- Pure play on Internet of Things Technology – IoT
- Buildout of Nationwide Network Starting
- Transition from a Technology play to Revenue Company
- Large Insider holdings and favorable share structure
With the explosion in the Internet of Things (IoT) there is sure to be disruption in the markets with new technologies. In the case of Gopher Technologies (GOPH) the disruption is actually “old” technology that is repackaged and optimized. The Company has taken “old” tech (Radio Technology) and fused it with new tech to create an ecosystem that could potentially build a network rivaling the nationwide cellular networks in a matter of years which has taken others decades to build. The big picture is that GOPH is in the process of building a nationwide or global network using the IoT but we need to separate out the grand vision with how they plan to do this. IoT is basically communication between “things” (=machines) that are used in everyday life like the smart phone, the thermostat, lights, locks, and even a coffee maker to name a few. Rob Lloyd president of sales and development at Cisco (CSCO) believes “as many as 50 Billion devices will be connected to the internet by 2020, creating a $14.4 trillion business opportunity.” GOPH is developing its own chip with endless uses in the IoT ecosystem and represents one of the purest plays in this marketplace. GOPH consider itself Native to IoT.
The Network Opportunity
As an investor you want to be invested in this IoT space because of the huge market potential and add to that a disruptive element and it will not be hard to see why Gopher Protocol has so much potential. Part of the potential lies in the genius of the lead engineer Dr. Danny Rittman, who worked in the IC design arena for many years and lead teams within prestigious corporations like Intel and IBM. The other part of the potential lies in the open architecture in the unlicensed spectrum that will usher in new innovation to this space. Rittman’s plan includes the manufacturing of a chip, he calls it the GopherInsightTM microchip that would eventually go into all cell phones that allows access to the IoT network using PRIVATE NETWORK with PRIVATE PROTOCOL that DOES NOT use conventional networks (WiFi and Cellular), though capable to use if needed or as needed. His dream is that this microchip will be installed on billions of mobile devices including phones, laptops, and tablets by the year 2020. Imagine being able to access this network simply by popping out your sim card and replacing it with the Gopher sim card and doing everything you are doing now but for an annual fee (no minutes or data fees). Conventional wisdom is that the more people that join a network the more coverage it can provide it and eventually can cover the all Earth….As Dr. Rittman once said, we will make your phone to a SUPERPHONE.
This is a very disruptive technology that flies in the face of conventional wisdom because the more people on the network, the more robust it becomes.
To truly understand the magnitude and network capability we need to explore what this network would look like and how realistic is this scenario. It is estimated that there are 224.3 million smart phone users in the United States alone. The upgrade cycles are condensing which has created enormous volume it’s hard to imagine, but Apple and Samsung are each selling about 70 million plus smartphones a quarter. According to Gartner 821,200 phones used a different Operating System other than Android or iOS. In the USA there are about 250 major cities over 100,000 in population. If you do the math this works out to about 3285 cell phones on a different OS per city. In a typical city of 500,000 people there are close to 100 cell phone towers in about a 20-mile radius but in this new network it puts 2.6 Gopher towers every square mile versus .08 cell towers every square mile and this doesn’t include any of the other IoT chips that may be in homes and businesses. The whole point of this exercise is show how completely realistic this private network scenario is, keeping in mind there is no reason why an Android or iOS user couldn’t pop out their sim chip and access the network. Imagine each cell phone as a mini cell phone tower. This technology is radio based connectivity with or without cell and GPS – patented integrated and self-learning – private secure network.
Table 2. Worldwide Smartphone Sales to End Users by Operating System in 1Q17 (Thousands of Units)
|1Q17 Market Share (%)||1Q16
|1Q16 Market Share (%)|
Source: Gartner (May 2017)
Gartner clients can learn more in the report, “Market Share Alert: Preliminary, Mobile Phones, Worldwide, 1Q17” and “Market Share: Final PCs, Ultramobiles andMobilePhones, All Countries, 1Q17 Update.”
There are 3 consumer products ready for launch using the Gopher protocol technology. Each product addresses a huge market opportunity. Keep in mind every one of these devices sold and activated will have a Gopher technology capable of sending and receiving a signal. So by launching these products the cars, pets, kids, and elderly all act as mini gopher towers in the network. By definition, the IoT is a network connected to a device or devices, but what Gopher is doing is truly revolutionary by creating a network of devices connected to each other. Before the Gopher launch, phone apps might control your thermostat, oven, door lock, and security camera. After the Gopher launch your thermostat, oven, door lock, and security camera just can become nodes on the Gopher private secure network when you drove your car into the garage with the guardian patch. The technology is integrated with self-learning allowing it to optimize for the signals available to communicate with other IoT devices expanding the reach of the network using radio signals. If you remember a scene from the science fiction movie V for Vendetta when Anonymous takes control of the airways and the billboards they would have likely used this type of network to do it. As people buy these consumer tracking devices the network builds itself. This network of the IoT is becoming a reality and is no longer a concept in science fiction or spy movies, but more important, the decentralized network is built based on its users, WITHOUT any central provider – This equate to REAL PRIVACY.
It’s hard to believe but every 45 seconds a car is stolen in the USA. When it comes to the automotive theft prevention, LoJack which is a subsidiary of CalAmp Corp (CAMP), is the first name that comes to mind. They have an installation and subscription based model with electronic integration connecting the police with your cars location. The installation runs $695 and special add on’s are almost must haves pushing the total over $1000. The Lojack emits a unique RF signal allowing police to find the cars so quickly. Lojack boasts a 90% recovery rate. Before Lojack was purchased by CAMP the company sales peaked close to $150 million annually. The company was under a lot of pressure from other stolen vehicle recovery devices. The worldwide market for vehicle security in 2015 was 6.47 billion and projected to be 10.75 Billion by 2021. Assuming a CAGR of 8.83% and a current worldwide market of 7.66 Billion there is no reason this products couldn’t capture at least 1% of the current market share in the next year equating to 766 million in worldwide sales.
The pet wearable market is also quite large and growing in part, due to the new technologies that track everything from pet fitness to pet emotions. According to Grand View Research, Inc. “the global pet wearable market is expected to reach USD 2.36 billion by 2022.” A staggering statistic from a National Humane Society report is that “10 million pets are lost each year in the US alone.” If you put these two reports together it’s not hard to see that a more robust tracking system is needed along with better adoption rates by pet owners.
Automotive – Guardian Patch is essentially a sticky patch with a one-year battery and tracking technology that is designed to affix to your vehicle. This device allows 24/7 tracking and when placed in a discrete location would allow you with the help of the police recover a stolen vehicle even if it was in a remote location due to its ability to track without GPS or Cellular network. The Guardian Patch once affixed to the intended object doubles as an emergency beacon if you tear off the patch off the object. Each Guardian patch has a unique identifier that when activated can be tracked using your phone application. The application is available in Android and Apple and can be downloaded under GuardianPack. There are many GPS trackers in the marketplace but what sets the Guardian Patch above the rest is primarily range but the price is also very competitive as well. Due to it triple redundant technology only Lojack can compete in terms of range. Guardian Patch is more consumer friendly however because you don’t have to have your car stolen to find out where it is. The phone app allows instant monitoring and will actually alarm you if your car is moving while you are shopping. The app also monitors the battery life so if it needs replacement there is ample time to do so. From an investor perspective what is so novel is that this tracker has a disposable price of $40 and needs replacement every year. Although there is no subscription, this could develop into quite the recurring revenue stream.
Pets – The First product to launch the Guardian Orb is one of the most robust long range pet trackers to hit the market that is the size of a walnut and easily attaches to a dog collar. What makes the Orb stand above the competition is that it can pinpoint pets via radio waves, in some version even using Bluetooth. There are holes in every network but this redundancy is truly revolutionary with no dead zones. This is the same technology that allowed researchers for Decades to track endangered animals and even works underwater. The Orb works for about 4 weeks and can recharge in just an hour. One groundbreaking feature is that the application also checks for battery life in the Orb and alerts you to put it on the charger so your pet never goes without protection. This is the first consumer product to launch and it will be available on Indiegogo platform certified by Arrow Electronics a fortune 500 company. If you visit the Indiegogo website, the starter package is $118 and Arrow Electronics (ARRW) has given its seal of approval regarding the electronics architecture. This is a starter price for early adopters, but once production begins retail pricing will be much prices will me much more favorable. This chart highlights the comparisons.
Children/Elderly – The Guardian Bracelet will be designed to be worn on children and elderly and allow personal tracking. No longer will parents or caregivers every have to worry about losing their loved one. The bracelets will be designed to be rechargeable every week and will have a similar form factor at Fitbit (FBIT).
The company’s CTO Dr. Rittman was well known for ushering in a new paradigm in processors back in the mid 90’s with him being part of the development of Intel’s advanced microprocessors family. Now his life’s work has culminated in the creation of an intellectual property portfolio that includes smart microchips, mobile application software and supporting cloud software for data management. All rights to this IP reside in GOPH. The licensing opportunities are enormous just looking at the size of the IoT market. The low hanging fruit is the tracking market, but next would be tele communications and consumer electronics markets. Partners could include QUALCOMM (QCOM), Apple (AAPL), Samsung, and Sony (SNE) to name a few.
Favorable Share Structure
The Company has a tightly knitted shareholder base of only 61 shareholders of record. In the past year the highest volume on record was a hair under 300,000 shares and it almost doubled in value on that day which demonstrates that the float is a lot tighter than the reported 5,240,349. Based on trading patterns the float is closer to 600,000 shares. There are 50,795,372 shares outstanding but fully diluted the share count is 114,672,079 which represents a market capitalization of $40.14 million. The CEO and CTO combined currently own 46.82% of the common stock. In the capitalization table there are potentially 66,000,000 of Series D Preferred shares owned by private company. Sales momentum or strategic announcements could really have a profound impact on the stock price.
Putting a fair value on a disruptive technology is often very difficult until you put it into the perspective of what it’s replacing. It’s not hard to imagine that Gopher Protocol’s new chip could create a network the size of T-Mobile US Inc. (TMUS) in 3 years. The network grows as the number of phones grow instead of the number of towers.
Investor’s must ask what is the appropriate discount to TMUS’s $53 billion market capitalization. Verizon Wireless (VZ) has the largest network in the USA and has close to a $200 billion market capitalization but has taken decades to build. A small chip adopted as a standard on every cell phone manufactured is can turn this concept into a reality. If a large hardware manufacture such as Qualcomm (QCOM) were to license this technology news would reverberate worldwide as all carriers scrambled to deal with the new paradigm. This is the most disruptive technology to hit the telecommunications market since unlimited calling plans.
The system contemplates the creation of a global network. Gopher believes this will be the first system that is developed using a human, artificial intelligence-based analysis engine.
Since the core of the system will be its advanced microchip that will be able to be installed any mobile device, worldwide, Gopher believes that this will result in an internal, private network between all mobile devices (Smartphones, Tablets, Laptops, etc.) utilizing the device, as well as stand-alone products, such as IoT (‘Internet of Things’) devices, like cars, and wearable consumer technologies, by providing mobile technology for computing power enhancement, advanced mobile database management, as well as robust information-sharing functionalities and additional mobile features, even without the need for internet connectivity.
As an investor, you want to be invested in this space because of the huge market potential and add to that, GOPH’s disruptive element and it is not too hard to see why Gopher Protocol has so much potential.