Urban Forssell: That would be to disclose too much.
Jesper von Koch: Okay, okay. All right. And also for the head-up display, is that — like, yes, what’s the status there, if you compare it, like the timing of RFQs for that compared to like driver monitoring systems?
Urban Forssell: It’s driven by a few premium vehicle manufacturers that are going — betting hard on head-up displays in the future. And they’re looking to change the cockpit inside the vehicle, and having maybe less of the traditional instrument clusters and big displays, but instead having more — all the information projected onto the windshield in different types of arrangements, but some will project more in the field of view, some at the bottom of the windshield. And if you then remove, as some of these OEMs are planning to remove the traditional instrument cluster, to free space in the passenger compartment and also design issues, I believe and third, to save cost, they need this type of feature that we are working with for safety reasons and to fulfill all legislations of general safety regulation, the EU and similar regulations in both China and U.S.
Jesper von Koch : All right. And can you say anything about the prospective, like average selling price per vehicle for that kind of solution?
Urban Forssell: In our case, we talk about technology licensing. And we have significant revenues from automotive customers today with our zForce platform. And indeed, this will be another application of zForce. So we talk about some dollars per vehicle. And that’s very, very interesting, because often in automotive, the programs run in very, very high volumes. So we hope that this will significantly contribute to our future license revenues. But of course, there is a fairly long now sales development and launch cycle that we have to work through. And everyone should be aware of this that we are perhaps talking about 2.5 to 3.5 years until we get additional license revenues from these type of projects.
Jesper von Koch : So possible revenues around like late 2025, 2026, something like that. All right, good. I mean you generally speak with quite a high optimism about 2023, like ramping up revenues and so on. And also in our last conference calls you anticipated that you will use your inventory that you had then for the next like 16 to 24 months.
Urban Forssell: We talked about components inventory.
Jesper von Koch : Yes, exactly. So, how do you see 2023 like rolling out sales wise?
Urban Forssell: In our products business, we certainly think that we can do much better than the previous year, which was indeed quite similar to the year before. So, we are optimistic and we are confident that we can start to see some steps forward. We have also decided to develop some new product variants to broaden the portfolio, because we think that we have established now some good sales channels in different markets that we can use to sell additional products through the same channels, sometimes our direct sales efforts or via partners. So we are doing different steps here every week basically to try to drive sales, both of the existing products and of new. So — and we have to we have to improve, because we have set very ambitious targets for the company.
And my team and together with the Board of Neonode, we work really hard every week to make a difference here and to break out of this, say, single digit million dollar type of turnover that we have had the last years. I think this company deserves much more on the technology, is certainly capable of driving much higher sales. So this is what we are working on and really fighting to achieve.
Jesper von Koch: Good. And for license sales, I mean I guess the typical arrangement is that you would get like NRE revenue before you onboard into a new license sales program. So is it fair to assume that we will see the NRE revenue before you ramp up significantly there?
Urban Forssell: Yes, as we’ve tried to explain but I can repeat that and I know that you are well aware of how the automotive industry works. So if you’re successful with certain RFQs this year, we can expect NRE revenues to ramp up for this and next maybe two years. And then only when the underlying product, meaning the new vehicle or the new platform goes into mass production, this is when we start to get royalties from the licensing. But that NRE part can be significant because it’s very time consuming and draws a lot of effort from both vehicle manufacturing and all the suppliers to develop, test, validate and launch a new vehicle platform. And of course, we are there to help. And our ambition is always to have at least breakeven during that development phase, for the efforts we do to support both the Tier 1 supplier and vehicle manufacturer to realize whatever ideas they have using our platforms.
Jesper von Koch: Sounds good. And then, I mean now regarding like licensing sales, you talk basically only about the automotive segment and previously you’ve talked about a potential large customer in the military for instance. Can you say anything about the status there?
Urban Forssell: Yes, so in our team during last year, we have sort of focused step-by-step more on the high potentials and those we find in automotive simply more interesting because of the higher volumes. Indeed, we still have quite strong interest from military and avionics companies and also medtech. And we are trying to explore and exploit these interests that we get from different directions. But honestly, we are a small team, a small company. So that’s why we focus on — also in our communication we are very, very clear that the main focus is automotive. And now I can underline that in our products business, we will think more like sector based. Again, I repeat that we will talk more about retail, proptech, and medtech as three very interesting segments in the products business, maybe together in hospitality, where you can include travel and hotels and restaurants.
So sector based marketing, sector based sales, to some extent also adjusting our technical offerings to each sector and the specific needs. We think that’s the model going forward for Neonode both in our licensing business and also in the products business.
