Life360 Inc (ASX: 360) has had great success with its tracking technology, allowing users to keep an eye on their children, find lost keys, and even make sure people arrive on time at their destination.
Now they've turned their attention to pets, with their new pet GPS products allowing owners to track pets in real time and receive alerts should their furry friend escape.
While the company hasn't released anything to the ASX about the development, E&P Capital research associate Annabel Khun has had a look at the new product, and says while it's not earth-shattering from a revenue perspective, overall it was, "likely to be more positive than not versus consensus expectations in our view''.
The new product is currently only available to gold or platinum members, and has been launched across the US, UK, Canada, Australia, and New Zealand.
Image source: Getty Images
New product a loss leader
Ms Khun writes in a research note to clients that the new offering from the tech company is being steeply discounted at an initial price of just $3.60, instead of the usual price of $89.99.
This promotional offer is also available in the US for US$3.60 (Usually US$49.99 for the first, US$79 per additional tracker) and the other three markets of the initial launch.
As well as pet tracking and escaped pet alerts, the service also gives access to a local "pet finder network", which subscribers can use to alert the local community about lost pets, with the alerts, including pet photos, breed, and name.
Ms Khun writes that this is a novel offering.
Compared to their competitors Life360's offering lacks heath and pet behaviour tracking that these other devices offer, however the Pet Finder Network is unique to Life360. The upfront discounting to $3.60 is significant, showing that Life360 is using Pets initially as a loss-leader to try and drive higher adoption of Gold and Platinum memberships.
Ms Khun says the "rationale for this is pretty clear", with 45.5% of households in the US owning a total of 89.7 million dogs and 32.1% of households owning a total of 73.8 million cats.
While the revenue impact is currently not seen as significant, E&P Capital retains a positive recommendation on the stock, with a $46.57 valuation.
This is marginally higher than the current share price of $46.06, with the stock more than tripling in value this year.
The company currently does not pay dividends. Life360 was valued at $10.8 billion at the close of trade on Wednesday.
