Is Axon Ready to Jump Into the Consumer Market?

As Axon Enterprises (AXON -0.74%) continues to grow, investors may ask how their expansion into consumer markets might look. 

In this "Industry Focus" video, recorded on Dec. 1st, Emily Flippen and Brian Stoffel examine the possibilities of an increase in consumer focus for Axon.  

Emily Flippen: I talked a lot about international expansion. But, I think one of the hidden talents of this business -- and this is a big question mark if they can execute on this -- but the hidden talent is pulling in customers that are not police forces. The easy addressable market internationally is pulling in people who use tasers, body cameras, and records management, right? Police forces.

But, management has increasingly pulled in contracts from other agencies. I mentioned EMS, so emergency medical services. These are businesses that can easily use that dispatch service to figure out where they need to be at what time, and selling these packages alongside things like GPS tracking and live streaming services.

Imagine coming up to a wreck where a medical professional is wearing a body camera and is trying to service that person -- they can get immediate help from somebody who is maybe more knowledgeable, or an expert in that field, who can tell them what they need to do to potentially save that person's life.

This was an aspect of optionality that wasn't even in the cards, wasn't even on management's radar when it was just TASER International. So, I think about that optionality. EMS is just one example of the potential use cases of all of these products for the future.

Brian Stoffel: Yeah. I'll just throw out one more that's interesting is their VR investments -- virtual reality. They have created a suite of products where officers undergo training for how to respond to different situations, and they're saying that they're getting a lot more traction there as well.

But, I think we should probably talk about the big addition, which was that they are going after consumers like you and I. What do you think of that?

Emily Flippen: I have to be really honest. My first instinct when I heard the news that Rick Smith, the co-founder and CEO of Axon, wanted to go after the consumer market -- my first reaction was just sheer horror. I read it as: We want to put tasers in the hands of consumers.

Let me just say, I'm a Texan. I grew up in Texas. I understand that the market for people who feel the need to defend themselves with firearms may not be the same market of people who are going out to buy tasers. Maybe there's some overlap there.

But, my mind first went to 18-year-olds who are goofing around with their friends and felt the need to maybe go buy a taser and tase each other. [laughs]

Now, this is an extreme scenario. I'm half-joking when explaining this, because I'm sure the go-to market strategy for consumer products is not going to be: "Let's give 18-year-olds tasers that are the same [laughs] strength as police forces." But, it did get me thinking about the need to protect life for consumers.

I think that there is some argument to be made that Axon is well-positioned to help to protect lives for people. Right? Same way that they help protect life for police forces. Why not do it on the consumer level?

But, I think the big question mark for me is just: What does execution in this field look like? Because there's probably a right way to do this, and there is definitely a wrong way.

Brian Stoffel: There's more than one wrong way to do it. I will say that as soon as I heard that too, I was personally very surprised. I immediately thought to myself: "Would I get one?" And I wouldn't. I went to my wife and I said, "Would you buy a taser?" She said, ''Where we live now, no. But when we used to live on U Street in Washington, D.C. -- maybe I would have thought about it.''

I said in our notes before the program, this is like bridging the gap between mace and a firearm. But, I think it's worth pointing out two things. One of those two things -- and a lot of people responded to me on Twitter about this -- is that internationally where gun laws are different, this might have a lot more appeal.

Now, I don't know. I live part of the year in Costa Rica and we're in the rural, the countryside, so I don't have enough experience to know if this has appeal.

During the conference call, the analysts wanted to learn a little bit more about what they were doing and Rick Smith was a little bit coy. He just said, "Yes, tasers for people." But, also quoting his words, "Personal safety mobile apps will also be a part of it."

But he specifically said he's not going to reveal what that is. And I'm curious, because the company has clearly shown an ability to make a phenomenal pivot from being a manufacturer of stun guns to a provider of AI software.

So, what could they do for the consumer? I'm not sure, but I'm very curious.