Unidentified Analyst: I appreciate it and I guess the second part of the question is how long would you say it would potentially take to materialize an OEM contract? And how would you characterize your progress on that front? Thank you.
Anubhav Verma: Sumit, do you want to take that?
Sumit Sharma: Yes, I think as I mentioned earlier in the call. I think, we stay on track towards our 2023 goals. So, at this point I think it’s going to be in the transcript, right, pretty much we’re in the deep phase of negotiation and of course the timelines for the different these projects have already been established and it’s down to just the commercial agreement.
Unidentified Analyst: Got you. I appreciate it.
Sumit Sharma: It’s just as we mentioned in the past.
Unidentified Analyst: Cool. And I guess the very last question just switching gears a little bit to the non-automotive sector what type of demand would you be saying you’re seeing in the MOVIA sensor for verticals such as agriculture robotics and these have a shorter sales cycle and we’ve asked this a few times and we were wondering how you’re progressing with potentially securing partnerships with maybe trucking companies or related verticals?
Sumit Sharma: I think I’m going to take this one. So, if you think about strategic sales, I think trucking let’s put it over there in that strategic side, but if you think about just spot sales. If you have a segment or a market that does not see value in technology and they’re thinking that about you’re going to finance them with single-digit gross margins right. That’s fine. Others, our competitors can’t take over that business and drive themselves out of business, we’re going to focus on the market within that segment is a segment that really appreciate the technology what it could do for them, right? And they understand that with high reliability, right? It’s got the automotive great product that’s already qualified. It could be a sales safety product, right, which has got a $100 million with the market with some people out in the world.
These are real markets, right, where it’s not a flash in the pan. We’re choosing to focus on that because you can actually build a sustainable business a successful sustainable business leveraging what’s already been created on the MOVIA platform. So, yes, I think as we look at our guidance of course it’s always if you’re downgrading anything right you never want to disappoint people but at some point you take a look at it and saying is it a sustainable path that if we enter a market some robotics somebody talks about a — can we put it on some robotics that’s running around a little, a humanoid robots are running around that’s not a sustainable market and it’s the only way they can make their market is by having us not make any profit on their behalf and transferring wealth from our investors to them.
Yes, I think it’s better off that we don’t do it, especially in the current environment, economic environment the interest rates that high, it does not make the most sense for our investors. So, yes, we’re focused on it but we’re really looking at it turning every rock and understanding how is the business sustainable if you engage with them and we do want to grow right growth is important, you got to have growth to profitability, you can’t have growth with negative growth smart you and somehow magically turn the corner on the economy of scale issue.
Unidentified Analyst: Got it. I appreciate the insight. Thanks again for taking our questions and congrats again on the quarter. We’ll pass it on.
Sumit Sharma: Thank you for joining today.
Operator: There are no further questions in the queue.
Sumit Sharma: All right. So, I think before we move on to the next question, I just wanted to wrap up my comment on the demand environment. So, I think the way I think about this is LiDAR isn’t a product or is a technology that is going to be needed and at the end of the day it’s all about which company will be successful in building a business around a technology that is going to be ubiquitous and it’s going to be around for a very long time just like the airbags work, so I think it’s just about investors really trying to identify because I think look at the end of the day there won’t be 15 LiDAR companies standing in this industry because obviously that’s not — that’s not how any industry goes, so there will be consolidation but I think it’s very important for any successful LiDAR companies to make sure they’re building a business, which is sustainable with a cost structure that is scalable with a foundation that is easy to grow and not having to do the other way, which I think we have seen recently growth grew at all cost but we are way beyond past that era and it’s time that all companies realize that the path to good growth margins and a path to breakeven for a new technology like this is extremely critical for any successful LiDAR company.
A – Anubhav Verma: All right. So, next question, I think, we described in — MicroVision as operating primarily at Tier 1, why is that? Is that something you intend to do across all customers and products and is it to have something to do with manufacturing at et cetera, is that accurate? And we want to make sure we understand the business model and why MicroVision has chosen that route. And will MicroVision provide the recipe and utilize existing manufacturing processes by other companies to build products?
A – Sumit Sharma: Yes. We’ve raised quite a lot of money, including Ibeo, but MicroVision as well, to develop a great technology to get to this point. And that was done on the backs of our investors. Okay? The only way we can monetize that and amortize all that R&D, and of course show incredible input to the market that we create something really valuable is to sell something. You can’t do that without a license. So, you would have no choice as to enter this space and become a Tier 1. And that’s what’s required. Okay? Because the company long-term, even if you had millions of units a year of volume and it was a licensing model, everybody in this market will expect you to make a handful of dollars. You cannot even sustain the company that you need to do that.
On top of that, you would not be able to amortize all your investors have put in. They put in this for a high-growth company. Therefore, you have to sell something. And we’re going to sell LiDAR. And we’re going to make money on that one, right? And certainly show a business. And if you think about all the LiDARs that are going to go inside, our objective remains the same. Do I wake up every morning to just have single-digit growth? No, of course not. You want to be a dominant player in this market with a profitable business and get to like the 80%, 90% market share someday in the future. And you can only do that if you become a Tier 1 and you actually are willing to work with the partners, create supply chain, create the engineering discipline required, and you can deliver them the finished LiDAR.
It’s your core technology. You’ve hired the people. You’ve spent money. It’s time to give some returns. And that cannot be done by licensing. So, yes, we intend to stay as the ADAS Tier 1 partner to OEMs because we continue to invest in developing technology and doing R&D for what they need in our core technology area. And so therefore, we have to build a sustainable, business model that allows us to be around for a long period of time to enable them. And of course, this is the highest-end features that are going to new cars in the future, in the near future, right? And you have the core technology that’s required, and you’re the only one that’s scalable, and you’re talking about price points, ASPs, that are significantly better and charming to OEMs than any of your competition.
You’re at the right place at the right time, and you own your entire IP, and you have an extremely motivated and talented workforce. I’m pretty sure that many, many people on this call that would love to change places with me and to be managing that company because that makes your life a lot easier. So, yes, but it’s hard. You have to make sure some tough times to get to that point where you can take a breather, and they may not come for years, but you have to get through this, but you are going to have to make your own LiDAR. You can’t just think like, well, I’m just going to give it to somebody else. Even when you buy an iPhone, I mean, just look at the public phones for somebody like Apple. They have a significant team that actually does that, and they sell their phone.
