Successful businesses are those that launch a quality product to the proper niche market at the right time. Siyata Mobile (NASDAQ: SYTA), manufacturers of the new SD7 rugged handset, appears to have hit all three marks this December. Orders for the newly launched field communication device and accessories are pouring in from the United States, Europe, Africa, and Asia.
The SD7 is a cost-effective, PTT (push-to-talk) rugged handset that is LTE capable, Bluetooth-enabled, and able to connect to Wi-Fi using the Android operating system. It’s water and dust-resistant with a drop-proof casing and robust battery that makes it a perfect fit for first responders. The SD7 is a significant upgrade from older land mobile radios (LMRs).
Siyata’s product launch of the SD7 comes at a time when the United States is attempting to expand a unified nationwide first-responder network that was built following 9/11. It’s called FirstNet, and the price tag to build it is over $100 billion. It’s also a broadband LTE network, which traditional LMRs are unable to connect to. The SD7 is a solution to that.
On December 2nd, Siyata announced initial purchase orders totaling $550,000 for the SD7. Several days later, Siyata disclosed a separate $1.3 million purchase order for SD7 devices in EMEA (Europe, Middle East, and Africa). That’s a strong start for a new product and a welcome revenue boost for a company that struggled after fleet shutdowns during the Covid-19 pandemic. Revenue projections for 2022 look good. Siyata is expected to be a strong player in the mobile communications space.
Siyata VK7 Vehicle Kit is Designed for Use with SD7
The SD7 isn’t the only new product Siyata launched this quarter. The VK7 vehicle kit is an accessory designed to work with the SD7 to provide an experience similar to what first responders have become accustomed to with LMRs. It includes an integrated 20-watt speaker, a connection for windshield or roof-mount antenna, and a slide-in sleeve for the SD7.
Combining the SD7 and VK7 gives first responders and fleet services a modern communication solution to integrate with emergency broadband networks. Connectivity is more reliable, ensuring that backup is always available. With broadband satellite communications and cellular signal booster compatibility, there’s little chance of emergency personnel hitting communication “dead zones.”
Police and fire responders in the EMEA are buying in. By December 7th, Siyata was up to a combined $1.8 million in purchase orders for the SD7 rugged handset and VK7 vehicle kit. The additional $1.3 million of that came from police and fire organizations in the EMEA. Like the US, these regions are expanding their broadband networks.
This is not Siyata’s first in-vehicle communication offering. They also manufacture the UV350, which has already been certified “FirstNet Ready™.” The UV350 comes with a PTT palm mic and 4G/LTE high-speed data and a lower price tag than traditional LMR devices. The VK7 includes many of the same features but is specifically designed for use with the SD7.
Leading US Distribution Partner Added in Q3
The EMEA purchase orders are just the beginning for Siyata. According to recent filings, they have also entered into a working partnership agreement with a leading U.S. distribution partner and global leader in the land mobile radio (LMR) space. The partnership went into effect at the end of Q3. The company is a non-exclusive marketing and distribution partner for the SD7.
When attempting to replace a legacy product, who better to help you with it than a leader in that product’s marketing and distribution. New North American connections to users of LMRs in the field are a perfect fit for Siyata. Combined with their extensive network of contacts in the EMEA, sales and revenue numbers should increase dramatically in 2022.
The partnership is more than just a marketing agreement. The engineering teams from both companies worked together to integrate push-to-talk (PTT) software into the SD7. The result is that the SD7 can now also integrate with existing LMR devices, making the transition to new broadband solutions that much easier.
This is niche marketing at its best. The SD7 is billed as a “mission-critical” push-to-talk (MCPTT) rugged handset specifically designed for first responders. The VK7 vehicle kit is unique and built to work with the SD7. A distribution partner gives Siyata an expanded network of “non-customers” to market an innovative product line.
The global PTT market is estimated to grow at a 9% compound annual growth rate (CAGR) to $38.4 billion by 2024. Taking that into consideration, along with both company’s engineering input into the product, makes this look like a good deal.
Siyata is Positioned for a Strong Year in 2022
Tim Moore, CFA at Zacks set a valuation target of $10.50 for Siyata back in October. At the time, the stock was trading at $2.86. It hit $4.61 earlier this week. All indicators point to a strong year for Siyata in 2022. Zacks estimates that they’ll reach EBITDA profitability sometime during the year.
The most recent U.S. distribution partnership is non-exclusive, so there’s room for additional deals. Expect those to materialize in 2022. The new player, with its software embedded in the SD7, would benefit from additional marketing agreements, so don’t look at them as an impediment. Siyata will no doubt be actively looking for additional partners.
Siyata has also recently started marketing the UV350 in Australia, through a partnership with Telstra, the leading cellular carrier on that continent. That news may have been somewhat overlooked with the most recent partner deal and push for new sales in North America, but you can estimate a revenue boost from that source in the coming months.
Overall, Siyata has made significant milestones in 2021, from weathering ongoing COVID impacts and supply chain issues to launching the highly-anticipated SD7 device and its associated accessories. Siyata Mobile also cemented several high-profile partnerships and collaboration activities with tier-1 global industry peers in 2021, which will not only increase the visibility of Siyata’s products but also likely help increase sales. The company laid an important foundation this year, which will set it up for strong potential growth in 2022 and the years ahead.
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