Special Report: The company is building momentum in key markets with its patented “Halo” mobile data-transmission technology.

Elsight (ASX: ELS) has just wrapped up roadshow in Australia, meeting customers and updating investors on the near-term outlook.

With product development now close to completion, the company is making inroads with a number of multinational customers in the global market for original equipment manufacturers (OEMs).

Key OEM markets include drones, tablets, mobile defence technologies and connectivity for smart cities (eg automated street lights).

Research from Goldman Sachs shows the global drone market alone is expected to be reach $145 billion by 2020.

Elsight is now executing on a strategy for Halo to become a core manufacturing component across the full spectrum of global equipment makers.

Halo offers an enhanced method for users to send and receive data and HD video over cellular networks. Instead of relying on one network, the technology allows for data and HD video transmission across up to four different channels.

That capability provides levels of speed, reliability and security that are unmatched in the market.

“It’s applicable for video streaming and sensor technology, as well as two-way communications,” Elsight CEO Nir Gabay explained.

“So we can collect the data, encrypt it, stream it and resend it – all within 200 milliseconds. That’s one of our biggest advantages compared to any other system.”

And perhaps most importantly, it’s packaged within a device the size of a credit card, allowing for simple integration in the device-manufacturing process.

Multiple markets

Speaking with Stockhead, Gabay highlighted that Halo has applications across multiple verticals, which leaves it well placed to capitalise on a number of different market opportunities.

To highlight how the product can be rolled out at a mass scale for a leading multinational company, Gabay cited Amazon as a key example.

“They have to control thousands of packages via drone. But if they only use one network, what if the drone hits a blind-spot on that network mid- air? You’ll lose connectivity.”

“Secondly, another party could hack the drone, so it requires high security levels. Halo solves both of those problems and its size allows it to be incorporated into the drone manufacturing process on a mass-scale.”

Halo also helps “avoiding transmission failure, by providing enough data redundancy and it enables users to controls hundreds of drones at a time.”

Gabay then discussed the huge potential market for mobile phones and tablet devices.

“With our phones we are all aware of the critical issue of battery life. Similarly, those of us who own or toy with small drones are also aware of how sensitive these small machines are to any additional weight.”

“The key engineering feat with Halo is that in one tiny and miniaturised piece of equipment, we were able to rectify all that and more. We extended our battery life by dramatically reducing Halo’s power consumption. We improved Halo’s heat index and got rid of the cooling fan.”

“We also shrank the Halo device’s weight and size to enable its installation even on the smallest drone – and as our engineers made it smaller, they also dramatically reduced its production cost and therefore the consumer’s price as well.”

“One may say that with Halo you get the best benefit-cost ratio (BCR), and all packaged with a user-friendly interface. It’s going to be a huge market — we have the solution now and there’s no competitor in the space,”  Gabay told Stockhead.

The company is targeting major customers across electronics, defence and logistics.

Commercialisation

Elsight is now making serious headway in commercial discussions with a number of multinational companies in the OEM space.

Management recently attended the Mobile World Conference in Barcelona which resulted in more than 200 potential leads.

Elsight has also held discussions with the biggest ruggedised tablet manufacturer in the US and is leveraging opportunities in Singapore through Khoo Boon Hui, the former chief of Singapore police who sits on Elsight’s advisory board.

Through that network the company has access to top management at some of the biggest listed companies on the Singapore stock exchange, which is weighted towards engineering and manufacturing companies.

Looking ahead, Elsight expects to establish proof-of-concept in the September quarter across all of its key verticals — drones, ruggedised tablets and smart cities.

So, with some exciting market announcements in store, Gabay said that will translate into revenue-generating deals by Q4 this year.

“There’s no other ASX-listed company which has this kind of exposure to the future of global manufacturing, which is OEM devices,” Gabay said.

“For an Australian company to be talking to the biggest OEM’s in the world is incredibly exciting.”

This story was developed in collaboration with Elsight, a Stockhead advertiser at the time of publishing.
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