Family Zone secures cornerstone retail deal with Woolworths to market new FZ ONE phone

Family Zone Cyber Safety ASX FZO Woolworths Mobile FZ ONE phone
Family Zone's FZ ONE phones will be sold through Woolworths locations nationwide and online by Christmas 2018.

Family Zone Cyber Safety (ASX: FZO) says it has secured a “strategically important” expansion of its market coverage in Australia, after striking a deal with Woolworths Mobile to sell its “cyber safe” mobile, the FZ ONE, on a national level.

Woolworths Mobile selected the FZ ONE as its preferred “child-friendly device”, with a view of it constituting a key part of its existing product range that’s marketed both online, as well as through Woolworths’ network of retail stores.

According to Family Zone, the FZ ONE will be sold through Woolworths supermarket locations nationwide and Woolworths online by the end of this year in time for the Christmas holiday period which typically attracts heightened spending.

Phone specifications

To ensure its cyber safety-focused phone is a hit with consumers, the FZ ONE will feature Oreo, one of the latest versions of Android, currently the most widely-used operating system amongst mobile phones globally.

Family Zone says that aside from offering a “high specification, high quality and great looking device”, the FZ ONE will sport a full complement of features that offer “no functional compromises or limitations on features, apps, social networks or gaming.”

Its core feature will be to offer parents a strong handle on security within their children’s mobile phone, with Family Zone’s software “deeply embedded into the operating system”.

Parents will be able to add family, social and gaming apps and will retain leverage over all available services and functions being used by their children.

FZ ONE phone Family Zone
Family Zone’s FZ ONE phone.

Another party that will benefit from the feature-packed FZ ONE are schools.

Family Zone says the soon-to-be-launched phone will support its “innovative School Community features” that will enable schools to participate in securing children’s’ online privacy and also complying with existing cybersecurity policies being set by schools across Australia.

Given the early-stage nature of the agreement, Family Zone said it is unable to forecast the likely commercial impact of its agreement with Woolworths but did confirm that the deal would offer an additional revenue stream.

“We are unable to forecast the potential revenue from this arrangement or its financial materiality. The company considers this to be a strategically-important agreement offering an additional revenue stream and validating the market opportunity and Family Zone’s product and approach,” the company said.

Product offering

Family Zone has described today’s news as “a significant milestone and validation of the market opportunity” with Woolworths Mobile confirming that it will offer the device on both prepaid and post-paid contracts to maximise the product’s addressable audience and to make the phone available to as many people as possible.

On prepaid plans, Woolworths plans to offer the FZ ONE with $20 mobile credit, while on post-paid contracts, the FZ ONE will be made available via a 36-month plan, which Family Zone plans to supplement by offering a 12-month subscription to cloud-based cybersecurity solution.

“We are enormously proud to have been selected by Woolworths Mobile as their child-ready device of choice. We’re also extremely excited by the imminent launch across their stores and online, in time for the important Christmas retail period,” said Tim Levy, managing director of Family Zone.

From hardware to software

In parallel to its upcoming launch of the FZ ONE, Family Zone has also reported strong growth in subscriber numbers.

Earlier this month, Family Zone reported that it has been running subscriber acquisition trials with a number of telecommunications companies including Telkomsel in Indonesia, Maxis in Malaysia and PLDT in the Philippines.

As a result of its effort to add subscriber numbers, Family Zone announced that its launch in Telkomsel’s retail channels had driven growth in wholesale paying accounts to over 31,000.

The cybersecurity company also confirmed that through continued progress in its direct-to-consumer and education businesses, paying accounts across all channels had grown approximately 400% year-on-year to now exceed 82,000.

Significantly, Family Zone’s retail paying accounts have grown approximately 260% in the same period and passed 50,000 last month.

“Accordingly, Family Zone is progressing well to exceed its target of 100,000 paying accounts by 31 December 2018,” the company said.

In morning trade Family Zone shares had added around 9% to be trading at $0.385 per share.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.