When Axon (AXON +2.56%) released third-quarter earnings in November 2021, the company made a surprising announcement that it would start to sell more products to the general public. That expanded the company's addressable market from those with a badge to any citizen who is looking for protection.
The implication for Axon's products is that it would have a law enforcement side and a consumer products side, with tasers and potentially cameras for the masses. This week we got a peek at what that strategy looks like and how this growth stock hopes to keep the momentum going.
Image source: Axon.
Axon's consumer product upgrade
Axon has been making consumer tasers for a long time, but it hasn't been a significant focus for the company. The tasers didn't sell well, and their design wasn't really conducive to consumer use. That changed with the launch of the Taser Bolt 2, which is built for self-defense.
Not only will Bolt 2 immobilize a person for up to 30 seconds, it will alert emergency dispatch when paired with a companion app on a smartphone. The taser technology inside is the same that's in law enforcement weapons that are used by hundreds of thousands of officers around the world.
The trend we can already see here is Axon repurposing law enforcement products for consumer use. Tasers are first, but given the potential market, I think it's far from the last product we will see from Axon geared toward consumers.
Consumers could be a big market
Management thinks the consumer market for Axon's devices could be $17.8 billion per year. That's bigger than the $16.2 billion law enforcement market, and could potentially be 35% of the company's business. What will we see for consumers besides tasers?
Given the deep integration Axon has with law enforcement, the security camera market seems like a natural fit. Livestream data access could be granted to law enforcement if there is an incident, just like Axon Citizen's cloud upload of video and images does today.
Integration with investigators and prosecutors could also be a great addition given Axon's growing services business. Imagine an officer getting all the data they need directly from a user when a complaint is filed. Police reports could become user-generated at that point.
Axon's perfect growth market
The great thing about Axon's move into the consumer market is that it doesn't require much technical buildout. The company's core products are already built to withstand daily use by law enforcement, they may just need to be repackaged into form factors that make more sense for consumers.
There could be a growing number of integrations between consumer and law enforcement products, like the auto call to first responders.
If Axon is successful in gaining traction in the consumer market, its business could nearly double in size over time. There's more competition for consumer attention than in law enforcement, but as a trusted name in the industry, I think this is the kind of move that will make Axon a growth stock for another decade.
