SMSI’s Safe & Found App: 100,000 Downloads & Counting

Long-time readers should note some significant changes in how I communicate in the public domain. The primary purpose of this forum is now to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

Accordingly, this document should not be construed as an endorsement or recommendation of the companies or securities discussed herein. I am not an investment advisor and this is not an investment thesis. It is merely one part of the story, which I present for debate in hopes of determining all risks and upside potential. The disclosure at the end of this piece is critical to understanding the content of this document. Further, I frequently trade my positions and may buy, sell, or short the securities mentioned herein at any time, regardless of the facts or perceived implications of this article.


Momentum appears to be building around Smith Micro’s (SMSI) Safe & Found product for Sprint. One of our readers shared a link to Android app data showing that SMSI’s product has now been downloaded over 100,000 times… and that’s just Andriod. I haven’t seen any iPhone data, but it should be in the ballpark (on an apples to apples basis).

Smith

FYI, my estimate is that Sprint has (had) about 350,000 customers on its old (Location Labs) family protection app. So, nice progress is being made with SMSI’s new app.

 

It should be noted that there are a fair number of bad reviews for Safe & Found. However, it should be noted that 1) there are only a few hundred bad reviews, which is low for an app with over 100,000 downloads, 2) I tested the app with a family and we came away happy / impressed, and 3) this is not the type of app for which happy customers leave reviews. In fact, we didn’t leave a review despite owning a lot of the stock! Perhaps I should remedy that…

 

Also, I spoke to the company last week and they are intentionally using the negative feedback as to improve the product. It’s actually common for app developers to let user feedback serve as their beta test. As long as most customers are happy, they can always fix the product (it’s just software) and go back to the unhappy ones with a refined product.

 

FYI, I believe that version 6.0 of SafePath is just a few weeks from release (June). You’ll notice, from the graphic above, that the Sprint version of SafePath (Safe & Found) is only on version 1.0.23, so they’re deep into the first version (thus the “.0.23”), but it’s still just the first version. We’re still in the early innings folks.

 

Crossing the 100,000 download threshold (on Android alone) is bullish for SMSI. It means they should be recognizing some meaningful revenue (which should show up in the Q2 results). It also shows that SMSI is firmly entrenched at Sprint. This correlates well with data points which suggest that Sprint will completely stop offering the old product in the late-May timeframe.

 

This is all bullish for SMSI.

 

Perhaps this is why the company is finally going out on the road to tell the story to institutional investors (next week). I believe that Chardon is playing a part in this road show, which could lead to an initiation of coverage. That’s just speculation. However, from what I’ve seen / heard, I’m very confident that new investors will be very interested in the SMSI story, especially considering the implications for its operating model.

 

This is why I’ve continued to add to my position on pullbacks.

 

My next post will review my notes from SMSI’s earnings call and my subsequent conversation with the company.

 

Stay tuned.

 

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Disclosures / Disclaimers: I am long SMSI. However, this is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.

I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.

I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

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13 thoughts on “SMSI’s Safe & Found App: 100,000 Downloads & Counting

  1. Thanks for the update, Mark. I do hate to disagree with you on your statement “this is not the type of app for which happy customers leave reviews,” since the old app has 24,000 reviews and the majority are positive (I know it’s a free app). I am glad that you were able to speak with SMSI and that they are using these feedback to fix their product. I am the type that reads the reviews first before downloading any app, specially if I have to buy it, so hopefully this will get better in the near future.

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  2. Mark, as of today we have 62% of the reviews on Android as a 1 star. comments and feeback is awful. (Apple APP is a little better reviews). I see this as a positive for the stock, because fixes and changes to the APP can only make it better.
    saying that, what are your thoughts on a market yellow alert OR even considering a red alert?? Thanks!

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    1. The number of reviews is minuscule as compared to the number of downloads. Also, the more recent reviews are much improved. The criticism seems to be narrowing to focus on minor (and very easy-to-fix) issues.

      As for the market, I announced long ago that I won’t be doing market calls anymore. My track record was very good (with the notable exception conveniently being the last one I did), but I’m narrowing my scope to focus on my strengths (and therefore my hit rate). This is to minimize the number of people who can possibly lose money from my analysis (which catalyzed my run-in with the SEC).

      Cheers

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      1. Mark,

        Not to stir up the pot or ignore what you just blatantly posted about not doing market calls, but some of us here are always interested in your personal opinion.

        Would you be able to comment on how much of your portfolio is hedged against the case of a flash fall or a big market drop?

        I understand if you can’t, but I always feel like questions like these are worth asking to look inside the mind of a seasoned veteran in this game.

        Thanks.

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        1. I’m heavily invested in the companies whose valuations I am most comfortable with. I’m confident in how they are doing and how much I’m paying for those businesses… very Buffett-like, in case the market does decline further.

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  3. Interesting, it looks like from this strategy you only go long on positions whose risk-reward ratio you’re comfortable with and otherwise basically hold in cash? I’m currently about 50% cash and 50% long. When you say 55% cash, are you saying that there’s 55% in your brokerage account that you currently haven’t invested, or are you referring to your other bank accounts as well combined?

    Like

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