Spacetalk shoots for the moon after deal with Telstra, share price rockets 70pc
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The share price of wearable tech company, Spacetalk (ASX:SPA), has skyrocketed today by almost 70 per cent after it announced a distribution agreement with Telstra.
The deal allows Telstra to sell Spacetalk Adventurer devices across its 19 million-plus retail mobile services, and retail stores all over Australia. Telstra is currently conducting exhaustive testing on the device, and is targeting a launch in April this year.
Spacetalk Adventurer is a 4G mobile smartwatch, and GPS Tracker made for children. It connects to the Spacetalk app, allowing parents to keep in touch with their children featuring various safety modes.
The Adventurer device is reportedly the market’s number one-selling kids device in the category, and since its launch in December last year, has accounted for nearly a fifth of Spacetalk’s sales.
The Telstra deal today will include a joint marketing effort, where 100 self-nominated staff members will be trained as experts on Spacetalk products.
The devices will initially be available for purchase on a Telstra hardware repayment option, where Telstra customers can add the Spacetalk device to their Telstra account and pay for it on their bill over 12 or 24 months.
Spacetalk’s sales have soared online since 2007, which have been boosted exponentially by major retail deals the company has forged in Australia, UK and New Zealand.
It recently signed distribution deals with the likes of JB Hi-Fi, The Good Guys, Officeworks, and Harvey Norman. It’s also signed on with mobile operators like Vodafone, as well as Amazon UK.
The company is betting on the increasing, yet under-served market for wearable gadgets. According to company figures, the total addressable population in the UK and ANZ is 60 million kids and 85 million seniors. Out of these, the penetration level for smartwatch devices is currently only 12% for adults, and 5% for kids, with seniors even lower.
It expects this penetration to grow by 15 per cent over the next five years, with smartwatches the fastest growing category.
Spacetalk was founded in 2001 and listed on the ASX in 2003 as MGM Wireless Limited.
Its share price has more than doubled over the last year (including today’s surge). The latest report for the half shows that revenues have increased markedly, rising from $7.6 million to $8.25 million, for a net loss of $0.62 million.