Summit Wireless (WISA) Stock: The Streaming Video of Home Audio

Summit Wireless Technologies WISA Stock News

It seems like just last week that when I wanted to watch a movie, I’d put a cassette in the VCR and enjoy. Soon, movies started being burnt onto discs, improving quality of video, storage space in living rooms around the world, and providing the convenience of not having to rewind movies when they were over. Today, we hit an app on our TV or phone to stream a movie onto the screen beautiful.

While the visual aspect of home entertainment has changed greatly in recent years, sound has not. As the latest and greatest televisions focus on picture quality, sound is falling off of the face of the earth. Slimmer televisions leave little room for quality sound, cell phones’ only option is low quality Bluetooth or ear buds, and surround sound systems are difficult and/or expensive to install. 

This is where Summit Wireless (WISA) comes in. The company is on the leading edge of the next wave of home entertainment innovation. Let’s call it the sound wave. 

What Is WiSA?

WiSA, developed by Summit Wireless, is a patented immersive sound protocol. . The technology gives consumers the ability to set up immersive sound systems in their living rooms in minutes, a move that could change the shape of home entertainment. 

When setting up a WiSA-enabled  sound system, there are no wires, no holes to be drilled, there’s no real work. Instead, the entire system is plug and play. Simply connect WiSA enabled speakers to WiSA Ready devices and enjoy. 

Patented Technology Eliminates Latency

When I first came across Summit Wireless, one of the first questions that came to mind was, “Why not just use bluetooth speakers?” Ultimately, there are tons of bluetooth options on the market that I thought would do just about the same thing. In fact, I went on the search for bluetooth options and even decided to purchase a wireless surround sound system. I thought I would love it. Ultimately, it was returned. 

The big issue with wireless surround sound became blatantly obvious to me when I sat in the recliner with a bowl full of kettle corn and pressed play. It was like watching a movie in a different language. The latency in sound was so bad that lips were moving but the timing of the sound simply didn’t match. 

WISA has changed all that. The company’s patented technology all-but eliminates latency,  or the delay between seeing and hearing the video. The average human can easily notice 50 milliseconds of latency delay. Dolby digital audio has a goal of latency in the 20 millisecond range. Audiophiles want their products to come with latency at or under 15 milliseconds while gamers look for latency under 12 milliseconds to give them the competitive edge. 

WISA’s technology goes far beyond even what gamers are looking for. The innovative system reduces latency to about 5.2 milliseconds. That blows the 50-150 millisecond latency that we see with bluetooth completely out of the water!

Innovative Technology Leads To Big-Brand Awareness

About a year ago, I took a look at Summit Wireless and was impressed. The idea that quality immersive sound could be set up in minutes was hard to ignore. As a movie buff, I saw incredible value in this. Apparently, I’m not the only person that felt this way. 

The innovation that led to WiSA technology is catching the attention of the world’s biggest brands in entertainment. Brands like Harman, a Samsung Division, LG, Klipsch, Savant, Sharp and several others have already started to incorporate WiSA technology into their products in an effort to lead their competition with better products using WiSA. 

The Turning Point for WISA Is Upon Us

Going back to the streaming video comparison, we’re talking about a technology that seemed like it took off over night. However, the technology was around for years before it was used in anyone’s living room. Ultimately, it wouldn’t have taken off at all unless big brands in entertainment adopted it. 

That’s where we’re getting with WISA. In fact, the company just made took what I believe to be the biggest step in its history, and it’s all thanks to LG. LG announced that its OLED and NanoCell televisions, the top of the line products in its lineup, are WiSA Ready. 

This is incredible for Summit Wireless and its investors. We’re not talking about a small, off-brand company with little market penetration. LG televisions are sought after by entertainment buffs around the world! In fact, the brand is sold in just about every big-box store that sells televisions around the United States and various other regions. 

To put this into perspective, LG believes that in the year 2020, it will sell 5.5 million OLED televisions Nano cell TVs add another 10M TVs for an estimated 15+M LG WiSA Ready TVs in. 

This means that in the year 2020, about 15 million consumers will purchase WISA branded TVs through LG alone. The implications when it comes to sales here are incredible. Think about it, if you just spent $5,000 or more on a television and saw a WiSA logo on that television, wouldn’t you want to look up WISA and see what it’s all about? Moreover, once you did, wouldn’t you be willing to spend between $600 and $900 on WiSA certified speakers to match fully immersive sound with your new, top of the line television? I know I would!

Importantly, the entertainment industry is incredibly competitive. As LG competitors see that LG is successful with its WiSA Ready televisions, there’s a strong chance that other brands, big and small will be racing to jump on the bandwagon, and that’s a trend that we’re already seeing. 

When WISA first launched its IPO, the company had 2 television manufacturers as partners, and about 30 partners all together. Today, about a year later, the total partner figure has doubled to more than 60 partners, 7 of which are television manufacturers. Considering the adoption of this technology since the company’s IPO in July of 2018, the technology is quickly taking the market by storm. 

Turning Partners Into Revenue

Through the growth of television manufacturer adoption, since the WISA IPO, the amount of WiSA Ready televisions on the market has exploded. In just over a year, the market opportunity has grown from 3 million units to 20 million units. So, what does that mean for WISA?

A quick look at the company’s investor presentation shows that with an estimated 20 million televisions being sold per year, itsSAM (Serviceable Available Market) of about $45 million! Moreover, as adoption continues to skyrocket, the potential revenue will only grow. In fact, when there are 30 million WiSA-Ready televisions on in the market the company’s SAM will be about $67 million.. That’s a number that’s hard to ignore. 

Importantly, the numbers above are pulled directly from the company’s investor presentation, which I believe is quite modest. The truth of the matter is that in general, about 25% of consumers who purchase a television will match it with a sound system of some sort. 

However, these figures include people purchasing a wide range of televisions. In my view, consumers purchasing higher end electronics, like those that are WiSA Ready, are more likely to match television with sound. In my view, about 40% or more of these consumers will do so. 

Importantly, WISA only accounted for about one out of every five consumers that are likely to purchase a sound system along with a new television in their figures, as there are other options. However, when a consumer purchases a WiSA Ready, LG television for thousands of dollars, that consumer will see the WiSA Ready logo in the corner of the television right next to the HDMI logo. 

This is key. Essentially, consumers of high end electronics generally want to couple their electronics with others that are designed for synergy. So, I believe that about one half of those who purchase a sound system with their new WiSA Ready televisions will be purchasing WiSA enabled speakers. 

With that said, if my predictions are correct, the market  opportunity could grow to be worth $180 million annually by as soon as next year. Now, I know that’s an aggressive figure, but based on the demographic of consumer that will be purchasing WiSA Ready televisions and the growing list of high-end audio options that are WiSA Enabled, I believe that this aggressive approach is justified. 

The Investment Opportunity

Imagine having the opportunity to invest in Netflix or Hulu just before they became the cornerstone of global home entertainment. In my view, this is exactly the type of opportunity that’s offered up by WISA. 

For several years, technology innovators have been looking for ways to create quality, wireless surround sound, but have largely failed. Bluetooth is the only real option outside of WISA, but due to latency issues, this option is very impractical. 

By creating an innovative, practical solution to the problem of sound falling behind while innovation takes place in video, WiSA has captured the attention of some of the largest brands in the world. As these brands roll out products, more brands will likely want to get involved, leading to a shift in how we hear movies, games, television shows, and more. 

Ultimately, investors have an interesting opportunity here. WiSA immersive sound is likely to take the market by storm, and while it has done well with partners, it isn’t the industry standard yet, making an investment at this stage relatively cheap. Should my expectations come to fruition, this will not be the case for very long. After all, once WISA does become the cornerstone of the sound side of home entertainment, the market will see its real value, allowing those that got in at this stage to generate incredible profits. 

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The author is not an investment advisor or broker dealer. CNA Finance, parent company to Alpha Stock News, was paid ten thousand dollars to provide thirty days of research, writing, publishing and other digital investor relations services throughout the month of October 2019.

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