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Adelaide firm's smart watch for kids taking off

Business

Adelaide technology company MGM Wireless is making strong in-roads into the UK market with its SPACETALK smart watch and app.

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Sales of the all-in-one children’s smartphone, watch and GPS device more than doubled to 25,000 in the six-months to December 31, compared with 11,000 in the same period in the 2019 financial year.

Sales of the watch’s AllMyTribe companion app, which allows parents to manage their child’s SPACETALK, see their child’s location and location history, are also now growing by more than $100,000 a month to reach more than $500,000 in the six-month period to December 31.

In a business update to the Australian Securities Exchange this morning, the South Australian company reported its total unaudited revenue for the first half of the financial year as $7.6 million, which is more than its total revenue for the entire previous year.

Australia and New Zealand sales of SPACETALK were 19,800 units in 1H FY20, up 80 per cent on 11,000 units.

But the latest sales spike has come from the United Kingdom where 5200 units were sold in the six months. SPACETALK was launched in the UK in May 2019 and is now sold through 100 Sky retail locations and online through Currys PCWorld.

In December, Sky launched an aggressive marketing campaign with television advertising, electronic and direct mail, instore displays and other marketing which drove higher market awareness of SPACETALK.

MGM Wireless CEO Mark Fortunatow said exceeding the company’s entire FY19 revenue in the first half of FY20 was an outstanding sales and trading result.

“We’re starting to see meaningful growth in scale with significant volumes in units and revenue,” he said.

“We’re accelerating momentum on our strategy of selling a high-quality, reliable children’s mobile phone in the fast-growing wearables category.

“In the western world, we are the market leader in this early stage of a brand-new retail category – children’s wearables – which is growing extremely quickly.”

Photo: supplied

Analysts Gartner anticipate that global spending on wearables will be US$52 billion in 2020, with smartwatches on pace to achieve the greatest revenue potential.

Fortunatow said negotiations for expanded distribution with more UK bricks and mortar retailers, and Australian and overseas mobile network operators were in progress.

He said Australian retailers JB Hi-Fi and Officeworks were actively promoting SPACETALK during this month’s back-to-school period, together with a television advertising campaign in conjunction with the Australian Open Tennis.

“The UK aggressive Christmas marketing campaign only began in mid-December (and) it generated tremendous volumes of sales for the two-week period prior to Christmas,” Fortunatow said.

“Our Australian and New Zealand operations have continued strong progress with sales up 80 per cent on 1H FY19 off a significant base.”

MGM Wireless, which was ranked at No. 72 in InDaily’s 2019 SA Business Index, was founded in Adelaide in 2001 and began developing applications for SMS communication in schools in 2002.

It went on to create the world’s first SMS based Automated Student Absence Notification Solution and is now recognised as a global leader and pioneer in socially responsible and technology-enabled school communication.

Its school communication solutions are now used by more than 1400 schools and 1.7 million parents.

The SPACETALK watch allows two-way 3G phone calls and SMS messaging to a parent-controlled list of contacts. Other features include GPS tracking to alert parents whenever children leave designated safe spaces, such as school or the home.

The watches sell in Australia for about $300 with the app available from Google Play and the App Store for a monthly subscription of $5.99 for up to 2 watches and $8.99 per month for up to 5 watches.

MGM shares were trading at $0.27 cents following the announcement this morning.

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