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FITBIT’S IPO A BIG SUCCESS: On Wednesday night FitBit announced its official IPO price of $20 per share. The IPO raised $732 million for the wearables maker, valuing FitBit at $4.1 billion. The stock then opened Thursday morning at $30.40 per share, raising that valuation to $6.3 billion. The stock closed Thursday trading at $29.68 per share, a 48% increase from its IPO price.
The company’s initial IPO terms said shares would be priced between $14-$16 per share, but those terms were updated earlier this week, raising the price to between $17-$19 per share. The updated terms also increased the number of shares it would offer from 29.9 million to 34.5 million in response to high demand from investors.
FitBit is the clear leader in the global wearables market right now, according to a recent report from the IDC. FitBit shipped 3.9 million devices in Q1 2015, more than 1 million more shipments than any of its competitors. The company sold more than 10 million devices last year, more than doubling the number it sold in 2013.
FitBit has also been hit with two lawsuits in the last month from rival wearables maker Jawbone. Jawbone claims that FitBit systematically sole confidential information by hiring away Jawbone’s employees. The increased IPO terms indicate that investors aren’t too worried about the lawsuits.
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NEST CAMERA LAUNCHES: Nest announced the launch of the Nest Cam, the first new product the smart thermostat company has launched since it was acquired by Google. The Nest Cam is the result of another Google acquisition: its $555 million purchase last year of Dropcam. The new camera is an updated version of Dropcam’s, with improved resolution and night vision, and can be placed around the home for security monitoring. The camera will start shipping next week and will be priced at $199.
Along with the new camera, Nest also announced a partnership with home insurers Liberty Mutual and American Family to give customers who own Nest products up to a 5% discount on their premiums. Nest also announced a new app that will allow Nest products to work together. For instance, if the Nest smoke alarm senses a problem, it can tell the Nest thermostat to turn off the heating system in case of carbon monoxide. Nest will be pushing software updates to its smart thermostats and smoke alarms for that integration. Nest’s smart thermostat and security camera give it a foothold in the two smart home product categories we think will grow the fastest: smart home energy and smart home security.
SMART METERS HELP CALIFORNIA ENFORCE WATER USE RESTRICTIONS DURING DROUGHT: Some California utilities are starting to roll out smart water meters to help enforce restrictions the state enacted in response to its extreme drought, WIRED reported yesterday. The new restrictions limit the days and times that businesses and residents can water their lawns. Traditional water meters can’t tell what time a business or home is using water for such purposes; they just tally up how much water is used each month. So local water utilities have been installing smart water meters at homes and businesses that have been reported for violating the restrictions. The smart meters can report water usage in near real time, allowing utilities to catch violators and fine them.
The article demonstrates some of the barriers that utility companies face in deploying smart water meters. Utilities usually deploy smart electricity meters to save money from sending employees to perform house calls, but the cost of smart water meters is sometimes too high to justify that savings, according to the report.
Utility companies also don’t have the IT infrastructure (such as data centers or networking infrastructure) in place to support tens or hundreds of thousands of connected smart meters.
This is forcing smart meter providers to build those resources themselves, according to the WIRED article. For instance, smart meter provider T2, which is piloting smart water meters with authorities in Long Beach, California, uses Verizon’s cellular network to circumvent the need for network infrastructure to connect meters. Their meters are also battery-powered, saving the utility the cost of providing electricity for them. And the Long Beach water department didn’t need to purchase servers to support the smart meters since T2’s solution is hosted in Microsoft’s Azure Cloud.
BI Intelligence estimates that global smart meter installations will grow from 59 million this year to 134 million in 2020, but we expect smart electricity meters to make up the bulk of those installations. However, extreme weather conditions like California is experiencing, and continued water crises in developing countries like India, could spur municipalities to install smart water meters in greater numbers.
GOGORO SETS PRICING AND LAUNCH DATE FOR ITS SMART ELECTRIC SCOOTERS: Connected cars are getting a great deal of attention right now, as they offer the chance to transform transportation in Western countries where cars and trucks dominate road traffic. In Asia’s dense mega-cities though, it’s gas-powered scooters, not cars, that rule the road. Taiwan-based Gogoro is trying to connect those vehicles while also driving down energy consumption in those heavily polluted megalopolises with its electric Smartscooter. Gogoro announced yesterday that it would start taking orders on for its Smartscooters – priced at $4,100 – in Taiwan later this month.
Gogoro’s scooters include 30 sensors that send diagnostic information to owners’ smartphones via Gogoro’s app and are powered by two 20-pound batteries. When the batteries run low, they can be swapped out at Gogoro’s smart recharging stations for fully charged batteries. Gogoro plans to place networks of its charging stations throughout cities in Asia. It already has 32 in Taipei, Taiwan’s capital city, as part of the pilot it’s running there. It plans to increase that number to 150 by the end of the year. The Smartscooter can travel 62 miles at 60mph on a pair of fully charged batteries.
Gogoro will need the infrastructure of battery-swap stations in place to expand to new cities. The Smartscooter is also more expensive than gas-powered alternatives, but the company says that over the first two years of ownership the electric Smartscooter costs less than some gas-powered models. Replacing the millions of gas-powered scooters on the streets of Asia’s biggest cities with electric ones would help alleviate the air pollution problems in many of those cities.
TESLA PARTNERS WITH LEADING BATTERY TECH RESEARCHER: Tesla might have drawn closer to its goal of replacing carbon fossil fuels with lithium ion battery cells this week. The company signed an exclusive agreement with Jeff Dahn, a professor at Dalhousie University in Nova Scotia and one of the world’s top lithium ion technology researchers, to apply his research to Tesla’s batteries. In exchange Tesla will provide financial support for Dahn and his team of 20 researchers. The partnership will start in June 2016, after Dahn wraps up another project he is working on.
Dahn will aim to improve Tesla’s lithium ion batteries in multiple ways, such as lowering costs to make Tesla products more affordable for consumers, increasing the amount of energy each battery can store, and increasing the lifetime of lithium ion battery cells.
Those last two objectives are particularly problematic. The easiest way to increase the amount of energy that can be stored in a lithium ion battery is to charge it to a higher voltage. But that decreases the battery’s lifetime. If Dahn can find a way to increase the energy a battery can store without decreasing its lifetime, it would make Tesla’s battery storage solutions more cost-effective for large-scale applications in energy grids and enterprises.
EXAMINING CLAIMS OF AN IoT BUBBLE: Apple cofounder Steve Wozniak made headlines recently warning investors that he thinks the Internet of Things market is in a bubble phase. The number of startups and solutions in the IoT market is growing fast, but it will take time for consumers to adapt to and trust some IoT technologies, such as self-driving cars, Wozniak explained. However, his claims of a full-blown IoT market bubble are overblown, according to a recent analysis from The Motley Fool.
The price-to-sales ratios of three IoT companies – Sierra Wireless, Skyworks Solutions, and Invensense – are nowhere near as high as the ratios of internet companies before the dotcom bubble of the late 90’s and early 2000’s, the article pointed out. Price-to-sales ratios compare a company’s stock price to its actual revenues, giving investors a sense of how the market views a company compared to its actual performance. The price-to-sales ratios of the three IoT companies over the last five years were a fraction of the ratios that companies like Cisco and Microsoft had during the dotcom bubble, according to the article.
The article also pointed out the error in talking about an IoT market bubble. The IoT market covers a vast array of industries and segments including healthcare, manufacturing, and defense, as well as consumer home appliances, cars, and wearables. Some of those markets will develop faster than others. So there may be IoT market bubbles in certain industries, but other industries will likely pick up the slack for IoT adoption.
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