I recently asked Colin Barnden, Lead Analyst at Semicast Research for his views on Seeing Machines. I’ve reproduced my original questions and his reply in full, as his insights are worthy of a wider audience and deserve to be accurately reported.
Chris Menon: I’m very keen to find out what you think might be the likely valuation of Seeing Machines in the event of a takeover, if you’d care to speculate. Can it be likened to Mobileye in terms of its dominance of DMS? I’m also eager to know if you think there is much real competition? From what I hear Smarteye is a very distant second and its technology is in no way of comparable quality or reliability.
Colin Barnden: “I’m a market analyst not a financial analyst so the issues of valuation are out of my areas of expertise. That said, I don’t think there is a single financial analyst who could accurately value Seeing Machines (SM) as the company is active in so many markets and at so many points in the supply chain. SM also seem to be creating markets as they go along, which is highly cash intensive and has a long “time-to-money”. However get the strategy right and the rewards can be extraordinary. See Google, Facebook and Netflix as examples.
Mobileye is probably a good comparison to SM. Yes there is plenty of serious competition in DMS but what I see tends to happen in IP markets is that one company dominates and then everyone else is competing for what’s left. For example Mobileye has something like 65% of the automotive front camera market, with Xilinx the clear number 2. Which Tier 2 becomes number 1 for DMS depends largely on whether price or features matters most to OEMs.
I suspect it will be features…here is a document I have been reading that I believe pre-announces changes to vehicle legislation [for automotive] for the EU, to be made on May 16: https://www.governmenteuropa.eu/important-year-vehicle-safety-europe/84888/
My reading of it is that DMS becomes mandatory for all cars in Europe from 2020 and with a focus on both drowsy driving and distraction. That suggests camera-based DMS eye-gaze tracking for distraction and PERCLOS (PERcentage CLOSure) eyelid measurement for drowsiness. This is really complex to do well and not many Tier 2s can. The mention of an event data recorder also suggests a Tier 1 might go for a more complex DMS in order to save cost on the DMS/EDR combination. I also read into the announcement that alcohol impairment detection is likely to be a future feature for DMS.
I don’t cover trucks but the legislation there tends to front-run that for automotive by a few years. I really would not be surprised if DMS was made mandatory in Europe for all trucks and buses too, and to my knowledge SM is in a party of one for aftermarket fleet systems (with Guardian).
I’ll be watching on May 16 to see what the EU formally announces. If they mandate everything listed in that article, that would be a step change in road safety. In my view DMS will be the story of the 2020s, with autonomous driving not likely in any meaningful volume until the 2030s.”