Greetings @JNivala,
tough comments and difficult questions, to which you will now only receive quick comments.
Then our views are now aligned, even though we were far too bullish on this back in the day. Now HOME is a niche product that is growing in forecasts, but will never truly break through. Of course, there is an option for this through the current care guideline change, but it’s not worth holding your breath while waiting for it.
However, it is not an irrelevant product in Revenio’s size class, as the turnover is not huge. The market size, in my opinion, is a theoretical exercise at this stage and can safely be cut in half, and it has no practical significance.
I don’t have anything compiled, and I don’t have the capability to compare the quality of different technologies with any great certainty. Of course, I have some (company-independent) contacts in the industry, so it’s not just based on my own education or the company, but that doesn’t make me an actual expert. You can ask AI about technologies, and it will give a long list, but these devices are not based on just one thing; there is usually a list of features. So it’s not a clear and simply expressible matter like with tonometers.
However, the good thing about a market economy is that ultimately the customer decides which device or technology is the most competitive in terms of price/quality ratio - and I am sure that iCare’s imaging devices have grown significantly faster than the market since the Centervue days, meaning they have gained significant market shares. This is not only based on our uncertain models, but also on industry studies and Revenio’s own comments. They don’t report these or give figures, but they did open up this much at CMD (Imaging).
Of course, it could be that the technology is mediocre and the competitive advantage lies in sales, marketing, or manufacturing. But since the gross margin seems to be rising (not selling by pushing prices down), my interpretation is that things are in order on the quality side. It is also practically known that the DRSplus and EIDON product families have sold well, and others are rather curiosities in the big picture. Price is also an element in both. Imaging devices are starting to be capital goods, and prices also matter.
That’s exactly right. For example, DRSplus is, to my understanding, priced lower than competitors, even though it is a high-quality device. So it does the same things as competitors’ devices more cost-effectively. I apologize if this was not clear from the report, but this is not “premium-priced” relative to competitors - although there are different features and bells and whistles in these, which makes it difficult to compare apples to apples.
Still, the margin levels are excellent, so something is being done right here. A technological competitive advantage can also mean that the devices are designed smartly and are inexpensive to manufacture. Then, if there is a real “market fit,” it can ultimately be a strong competitive advantage for years, because a new device is not brought to market immediately (product development and regulatory approvals inevitably take years). Generally, one could say that in Finland, too much focus is placed on “technology” and too little on whether the product or service offers the customer the best solution to the “problem.” Not everything has to be technologically the best to be a winning solution.
Competitive advantage is a tricky term, as it can mean almost anything. If a business grows significantly faster than the market for years and does so with better margins than the industry, I would consider it a strange conclusion that it does not have a competitive advantage. If we are talking about sustainable competitive advantage, then we are in complete agreement - there is none. Of course, there is also the eternal discussion about what is truly sustainable - if we are critical, they are rare for any company. I would summarize by saying that I see a competitive advantage in imaging devices in the medium term due to a competitive product portfolio. In five years, the situation may be completely different, but I do trust Revenio’s ability to navigate these waters.
And I could be very wrong too 