$349 gadget solves huge problem

But parents can keep in touch with their kids via call, text, or even view their location on a map in real-time like they’re waiting for UberEats with the Spacetalk GPS smartwatch.

MGM Wireless, the tiny Aussie company behind the $349 gadget, may have finally found an actual use for the smartwatch — keeping in touch with your primary school-age kids without giving them access to a phone.

“Responsible parents won’t give their children at that age a smartphone,” MGM Wireless chief executive Mark Fortunatow said. “Parents are more concerned about their kids using social media and YouTube than getting on drugs.”

After a soft launch in October saw 3000 units fly off the shelves, bringing in more than $1 million in revenue, MGM Wireless has now signed a deal with JB Hi-Fi to sell the Spacetalk on its website in coming days and likely in store before Christmas.

Originally founded in the early 2000s as an SMS alert provider for parents when their children failed to show up at school, MGM Wireless is now preparing for a major pivot, reinventing itself as a kids’ smartwatch manufacturer.

It believes the Spacetalk, aimed at four- to 12-year-olds, will be the next big thing in the $8 billion global wearable device market, with potential sales of up to $60 million, or 180,000 units a year in Australia alone.

“We’re the company that pioneered the use of that [SMS] technology in schools and that’s still very much the company’s business,” Mr Fortunatow said.

“But when parents get a message that their child hasn’t arrived at school, the very next question is, ‘Where are they?’ We’ve been trying to solve that student safety problem for a long time.”

Mr Fortunatow said the company had experimented with a range of solutions including apps, but none really worked properly. “Then (after) about four-and-a-half years we said, ‘Why don’t we come up with an all-in-one smartwatch, phone and GPS device?’” he said.

“You can imagine that was a ridiculously ambitious project to undertake, especially by an Australian company, but we found the right engineers to help us do that and worked away at it.”

The Spacetalk can make phone calls and send text messages, but only to approved contacts controlled by an app on the parents’ phone. Non-listed numbers are automatically blocked, and if anyone tries to contact the child’s device the parents are notified on the app.

Parents can also set up “zones” around schools, the bus stop or a relative’s house, for example. If the child leaves an approved zone, they are notified by an alert. “It’s a very, very responsible and safe device,” Mr Fortunatow said.

“It’s a means for parents to stay connected with their children and to keep them safe, and from the kids’ point of view it gives them a level of comfort to be more independent and confident to go out on their own and be kids again.”

Mr Fortunatow said parents were “raving” about the watch and kids were “loving it”. “It’s still early stages but the take-up is phenomenal,” he said. “The most important thing is what it doesn’t have — it doesn’t have any access to social media, YouTube, apps and the internet.”

Research firm Statista believes the global wearable tech market will reach $US5.8 billion ($7.8 billion) by the end of this year. A recent report by Gartner predicted kids’ smartwatches would make up 30 per cent of the market, compared with 21 per cent for the Apple Watch.

After a rough patch in 2016 saw sales of smartwatches decline for the first time, category leader Apple rebounded to sell 16 million units last year, a 60 per cent increase. Research firm CCS Insight estimated the mobile-enabled watches accounted for about one quarter of the tech giant’s fourth quarter sales.

The Spacetalk isn’t the only kids’ smartwatch, however. A number of Chinese manufacturers have developed connected watches, selling an estimated 25 million units last year, according to the same CCS Insight report.

But Mr Fortunatow said the Chinese models, which cost about $30 to 40, were “unreliable and not safe”. “We are particularly sensitive to privacy and security, so the watch could never be hacked,” he said.

All of the data from Spacetalk and the Allmytribe app ecosystem is hosted in Australia in “highly secure” data centres and protected by Australian privacy and data security legislation.

Mr Fortunatow said MGM Wireless was already working on the next versions of the device and was “expanding into a whole range of family wearables” including waterproof watches, home alarms and pet trackers, all integrated into the same platform.

The company forecasts revenue by the end of the financial year to be “significantly greater than the school messaging business”. Mr Fortunatow said the “stage is set” for MGM Wirless to become a major smartwatch manufacturer.

“We’ve funded the development and even the first-run manufacturing out of cashflow profits,” he said. “The company has been profitable for very many years, unusually for the tech industry we’ve been paying out dividends to our shareholders.

“We did our first capital raising for 11 years a few months ago to accelerate this to fund more inventory and advertising. We’ll be coming out with quite a significant advertising campaign setting the stage for Christmas.”

Shares in MGM Wireless have more than quadrupled in value since the launch of the Spacetalk, from 37.5c in November last year to $1.53 at the time of writing.

frank.chung@news.com.au

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