Neonode Inc. (NASDAQ:NEON) Q3 2023 Earnings Call Transcript

Please stop the vehicle. So, there is where we see our chance. And indeed, some OEMs are going in this direction. And because they want to achieve a different look and feel of the interior of the vehicle, they want to use the space differently, and, of course, it has to do with electrification. So, when you go to a fully electric vehicle, they want to also experiment. And there is this company, Tesla, that has sort of triggered a little bit this. So now, everyone is thinking about the interior. We don’t need to do in the same way as we always done it. And I believe that this is also very much driven by cost. So I give you this as a final comment that there’s been a trend for 10, 15 years towards bigger and bigger screens. You talk about pillar to pillar displays in front of the driver and passengers, and, we have some examples from Chinese OEMs and so on, massive curved displays and the high resolution color displays with touch features.

They are very, very costly. So, a way to break that cost spiral and complexity is to simply move into head-up displays altogether. And obviously, that is much more cost effective for the manufacturers than competing with bigger and bigger screens. So, let’s see how this plays out. But automotive is a very dynamic industry. But in the end, everything takes quite long time. So, we have long sales cycles. Then you have a development phase of two, three years. And then the new solutions are launched into production. And this is where we can then start to get royalties. But automotive is a very important, let’s say, industry or sector for us, and we have been active there for at least 11 years, since 2012, it was the first automotive product developed with Neonode Technology.

And to date, we have licensed our technology to more than 7.5 million vehicles, closing up to 8 million. And going forward, we hope to increase that significantly with the DMS offering and also other offerings like this Head-Up Display Obstruction Detection.

Jesper Von Koch: And then also one question for you Fredrik. I mean, you are kind of — like, it seems that you’re changing focus more and more towards the automotive industry, perhaps less so in the product sales. How does this affect your cost base, like, part now, but also going forward, if I can, what do you see?

Fredrik Nihlén: Well, we see that we’re focusing our current business towards automotive. So, it’s not that we are growing our cost base. It’s that we are refocusing our cost base and looking for that in the future. But, of course, if we get some good news out there, we need to also expand on that sense.

Urban Forssell: Yes, for the engineering part of the implementation.

Fredrik Nihlén: Yes.

Jesper Von Koch: That’s all of my questions. Do we have any other questions from other analysts? No. We have we have no other questions. Thank you so much for coming here, and good luck going forward.

Urban Forssell: Thank you.

Fredrik Nihlén: Thank you.