If the vendor TAM (Total Addressable Market) were in the range of $300m, as has been estimated (DMS + IS), then it is far too small for any Tier 1 or similar player to justify developing their own solutions from scratch. Denso, for example, had something, but as we’ve seen, older Toyota cars had (presumably) issues, and newer ones are incorporating systems purchased from, for example, Smart Eye…
From a Tier 1 perspective, it requires long-term expertise as well as data, etc.
So, this is a niche market, which for a small-cap investor is a very favorable situation if the market has a dominant player with high margins and strong, scalable growth. IMO, it’s hard to beat that starting position.
The automotive design win structure also provides visibility into cash flows for 5–10 years ahead, meaning the DMS market has effectively already been divided in recent years.
PS. I don’t see the growth ending with the arrival of SAE level 5 cars, because the car still needs to be aware of the passengers’ status throughout the cabin. Granted, there are more competing technologies on the IS side.
PS2. As we know, SEYE (Smart Eye) was itself involved in providing information to EU legislators, and as I understand it, they have supplied the equipment used to perform GSR-compliant DMS approvals as part of the type-approval process. All car models are, as far as I understand, tested for DMS, though I am not familiar with the specifics of the process. News about the evaluation equipment supplied by Smart Eye has been linked here in recent years.