Public-Safety LTE Smartphone Firm Bittium Reports First-Half Financials
Wednesday, August 09, 2017 | Comments

Public-safety smartphone maker Bittium reported its financial results for the first half of the year. Net sales from January to June decreased by 12.8 percent year-on-year to €27.1 million (US$31.8 million).

Product-based net sales were €7.2 million (US$8.4 million), which resulted mainly from the product deliveries of the tactical communications system, product deliveries of Bittium Tough Mobile Long Term Evolution (LTE) smartphones and related security software, and deliveries of products for measuring and monitoring biosignals. The increase in the product-based net sales year-on-year resulted mainly from product sales in the medical business acquired at the end of 2016 and increased deliveries of Bittium Tough Mobile LTE smartphones.

Operating loss was €2.8 million (US$3.3 million). The loss was caused by the decrease in the net sales and significant research and development (R&D) investments. The R&D investments in own products and product platforms were 23.7 percent of net sales, said Bittium’s CEO Hannu Huttunen.

“The investments focused mainly on extending the tactical communications product offering targeted for defense industry as well as on different terminal products and their related software development targeted for mobile security and public-safety markets,” Huttunen said. “We started to develop the new software-defined radio based Bittium Touch SDR product family that includes tactical handheld and vehicle radios, and we continued to develop Bittium Tough Mobile smartphone and its next-generation research. We aim growth especially in the international defense and public safety and mobile security markets.”

Bittium will continue to look for inorganic growth opportunities in all its product and service areas and is prepared to invest in acquisitions that support its growth strategy, a statement said. Bittium previously announced that it targets 10 percent annual growth in net sales. The company believes that in the coming years, it can grow its net sales even more than the earlier announced target, and therefore, set up a target to exceed the annual 10 percent growth target of the net sales. However, Bittium does not expect in 2017 to reach the targets set for the growth in net sales. The reason for this is the termination of significant customer cooperation with a global network equipment manufacturer.

The following factors are expected to create demand for Bittium's products and services in 2017 and beyond:
• Development of 5G technology has started very well, creating demand for Bittium’s R&D services.
• The secure internet of things (IoT) has become a significant development area in many industries. The increasing need of companies to digitalize their operations, collect data wirelessly and transfer it to the internet and cloud services generate need for Bittium’s services and customized solutions.
• The use of LTE technology, smartphones and applications continues to increase in special verticals such as public safety, creating demand for Bittium Tough Mobile secure LTE smartphone and other customized special terminals based on Bittium’s own product platform. Also, the interest toward LTE-satellite hybrid devices with terrestrial and satellite connections has grown. The implementation of LTE-based devices in public-safety markets has been slower than expected because of the delay of the device processor functionalities required by the authorities. The sale of the secure terminal products is expected to develop moderately according to the nature of public-safety markets.
• Using public network connections in portable devices is increasing in demanding professional use, such as in the public sector. This creates requirements for network connections to be easy to use and secure. The products in the Bittium SafeMove product line enable the ease of use of the devices and security in demanding use.

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