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Espial Group’s Orange TV Stick deal will increase its addressable market, says Euro Pacific

Espial Group

Orange TV StickEuro Pacific analyst Rob Goff says Espial Group’s (Espial Stock Quote, Chart, News: TSX:ESP) deal with Orange to supply a internet enbaled HDMI dongle is a new device with the same goal.

This morning, Espial announced that Orange has launched a streaming device based on Espial’s HTML5 Client software. The Orange TV Stick, which will compete with devices like the Chromecast stick, provides over-the-top video services apps and video-on-demand portals.

“We’re excited to work with Orange — one of the world’s most visionary network operators — on innovative services for their customers,” said CEO Jaison Dolvane. “Leveraging our software, Orange has created a world-class video user experience, which will give them competitive advantage, as well as a platform, which can be enhanced rapidly to incorporate new services and applications. For Espial, this represents the expansion of our solution onto HDMI-based devices.”

Goff says the Orange Stick is an alternative to set top boxes and smart TVs that should help expand Espial’s reach. But the analyst says he is taking a wait-and-see approach on the potential economic impact of the deal.

“The revenue generating model and as a result the full extent of the revenue impact remains unclear,” he said. “With a consumer device (like TV) Espial is set to receive a royalty on every device shipped, as it does at TV OEMs. Yet, Orange is a service provider that might be able to build a new service around the Orange TV with potential recurring revenue opportunities at Espial. We look for greater details on the announcement.”

In a research update to clients today, Goff maintained his “Buy” rating and $4.80 one-year target price on Espial, implying a return of 28.4% at the time of publication.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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