Maryland gun store co-owner Andy Raymond recently scrapped his plan to sell "smart guns" at his store, Engage Armament, after receiving hundreds of protests and several death threats. Raymond originally intended to sell Armatix's iP1, a .22-caliber handgun that only fires when in a 10-inch radio frequency range from a paired watch.

This is the second time a gun store has reversed its stance on smart guns -- the first being a California store that backtracked earlier this year after being hit by a similar backlash.


Armatrix's iP1. Source: Wikimedia Commons.

Smart guns by the numbers
President Obama has touted the adoption of smart guns as part of his 23-point plan to reduce gun violence after the Sandy Hook Elementary shooting in Newtown, Conn., in December 2012.

On the surface, smart guns seem like an ideal middle ground between gun rights and gun control advocates. It could counter the theft of 232,000 guns per year reported by the Bureau of Justice, since a smart gun is useless without a paired watch or implantable chip.

Moreover, smart guns could decrease accidental shootings at home, since a federal study claims that an average of 8% of all unintentional shooting deaths in the U.S. resulted in shots fired by children under six years of age. Last October, an NBC report revealed that nearly 7,500 children and teens were hospitalized every year in the U.S. from gunshot wounds, resulting in approximately 500 deaths. That problem could worsen, since 39% of American households owned guns at the end of 2013 -- a 5% increase from 2012.

Unfortunately, the reality of smart guns is far more complicated than those simple percentages and statistics.

Regulators are antagonizing gun owners
Much of the controversy surrounding smart guns stems from a 2002 New Jersey law stipulating that once smart guns go on sale anywhere in the country, all New Jersey gun stores must shift from sales of traditional guns to smart guns within three years. The change wouldn't affect guns that people already own.

New Jersey's law seems to needlessly antagonize gun owners and actually discourage the adoption of smart guns anywhere across America. As a result, New Jersey Senate Majority Leader Loretta Weinberg recently stated in an MSNBC interview that she would consider reversing the law if gun rights groups like the NRA (National Rifle Association) agreed to not stand in the way of smart gun technology.

However, that might be easier said than done. Back in 1997, Ronald Stewart, the CEO of firearm manufacturer Colt's, called upon his industry peers to support the development of smart guns. Stewart's views prompted the Coalition of New Jersey Sportsmen -- a state affiliate of the NRA -- to call for a boycott of Colt's. The following year, Stewart was replaced as the company's CEO, and the company completely abandoned the smart gun market.

A matter of life and death
Another key hurdle for smart gun manufacturers to overcome is the notion that smart guns are not as reliable as traditional firearms due to their electronic components.

Since a smart gun relies on radio frequencies to function, it could theoretically be jammed like cell phones and walkie-talkies. Both the gun and watch run on batteries, which could die in the middle of combat. This makes it nearly impossible for police officers and soldiers, who constantly work in life-or-death situations, to ever trust such a device. Therefore, a traditional gun with a regular safety seems like a much simpler and safer alternative to smart guns.

At the same time, gun control advocates believe that smart guns could create a false sense of safety and actually boost sales of firearms across America.

A matter of cost
Last but not least, smart guns are expensive. The Armatix iP1 costs $1,399 while the accompanying watch costs $399. That's several times the cost of a Smith & Wesson (NASDAQ:SWHC) handgun, which costs $400 to $500. That steep price tag has caused demand for smart guns to remain fairly low, although the technology has been available for well over a decade.

If smart gun manufacturers ever want to make an impact on the U.S. market, they must address concerns about possible failures and the cost effectiveness of the device. One manufacturer, Kodiak, is taking a different route -- instead of selling an entire smart gun and a watch, it sells a biometric grip that can be attached to 1911 model firearms. The grip, known as the Intelligun, locks the gun with a fingerprint scanner for $399 -- a substantially cheaper solution than Armatrix's iP1.


Kodiak's Intelligun. Source: Company website.

Locking accessories like the Intelligun could be introduced as optional add-ons for existing firearms without replacing traditional firearms altogether. Taking that subtle approach would be smarter than forcing gun stores to carry expensive smart guns like the Armatrix iP1, since it leaves the choice to the owner.

Can smart guns and accessories stabilize the gun market?
One could also argue that the only two publicly traded gun manufacturers in the U.S. -- Smith & Wesson and Sturm, Ruger, and Company (NYSE:RGR) -- won't ever need smart guns to boost their businesses.

Last quarter, Smith & Wesson's revenue climbed 7.1% year-over-year last year as sales of handguns soared 29.9%. Sturm, Ruger, and Company's revenue rose 28.1% in the fourth quarter of 2013. Shares of Smith & Wesson are up 82% over the past 12 months, while Ruger has rallied 33%.

Yet introducing optional smart gun options such as biometric grips could decrease volatility in the stock in times of crisis such as tragic shootings or aggressive legislation. In the week following the Sandy Hook tragedy, for example, shares of Smith & Wesson plunged 11% while shares of Ruger slipped 4%.

No easy answer
In conclusion, there's no easy answer to gun control in America. According to Gallup, 37% of Americans support maintaining the status quo on gun laws while 49% support stricter laws regarding sales. However, 75% believed that the government should never pass a law that bans the possession of all handguns except for the police and authorized people.

Smart guns would be a wise first step, but they must be presented as optional purchases rather than required ones free from the interference of the U.S. government and the NRA. Prices must be lowered, mechanisms must be made less complex, and devices must be proven to be just as reliable as traditional firearms before they can ever gain traction in the market.

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Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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