Device manufacturer Connected IO (ASX: CIO) is scaling up its revenue footprint courtesy of one of its largest clients.
Following a letter of intent signed with an unnamed “US cyber security company” in February this year, Connected IO has announced that it has received an additional purchase order for 1,000 units of its new ER2800-UNA-C4 product, a bespoke product tailor-made specifically for the US company that incorporates “dual SIM designed for mission-critical applications.”
The purchase order totals A$349,000 thereby extending Connected IO’s strong commercial start to this year and adds significant momentum to its emergence as a robust IoT enabler serving large-scale customers around the world.
The terms of the purchase order are staged and progressive, with 35% of the purchase order paid after Connected IO delivers its first batch of 5-10 “engineering samples” and allows them to be evaluated by the customer.
A further 35% will be paid upon receipt of the first 250 sellable units. Finally, Connected IO will receive the remaining 30% of the purchase order after it delivers the remaining 740 units.
The additional purchase order supplements Connected IO’s other unrelated deal with the same US cyber security company, which is expected to generate around $7 million over three years.
Ultimately, Connected IO intends to provide the cyber security company with a sophisticated co-branded programmable router with advanced features, offering unique abilities such as remote monitoring, management, security and real-time connectivity to machines and devices.
Despite market rumours swirling regarding the company’s identity, Connected IO says it has been “precluded under confidentiality and commercial secrets obligations” from revealing the name to the market.
However, from the bits of information made available so far, Connected IO says that the company was founded almost 30 years ago, developing cloud-based “payment card industry data security standard” solutions to large franchise merchants in the United States and internationally.
The company also offers a “managed security suite that includes both hardware and software for network security”, secured data access, and a framework for creating policies and procedures.
According to Connected IO, its products are used in grocery and convenience stores, restaurants, retail facilities, hotels and kiosks.
Parallel news and next steps
Connected IO has demonstrated its capability of slashing diagnostics and maintenance costs for large networks of machines as part of previous work for the likes of Coca-Cola, JohnRyan and Savioke Relay, helping the firms to streamline various services and improving cost-effectiveness within their respective businesses.
As part of its emergence onto the rapidly growing IoT stage, Connected IO has announced a flurry of distribution deals in recent weeks.
The company announced a distribution agreement with M2M Connectivity to boost sales of its products in Australia and New Zealand last week.
The deal clearly defined Connected IO’s corporate channel strategy of rolling out its products specifically for the Machine to Machine (M2M) market.
Connected IO plans to deliver solutions that leverage existing software made by Cisco, currently deployed on over 3 million devices and 230,000 customers.
The first product to be launched into the Australian and New Zealand markets is its proprietary AP-Cat 1 USB modem, a cost-effective industrial grade USB modem for connecting remote assets.
Connected IO says the product is unique because of its architecture being “built on LTE cellular services”, which is expected to provide the company with opportunities in key vertical markets in the foreseeable future.
News of today’s purchase order sent Connected shares 3.7% higher in early morning trade to $0.028.