponentially more difficult to launch a real consumer product at scale than make a slick video showing a magical solution, like "Coin" for example. When you get into the nitty-gritty of different cards and formats needed to support all cards and not just the easy ones, some real technical innovation is needed.
We still expect their initial production run to happen during December and for first commercial units to be in use during January. CES will be a coming out party for
The market has been taking a "wait and see" attitude with respect to the shares since the end of the summer when it became clear that commercial volumes wouldn't happen until 2015. We won't try and predict market sentiment on NXTD, but if the company meets current plans for early commercial units by December and has a solid debut at CES, the shares will have put in a bottom.
We plan to share more data points in December as production work continues. Our IV of
It's also a good time to keep a careful eye out for indiscriminate tax-loss selling during times when volumes are low – it can create some extra volatility. Based on the outlook for next year, we'd be looking to exploit that opportunity should it materialize.
The NXT research update (PDF) is also published and available here: http://s3.amazonaws.com/PUBLISHED/NXT-ID_NXTD_SV_NOTE_DEC_2014_PUB.pdf
Past reports and related research can be found on our website at http://soundview.co/infosec
SoundView Technology Group
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