The market is currently looking out a few weeks and sees nothing great coming for Zagg but the price is holding up because investors are looking much further. By this time next year many of the major phone distributors will be bragging about their phones ability to withstand dust, rain and water but their new found durability won’t be coming from a set of well placed seals and gaskets. Instead it will be coming from nano technology and Zagg owns nearly 40% of one of the top waterblock businesses in existence. Recently that company, (HZO Inside), signed a marketing agreement with Brightstar to sell this technology to original equipment manufacturers worldwide. If all goes well then Zagg’s investment in HzO Inside could turn into a win win for Zagg’s investors. IMHO, that is what’s holding Zagg’s share price up and in the long term that could lead to it doubling or tripling in a few short years. With the advent of gorilla glass the end of the screen protector is certain to come to an end as the age of waterblock begins to take off. The future is bright for Zagg; even though right now it looks like they are swimming underwater.
The problem with screen protectors is that they are quickly becoming obsolete. Each new generation of smart phone is moving up to better grades of gorilla glass; the usefulness of screen protectors is coming to an end so a 50% loss will be significant. Fortunately, the upgrade takes time so Zagg has time to come up with another great product line; unfortunately, the number of competitors increases each year so it gets harder to own a large piece of the pie… Enter waterblock technology; it is an entirely new market with tons of growth potential that goes well beyond the cell phone industry. Waterblock is a gaming changing product, it will protect your company’s most valuable hardware when water from fire systems could short them out, it will protect valuable paintings, it will result in lightweight waterproof clothing, it will waterproof everything from DSLR’s to your child’s shoes. It is a huge industry ready to be introduced to the world and Zagg owns nearly 40% of one of the top manufacturers. Sure you can focus on the little tiny world of just smart phones; but the hulk that is waterblock technology is much bigger than that (puny little smart phones :-)). Zagg has an ace up their sleeve and the fools writing articles for Forbes magazine are clueless about its potential. Sure Zagg is going to create a lot of great products, but waterblock is the blockbuster of a lifetime and Zagg is ready.
I agree with mngtscrwdup. Hz0 is nice upside if it happens, but Zagg cannot count on it. IMHO, what's more important is the pipelie of new products. Particularly, the iPhone game controller which has enormous potential if Zagg can get some momentum with the major game developers. Also the NFA (Near Field Audio) products could be promising. If you don't own a Boost NearField Audio speaker, $60, you should buy one. There's no pairing lke Bluetooth. You just set a media device on the top of the speaker and the BoostPlus amplifies the sound. They are now featuring this in a line of children's products as well. The important thing is that the leadership get's it. Fill the pipeline with new and promising products, get the best distribution and learn what will fly. Let's hope we hear an encouraging progress report on the game controller and NFA products in the upcoming Q! earnings release.
disagree. the investing proposition for zagg is not Hzo. zagg is growing in other areas like keyboards and simply needs to introduce more strong products in the accessory categories. Hzo is a nice upside if it happens, but noone is counting on it to amount to squat. screen protectors are probably a mature market and could even decline, but zagg is less than 50% screen protectors and will be only a third screen protectors in another year. there are plenty of new ideas to re-invent accessories around mobile computing, only question is how good zagg's new product development will be.
Who so ever thinks that keyboards is the future of Zagg should take a very close look at the three year chart of Logitech; then visit Logitech’s website and look at what they’ve been building for smart phones and tablets (It’s a dangerous world out there for companies that make add-ons; an investor could get hurt). The invis shield was the right product at the right time but both Logitech and Zagg are proof that one hit wonders don’t last forever and even the best company can’t survive unless they keep the blockbusters coming. Zagg is a major investor in HzO Inside and that relationship needs to be cultivated and exploited to increase value for Zagg’s shareholders. Some day HzO will be a common name, they will go public and they will be wildly successful. IMHO, management for Zagg should make a commitment now to spin out their HzO_Inside shares to Zagg shareholders and let the market know that Zagg holds lots of potential for their current investors.