Hi Michael...
I don't think you can draw a comparison between airbag companies and Simula. The "airbag" is ubiquitous, but there is nothing unique about it. Hence, no material patent protection.
On the other hand, the ITS is patent protected, and the patents are very broad by indicating that they cover any tubular device that shortens while it inflates...hence we are in a unique position.
Although prices will certainly come down over time...particularly as volume grows...we will not have the myriad competitors that the majors have on regular frontal airbags which are now a commodity item. Accordingly, it is reasonable to project that pretax margins on this business will stabilize at more than 20% even 5-10 years down the road.
As I have always suggested, it was my hope that Simula could get 10% of the side-impact, head protection market. TRW has suggested that the size of the market may well be as much as $3 billion, and even the lowly piece I hoped for its a large amount of income if my margins are even in the ballpark.
Of course, it is not impossible to believe that we will garner a larger percentage of the market than my initial hope. Moreover, this says nothing about ITTR, which *everyone* connected with Simula believes will be a bigger product than ITS.
After all, two ITTR's can go into the back seat of any multiple seat car, and the product costs roughly the same as a standard seatbelt with a pyrotechnic pretensioner. But, and this is important, in frontal crashes that allowed for a test dummy to have 23 inches of forward head motion, the same experiment allowed for only 5 inches of movement for an ITTR confined dummy.
In my opinion, that can often be the difference between life and death...and as you know, there is no frontal airbag in the back seat, and no risk to the passengers (who will never be out of position if they are wearing their seatbelts) from an exploding airbag that pushes against a reactive surface.
I think Breed will be first to market with this product, as they need to differentiate themselves from the competition with new seatbelt technology. We will eventually get a goodly share of the market with this product, too, and at the moment....
...probably no more than 10% of Simula's owners even know what it is. Moreover, the investment community has never even heard of it, has never priced it into estimates, and doesn't even *think* about it.
When it finally happens and the world focuses on the technology, it will be a major league surprise.
Have a good evening. |
