Videos from the NCAP meeting in the tweet thread, and the ending crowns it all
https://twitter.com/MarKluft/status/1783148321772646625?s=19
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In addition to Velma, Martin is being pestered in his posts by Seeing Machines fanboys. This time, however, Martin managed to deliver a quite fitting jab. Seeing Machines shareholders have had very little to cheer about lately and have been celebrating BMW’s move to their camp for four years already. However, BMW already has a new generation coming in 2025, which I believe Martin is referring to in his post. As far as I understand, the DMS supplier has not been announced yet.
https://www.bmw.fi/fi/more-bmw/concept-cars/vision-neue-klasse.html
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By the way, what is the current situation in the competition with Seeing Machines? Back when the hype here was at its peak, everything about Smart Eye was considered superior. Is the forum still of the same opinion, or what changes have occurred over the last couple of years?
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Pipeline:
Seeing has 6 programs in progress, with a pipeline approximately 60% of Smart Eye’s equivalent ($366m USD vs. €575m). It is also possible that Seeing’s figure includes Guardian orders, whereas the Design Wins handled by Smart relate only to DMS software (not their AIS aftermarket product, which is an add-on option). Because of this, there is a possibility that the figures are not directly comparable and Seeing may be “dressing up” this number.
vs.
Off the top of my head, Seeing has been talking about 6 programs for quite a while now. I wonder if Seeing had the same number already 3–4 years ago. A program can be one platform with several car models within a specific OEM (practically GM) or several manufacturers. Personally, I’m guessing 1–2 manufacturers and six platforms in total.
Perhaps most importantly for Smart, the number of OEMs has risen steadily and is now 21. Each OEM has one or more platforms in the pipeline with Smart. An average of 315 design wins across 21 manufacturers already means 15 car models per manufacturer.
Aftermarket:
- Seeing’s area of strength. Based on the above, it is already installed in nearly 60,000 vehicles.
- Smart is only just getting started. This is an option on top of the basic DMS/IS installations.
Funnily enough, both manufacturers speak of a 40%+ market share in their latest reviews. But in my opinion, SEYE has a more convincing pipeline to support this.
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I just can’t get over this “clink-clank” Colin no matter what, my head is totally stuck with this “impartial” analyst: #automaker #ceo #ncap #nhtsa #iihs #technology #safety #aeb #dms #distraction #drowsiness #anprm #impaired #fmvss #drunkdriving | Colin Barnden
“For 2023, the leading supplier of NCAP compliant DMS is judged to have been Seeing Machines, well ahead of Smart Eye in second place. 2024 looks like a breakthrough year for DMS suppliers, with volumes rising through the critical 10% global fitment level, and a growing tailwind for DMS adoption from Global NCAP. Automakers need to consider their DMS partnerships and roadmap very carefully.”
"This new information again reinforces the point that "design wins" can be a highly misleading metric when used as a measure of market leadership, with cars on road proving much more reliable. OEMs can, and do, change their development plans. As previously observed, for now we will have to continue to review videos on YouTube as new models are released in 2024 and 2025 to find clues as to what is happening at Ford."
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I personally believe that Martin is telling the truth here, and therefore Smart Eye would be the clear market leader.
In my opinion, for one reason or another, this Colin doesn’t sound very impartial. There must be some reason why he completely ignores the message Martin is conveying, and otherwise questions everything the company says so strictly… does he do the same with the message from Seeing Machines? It seems to me that he doesn’t.
But in any case, we have the two market leaders here with a large margin over the rest. For instance, from Smart Eye’s perspective, I’d be perfectly happy with a market share of around 40% – even if Seeing Machines were to exceed that figure – and everything on top of that is a bonus. But indeed, if you believe Martin’s message at all, it would seem that Smart Eye’s market share could be as high as 50%. Time will tell exactly how this plays out – right now, however, everything looks good. I was a bit concerned by the news that Smart Eye lost their star salesperson – what will happen with future contracts? Although the cake is already “ready” for the coming years, so to speak, some extra decorations on top wouldn’t hurt.
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The importance of sales work was more pronounced in previous years when there was no mandate for this technology. Now, a mandate is coming first to Europe and later more broadly through NCAP / USA etc. The foot is in the door, and once the technology ends up on a platform, it will be there for the next 7-14 years without any sales effort at all.
Necessity is a good sales consultant. 
Smart also already has 300 people working globally. You’d think someone there would have the time to do some selling if necessary.
And this one analyst is still the world’s most biased unbiased researcher, who undoubtedly has their own financial interests either in the form of share ownership and/or royalties paid by Seeing.
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Seeing hasn’t announced any significant wins in a long time. It’s been very quiet in Seeing’s fan camp, and the share price has continued its long dip.
The game is certainly not over yet, as there will surely be tough competition for every big contract. Momentum and news flow have just been on Smart’s side for, say, the last year.
I don’t know how significant it is revenue-wise, but as a curiosity, one of Seeing’s DWs (Design Wins) was Fisker, which is in big trouble due to poor sales of the Ocean model.
PS. I agree with timontti. I would imagine that in the sales process of these complex technical systems, the contribution of a single individual is relatively limited.
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It would be useful if Smarteye would issue the number of cars hitting the road each quarter with Smarteye dms installed.
There is no other way to compare Smarteye and Seeing Machines in terms of real activity.
Smarteye must have this information and it would let investors know how things are progressing.
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I see this argument a lot from your camp. Why put so much focus on this particular measure?
I haven’t given it much thought, but sounds to me like it’s a measure focused on the present while the stock market is forward looking. The market caps of SEYE and SEE are not based on present sales, but market projections of how sales will develop in the future.
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But to be more serious, they have communicated for SOP;
- 40 models now, Hyundai leading the way with ramp-up being far away from its peak
- About 80 models by the end of 2024, USA/Japan/EU manufacturers will ramp-up during upcoming quarters
- Approximately 200 by the end of 2025.
This should be more than plenty of information for anybody to consider this as investment case.
Looking 3 years back, there is much more concrecy now. They can provide number of models in production for upcoming quarters whereas 3 years ago they just communicated the expected year for SOP. Things have truly picked up speed.
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Because it’s the only true metric that can be easily compared between competitors.
Design wins are useful for forecasting possible future market share and Smart Eye have done better over the last year or so in terms of new design wins. SEE did better in 2021 and early 2022.
But SEE have just announced a new win that starts production this year (rumours that this is taking some of Ford back off SEYE). It shows how quickly the landscape can change if they are able to get to SOP in a few months.
Also design wins don’t necessarily reach start of production (JLR?). If they do, the next generation might then be taken off one DMS supplier and given to the other anyway (like BMW from Smart Eye to Seeing Machines).
Also design wins are described differently by each supplier:
Smart Eye: “Estimated revenue based on forecasts of the estimated product life cycle”
Seeing Machines “Initial lifetime value”
so it’s difficult to establish a direct comparison.
Also each design win has a different number of cars according to make/model so it’s difficult to compare a BMW, VW and Ford design win (SEE) to Hyundai, Volvo and possibly Ford design win (SEYE) for example.
Cars on the road alongside profitability is the best metric for comparing DMS suppliers because it is a definitive number. SEYE reached 1m cars first but it looks like SEE might have overtaken. If SEYE’s design wins in 2023 reach SOP they might overtake again in a couple of years, who knows, but they might not reach SOP or they might run out of cash again? If this happens, the design wins are meaningless.
Of Smart Eye’s 315 design wins how many have actually reached start of production (genuine question because I don’t know)?
But there’s an argument that holding both SEE and SEYE is the best way to reduce risk and ensure success if both are saying 40% market share.
I personally only hold SEE, but I believe both will be successful because there are plenty of cars that will need DMS!
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The interim report is coming in May. Let’s list Redeye’s forecasts here. Not much else to do than hodl and yodel.
Snippet from Smart’s previous press release:
Current quarterly forecasts:
edit:
I double-checked Q1-2023, where Automotive sales were 13.7 million SEK. There is apparently a typo in this text; it should refer to the first quarter (“det första kvartalet”).
So Q4-2023 was about 30 million SEK
The guidance provided was that Q1 will grow slightly from last year’s Q4. Thus, for example, with that same 30 million SEK in sales, automotive growth would be about 118% compared to the reference quarter (Q1-2023). Let me know if you disagree with the calculations.
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I don’t disagree that both Smart Eye and Seeing Machines are experiencing positive growth.
I would, however, advise caution in believing everything that Redeye says. Both them and Smart Eye implied there wouldn’t be another fund raise and then they did one just a couple of months later.
Redeye also revised down their forecast a few days before Smart Eye’s results and then claimed the results were in line with expectations.
Redeye and Jesper both hold shares in Smart Eye.
It’s the same as Colin Barnden for SEE, his opinion and expertise is helpful but he probably holds SEE shares and therefore could be biased in his analysis.
I believe both companies will be successful. Quarterly KPIs from both companies would help to show the ramp up of DMS and whether both suppliers have been successful in reaching start of production with all design wins and who is ahead with actual cars and aftermarket connections. And of course the money flowing into the accounts will follow.
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I agree with you about RedEye, heck I even caught them doing unethical trading which seems to be in their culture
I think there is a culture among swedish private investors where they get annoyed when an analyst gives a negative recommendation. This was observed when finnish Inderes is expanding to cover swedish companies. An investmen bank such as RedEye giving super positive target prices and providing help in IPO’s at the same time… IMO you can see it clearly for example in using 11% WACC for Seye currently in their DCF…
Well you know.. they are part of forming the swedish culture
But knowing Seye is their biggest holding in Top Picks will at least keep them pumping Seye and I don’t mind as I"m doing my own analysis anyways 
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Smart Eye’s Director of Innovation and Partnerships, Detlef “deadlift” Wilke, is bullish regarding the widespread adoption of OMS and Interior Sensing solutions. They are now part of RFQs, and safety solutions are expected to be commonly seen in cars as early as 2026–2027, while entertainment solutions will appear even sooner, especially in gadget-oriented China.
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One good example of other technologies for IS / OMS purposes are players using UWB sensors (GHz frequencies). For instance, this Norwegian company Novelda, whose UWB sensor was in a couple of Lenovo models (Human Presence Detection) before Elabs presumably replaced them with software. Apparently, Novelda is also focusing on automotive.
https://novelda.com/news/noveldas-child-presence-detection-sensor-featured-in-wall-street-journal
Elabs, on the other hand, operates on ultrasonic frequencies (> 20kHz), utilizing the device’s existing speakers and microphones without a physical sensor. They could perform the same functions. It’s interesting to follow which technology will be used in the future. For now, cameras seem to be one clear option, as the market is still ahead.
The good side of ultrasound is that separate cameras, sensors, wiring, etc., are not needed for IS purposes – just software. The limitation, however, is that ultrasound “cannot see” things like seat belts, etc. Elabs still has a lot to do with laptops, so they aren’t even focusing on automotive.
This reminded me of Martin’s words in the brand-new annual report:
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Thanks for the link. This is a must-listen. I believe the IS market is a very good option on top of the basic DMS market. Their take rate is still hard to say.
I dug up the following from my notes:
- Potential size of the DMS market ~€250 - 300 million / year (if most cars were to use it). This corresponds to an ASP of about €5-10 for the DMS product. According to Seye, around €9.5 for early-stage premium models and “€5 would be most bearish” later on. But it goes without saying that in higher-volume models, the ASP will drop from that €9.5 over time.
- For example, 16 million cars in Europe with a €6.5 ASP makes the EU market size €100 million. This may be close to the truth.
- The IS / OMS market size is 2x DMS. Based on interviews with the company management regarding the first IS contracts, “initial signs point to 10-20€ for DMS+IS ASP”. This is challenging to say off the top of one’s head, but RE’s (Redeye’s) current assumption is conservative (they assume DMS+IS together will be ~€10).
- So, the combined DMS+IS market is ~€800-900 million / year if this were in the majority of cars.
The IS market could thus bring “one extra” multiple to the share price on top of these DMS expectations when it opens up. But this will take years, and it shouldn’t be taken for granted. In my opinion, there are more competing technologies available on the IS side (as I highlighted in the previous post). On the other hand, if SEYE / SEE has a foot in the door, it’s easy for them to develop an IS solution after the DMS. This is actually what SEYE said in the latest RE interview regarding the offering, meaning that development work had already been done together with an OEM, which enables a fast transition to production as early as 2025…
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