All right. I think the clock is 10. Everyone has arrived, so it's time to say welcome. You guys in the back will turn up the sound without having this, luckily, we are actually not live today, so that gives us the opportunity to adjust a little bit. We will, of course, video film and send it online afterward, but we choose to have this session today only here and not stream it live in order to make sure that we could have such a full room of our stakeholders and investors today. So really excited that so many came to us today to join us to this presentation. As you can imagine, it has been really, really exciting and, I would say, not stressful, but in a good way because we had a deadline today, June 13, to share with you quite a lot of development accomplishment.
That's also why we had a slightly shorter Q1 last quarterly report because we accumulated a lot of insight and we have worked really hard as a business to arrive today in order to tell you an even broader story and a lot of the accomplishment and, of course, the road forward. We have called the venue or the event today "The Road to 1 Million," which will be the theme and focus, and we are really excited to share this with you today. There will be a lot from the team presenting today. We got a lot of good feedback from you last time when we had our last year Capital Markets Day, so you could see a broader part of the Xplora team as we are more than 100 people.
It will be a quite short session, roughly 10 minutes each, but overall, that is really what will tell this broader story, and we would like really all of the key stakeholders in our team to be part of the presentation today. I will do an intro, and I would like to start to tell you a little bit about the objective for today so you can try to have that back of your mind throughout the presentation. I will also summarize it at the end. Like I said, the theme is "The Road to 1 Million," so we'll try to give you a lot of insight, particularly from Kjetil, related to how our business model works and can scale to a million. I will define what we mean by that as well.
We will also give you an insight on some of the trends we are seeing within the broader family IoT space and also why we have made some selection related to our different strategies. That will be a key insight today as well. We still get some questions related to exactly how does your business model work? How do you calculate churn? How does it really scale? So we'll also tap into that, making sure that everyone has the proper knowledge and insight exactly related to how our business model is working. And also, we'll give you some additional insight and some decisions related to how we can drive an even better IR strategy forward and some of our key new initiatives.
Then the way to explain this to you, I will start with an intro, and instead of us just explaining things all the time, we also have an interview we would like to share with you, some really insightful people, Jennifer Powers. Kjetil will take you through a lot of the operational way to lead to one million. I will come back to that as well. Then we have our three divisions, first with Jason. We also have some insight on our biggest market, the German market, with Christina. And then Sven-Jarle and Jonas will take you through some of the latest developments on SaaS and Senior. Sanghyo will take you through how we actually are executing this from an R&D and tech perspective. And then Knut will pull it all together from a financial perspective. And I will make a short summary at the end.
That's the way we're structuring the day, roughly 10 minutes each. I also really would like to have you keep in mind, 1 year back in time, we had a Capital Markets Day as well. We said to you we would have 3 very key focuses in the years to come. When the year started in 2023, we said very clearly to you that number 1 priority was to demonstrate profitability. Whatever it took, we should make a positive EBITDA, making sure we could demonstrate the profitability in our business model from an operational point of view. We therefore stopped a lot of other initiatives to only focus on that profitability. We also told you in Capital Markets Day last year, only when we demonstrated that we would start to explore new opportunities.
And we said if we manage positive EBITDA in 2023, we would use 2024 to start to grow more units and pilot new initiatives and opportunities, which I'm happy that Sven-Jarle and Jonas will showcase where we are today. Making sure if we also in 2024 showcase profitability, successful piloting new initiatives, we're in the perfect spot to really scale in 2025. That was our commitment one year ago. And for the purpose of new investors, we have also added a historical highlight. Time flies. You can spend some time to run through this from not far long time since we had 70 or 200,000 units. Now we are almost at 500, and you can follow how the business has transitioned, but also as we'll come back to when we started our first developments on our platform, when we actually introduced our first SIM card and where we are today.
The key thing with this actually is that even though it's easier to write the book when it's done, I think it's clear to say, and we are actually quite proud that when we started Xplora, when we started this business, as we have stated in our initial documents, we saw this as a three-step rocket. Number one, we very clearly said our objective is to build a completely hardware-agnostic family IoT platform. That was the way we started. That was all the work Sanghyo did back in 2016 and 2017 with the objective to put whatever sensor or unit on our platform. We started with kids' smartwatches. That was phase one. And then we also said, like any other service business in the tech industry, we need to drive high-profit service revenue. How should we do this?
Because most companies need to have a huge volume or find a sticky service that people are willing to pay for. We quite quickly realized that the best way to do this was actually to not have a nice-to-have feature, but a need-to-have feature, being the SIM card, which triggered the acquisition of 4 MVNO setups back in 2020, 2021, which we later have accelerated into 9 global markets. And then we started to add service revenue on top of that. That was step number two. And where we are today is really we have a finalized IoT platform. We have 9 global MVNO with proven track record, not just to buy the SIM, but even to premium services.
I would say we have timed that exceptionally well to now the huge booming growth of many other family IoT products, which we will showcase to you today, which also is the perfect introduction for us to really scale within the next four or five years. As you can see on the top, rocket ship number three, if you would like, we have already sold 1.5 million units that can drive SIMs in one of many categories to come. The theme for this story today is to take you through, of course, the kids, but also some of these other opportunities. What do we mean by "Road to 1 million"? I know many of you already have understood it's about the subscriptions. What? The company has one high-level objective goal.
Every time we wake up in the morning, we see the number 1 million because we will at some point, as a goal, seek 1 million subscriptions. Why? Of course, it's very high-profitable services. It's scalable. And with 1 million, we would have an annualized recurring service revenue of roughly NOK 650 million. And since everyone is asking when, which is natural in this environment, we are not putting out a new guidance and saying next year we will have X and the year after we will have Y, but we are saying over the next 4-5 years, everything we do, everything that drives our strategies will be related to achieve that goal. And how? Jason will show you what we are doing in the kids' industry with our current product, but potentially even new products. Sven-Jarle will show you this is a multi-device strategy.
We are kicking off Senior. That's another opportunity. Even not being within the 1 million scope, but potentially on top, Jonas will also take you through our B2B model with our SaaS. Of course, as any company, we can decide to do that organically or via M&A strategies, which you all love and hate. All right. When we make these decisions, it's not just randomly, of course. Over the many years, we have followed some of these key trends that drive these new family IoT units. Today, we would like to emphasize some key trends within three categories: within youth, parents, and seniors. Before my colleagues will dive into the details, I would just like to show some very high-level trends, starting with the young kids and youth.
And the best way actually to give you, I would almost say, almost like a scary, dark status quo on why this is so important. For sometimes we have been working with Jennifer Powers, the former special advisor for the Prime Minister in the U.K., working with a lot of both tech and financial institutions related to the massive impact that social media and smartphones have to our kids. I have four kids myself. I can see it every single day, but there is a huge movement going on toward parents and even in the political circles related to these developments. So please, four minutes with an interview we did a couple of days ago with Jennifer Powers explaining why this is a huge opportunity for us.
Hi, my name is Jennifer, and I live here in Southwest London. I got in touch with Xplora because I found myself in a position that a lot of parents across Britain find themselves in. There seems to be this huge gap in the UK market for a phone that is suitable for tweens and teens. We've got brick phones on the one hand, and then you've got full-blooded smartphones with all the horrors of the internet on the other. I've been involved in Smartphone-Free Childhood that started only in February. More than 100,000 parents have gotten involved in a grassroots movement to delay smartphones and social media until children reach 16.
There is chat in these WhatsApp groups every single day about the lack of a child-safe phone, the lack of a phone that is safe by design. Yes, there are parental controls, but parental controls are quite frankly rubbish. I have several degrees, and I cannot work parental controls on a smartphone. The idea that every parent across the country has to figure out how to use them and set them at the same level to ensure that children are protected is absolute nonsense. And quite frankly, it's the tech companies putting the onus on us when, in fact, they've created phones which monetize our children and their attention and put them in grave danger.
And the onus shouldn't be on us. I mean, it is talked about in the media every day. I'm the moderator of a group here in Southwest London. We have more than 3,000 parents on a WhatsApp group. And every single day, parents in that group are talking about what they want from this hybrid phone. They want something which has absolutely no access to the internet, but does have locked-down apps like Maps and travel apps so that their child can get to secondary school. They perhaps want a payment app so their child can pay for food or snacks, but they don't want them to have access to WhatsApp and TikTok and Insta and Snapchat and all of these other horrific social media platforms which steal our children's attention and actually introduce them to just uncontrolled risk on the internet.
I think the iPhone didn't become ubiquitous with children until about 2012. So we've had a 12-year experiment on this nation's children. And the results are in, and they're horrifying. The Jonathan Haidt book, The Anxious Generation, came out in March, and it paints a picture of this horrendous impact on teens and young people. We see skyrocketing rates of anxiety, depression, self-harm, cyberbullying, and even teen suicide, especially hitting girls, but also a really big issue for boys because they're being raised on a diet of torture porn and hardcore pornography. Even if we stop our children from having a smartphone, they're likely to have that content shoved in their face by other kids.
There should be child-safe phones by design in the U.K. market so that we can send our children out into the world not having to worry about what online content is consuming them. Secondly, smartphones are actually depriving our children of their childhood. These are phones which are sucking their attention 24/7. Smartphone-free childhood and the other groups that have sprung up like wildfire over the past few months are really about returning childhood to children to not have them be slaves to a digital addiction of their smartphones.
It's not anti-tech, it's not anti-screen, and it's not even anti-phone. It's anti-smartphone. It really can't come soon enough because every child that we can delay getting a smartphone for even a year or two is going to have massive benefits for them, for their mental health, for their families, and also for society. I just want to applaud Xplora for taking this step to make this investment. I can't wait for this phone to hit the market. It's going to be incredibly popular, and I'm going to be first in line to buy one. All right.
So yeah, it's kind of distorts the picture they are painting related to this, but I hope it also demonstrates why we see this as a very important proposition and also very good timing because the investor that is following us for some year all know that the parental control we were working on into 2023. Due to the focus on profitability, one of the initiatives we set on pause, but basically driven by the high impact or requests such as these, Jason will come back to how we take this forward. All the research, I definitely want you to look into Jonathan Haidt and all the statistics related to both self-harm, suicide, and everything that comes with social media and smartphone is kind of some of these drivers.
So huge opportunity for us to work with both telcos and strategic partners related to really make this a strong proposition. Sven-Jarle will later today take you to some of the trends related to other IoT, such as seniors, because the seniors, they are living longer. It's more focused on safety. We also see, as Sven-Jarle will go through, very often it's the same buyer that will buy both senior as well as our kids' product. As he will lay out as well, the lifetime value is potentially eight times the size of the current kids' market. Some of the drivers for the senior. Then Jonas will take you through some of the details with IoT.
Some of the high-level trends we see is that across the world, really, it's a lot of focus related to safety and health in general, which allows more of these sensors to become relevant. Also, after the COVID, the pandemic, the consumer in general is becoming more price-sensitive. So a lot of these sensors, you can say, yeah, but that might be a crowded market. And there are a lot of sensors in the market already, but very often quite expensive sensors and also associated with quite expensive subscriptions. What we see is a drive of requests for kind of different price points that also have a different subscription price point. And we see sales data from the Asian market. And we know always in this category, trend starts in Asia and then 3, 4, 5 years later arrive in Europe.
So we also see huge opportunity to drive our connectivity, which Jonas will take you through. So that's kind of the three areas we have worked a lot with that we will execute today and showcase. Kjetil will now take you through our business model and a lot of insight how it scales to arrive at a million.
Thank you, Sten. Good morning, everyone. The road to 1 million, how do we get there? It's basically about continuing to do what we successfully have been doing for several years to scale up a bit. And I'll take you through, let's say, the history of the past few years to build the ground for the further growth. So I'll look back a little bit on what we have performed so far, starting with the smartwatches, which is actually the carrier for all our services.
There is a ratio between the uptake, the sales number of the smartwatches, and the services. So if you look back a little bit over the last few years, what we have delivered, you will see quite a strong growth in the number of devices that we have sold. We have, just going back some few years to 2019, comparing the 73,000 we sold at that time with roughly the 500,000 we sold last year, we see it has been quite a strong growth. We have refocused on 9 markets, 9 core markets where we have connectivity. And we have some few markets where we historically have been selling to customers that we continue with, with very, very focused. We have also expanded the network of distribution channels. We have continued to grow our Amazon sales figures.
We have strengthened our web sales, and we have widened the network of traditional retail, both online and physical retail channels. We have taken the category leader position in the European market. We also see that we have launched multiple generations of our smartwatches and shifted to higher specifications. And so in that way, been able to lift the average sales price. That's a function also that we have started to add premium price when we sell to telcos. You know that we primarily sell our smartwatches with mobile subscriptions. When we sell to telcos, that is not the case. And then we have now started to make contracts where we actually get a premium price, and we get also a revenue share, which I will come back to. Of course, there is a currency effect of this as well since we report in Norwegian currency.
Then going into the different revenue streams and RPU and churn that many of you have asked about, we also see that the 4Q rolling recurring service revenue shows a very stable growth. There are basically four sources today for the service revenue stream. The biggest one is the mobile subscriptions. As Sten mentioned, we have expanded from the four Nordic markets into now totally nine markets. The focus is then to continue to grow the customer base. And we have worked a lot on optimizing the tariff plans. I'll come back to that. We are also very successful with our premium subscription plans that accounts for the activity platform, which is through value-added service. We commercially launched it back in 2023, and we had a very, very good uptake with more than 40,000 in the first year of sales.
We have bundled them together with the traditional mobile subscription plan. So we have one basic and one premium, making it very, very easy for the customer to actually adapt to the activity platform and then give us extra revenue. We also succeeded. We sent out a press statement this spring saying that we have made a contract with a German large mobile virtual network operator, selling also the premium service to the first telco. So that's a new sales channel for a service that we successfully launched last year. Then we have also started to get revenue, service revenue from the telcos. We now have five, four in Europe and one in the US. And we are seeing that there is a willingness to pay for that service.
So it's a kind of revenue share that we get from their subscription revenue. Then we also introduced a service fee. A service fee is for those customers who select to use another SIM card than Xplora's. We primarily did it in order to reach 100% connectivity rate in the markets, especially in the Nordic markets, where we sell all our Xplora phones with our SIM cards. So to get from 80%-85% to 100% was the primary driver. But this also gives an option to actually start introducing this in the other markets. So those are the revenue streams that we have introduced so far, and this is the foundation for the road to 1 million.
I'll then go a little bit into how we see that this has developed between the different markets. We started, as you know, in the Nordics, and we see quite a significant quarterly revenue development between Q1 last year and Q1 this year, taking it from NOK 45 million-NOK 63 million. But you also see that there is a different split this time this year when it comes to the revenue distribution across markets. It used to be almost 60% Norway. Now you see it has decreased to 47% of the total pie. And we see very strong growth in the period in the German market that has continued in Q2. We see an uptake in the US, and also the Spanish market is very, very promising. When we look at the 4Q, the four-quarter rolling RPU, you also see that this goes in the right direction.
On the left-hand side, you see all the figures for the group taking us from, let's say, the NOK 73 up to now NOK 97 in the last quarter reported. And you see that on the right-hand side, there is the split between the Nordic markets, which is the upper red graph. And then you have the other newer markets where we recently have launched. So there is a significant difference in the price level on mobile subscription plans between the Nordics and the rest of the markets. But you also see a steep growth in the new markets where we have launched.
When we look in the growth curve for the whole base of services, on the left-hand side, you see the quarterly subscription base for all our services, where we reported above 260,000 just recently. And then you see the mobile subscriptions per market, where you see, again, recognizing the pie from the previous page, that the Nordic markets are still among the largest. But we see a change now where Germany actually has overtaken both Denmark and Finland, and the daily sales now in Germany are very close to Sweden.
So Germany will continue to take market share in our portfolio. We got some questions from some of you related to the churn. We have started to report our monthly subscription sales figures and the base. You see that the churn is actually stable. It varies a bit between 2.6% and 3.4% because it relates to the total customer base. So there are incoming customers, then there are outgoing customers. There are promotions, there are 12-month upfront payments that partly are renewed, and that's the reason why it goes a little bit up and down. But you see over the long term, the graph is rather stable. And we got the question from some of you, have you stopped to grow now? We reported in January, February, March figures.
And you see it on the right-hand side that actually the churn overtook the new sales in the first month. If you look on January 23, on the far left side here, you saw that we were pretty equal in January last year. This year, the churn overtook the new sales in the first months of the year. That's because the churn is a function of the churn of the total base, while sales fluctuates a lot between the months. If you look at the blue scale for December last year, where we had 20,000 new subscriptions, we have a massive net growth. While in the first months of this year, you see that we actually have a decrease on the mobile subscriptions. Also compare April and May this year to April and May last year, where you see that we grow by 40%-45%.
That's because of Germany, Spain, UK, and also because we closed the gap in the Nordics, introducing the service fee. We have a net growth also in the sales compared to last year. Right, then we're getting into the future. I'll start by explaining why the service is so important for our business case. When we listed a company, we had very few, very little service revenue. It was basically about selling the hardware, and it delivered around 30%-31% margin. Then we shifted, rolled out the mobile services, added on new service revenue streams, and see what happens. Because of the lifetime of that service contract, which is around 30 months, we quadrupled the revenue. Taking us from roughly NOK 1,000 on the hardware to a total revenue combined, hardware and services, around NOK 4,000. But more interestingly is the gross margin.
So look at the scale, taking us from NOK 300 up to NOK 2,800. That's nine times higher. And you know that we have +80% margin on the service part. So it's a very scalable, super profit money-making machine when we increase the volumes. And that's the introduction to how do we get them to 1 million. I think this is the most important slide, so pay attention to this. There is a ratio between the sale of devices and the uptake of services of everything we do. Regardless if we sell it with our SIM card, it includes the premium service, sell the premium service through the app, have a telco revenues here, or sell the service fee. It's all related to devices.
So in order to reach to 1 million, we need to have an average growth of also for the device part because that's how we grow the service part. The assumptions on the right-hand side are the historic figures. If you look at all of this with churn, with RPU, you will recognize that this is in line with what we have today. I've taken down the RPU a bit going forward because of the graph I showed. There is quite a big difference between the Nordics, which today is the largest portion, and the other markets, which is lower. Over time, I think you will see not that continued growth in RPU because these European markets have a lower price on the mobile subscriptions. I've been quite realistic in the assumptions. You see that the premium will grow quite strongly.
You see that the telco service revenue will continue to grow. So we'll work on the telcos to get more of those businesses. I'll now go into the four different streams. So when we look at the mobile subscriptions, we see that assuming that 25%-30% conversion of the total smartwatch sales will transfer into mobile subscriptions, delivering our RPU, which today on group level is 97 NOK, going down to 80 NOK, continue with a monthly churn around 3%. This on the right-hand side would be the growth in the mobile subscription base. So taking us then up to roughly 500,000 by the end of 2027. The activity platform, there are various ways of selling it. We sell it combined with our mobile subscription plan. We sell it through the Xplora app, and we sell it through the telcos.
That's the Freenet deal that we have just recently announced. So here again, between 7% and 13% conversion related to the smartwatches, including the additional volume from Freenet, eventually other telcos. You see the RPU around 24 NOK per month and the same churn as we have on the mobile subscriptions, also then building that 1 million base. The telco service revenue, the telcos are very eager to enter into this segment because they know that all the kids that have an Xplora smartwatch at a certain stage will end up with a mobile subscription. So that's why the telcos are so interested. And they are willing to give us both a premium when we sell the hardware, but also do some kind of revenue share model. So here again, we have said at 3% starting with compared to the conversion of the total smartwatch sales.
The RPU is around NOK 35 for this business, and the monthly churn rate is the same. So again, here seeing the same development. And we have been quite careful on this, but you see it takes us up to roughly 40,000 subscriptions in this model. And I think that is more than realistic to achieve. The service revenue is a tool that we use to maximize the uptake of our mobile subscription plans. And we have now closed the gap in the Nordics. So this also lifts the sale of the mobile subscriptions. But in other markets, like in Germany, for instance, there is quite a big portion of the total market, which we cannot address with our mobile subscription plans. There are a lot of retailers that have their own MVNOs, and also the telcos are quite aggressive in their pricing.
So that's why we believe that at a certain stage, the time is due also then to introduce the service fee in more markets, accounting for a new revenue stream in those markets. So that's number four. If you combine all of this, you see that the sales of services would have to go from 200,000 this year up to 490,000. The service base will then go from 370,000 up to 1,000,000.
And as Sten said, that will take us to a service revenue of NOK 650 million. So it's an ambitious plan, but it's actually building on the services we have today, same RPU, declining a bit in the new markets, same churn, and just doing better and continue to do what we do today. So that's a quick way how do we get to 1,000,000. Then I'll hand over to my colleague, Jason Pyne, EVP of the Kids Division. Thank you, Jason.
Okay, good morning. Okay, so let me start by just running through and reminding everyone of the business model for the Kids Division as we are today. We have a range of hardware in our smartwatches, which we sell to obviously our retailers, distributors, and through our own online channels. And as Kjetil showed you in these previous slides, we have a range of SIM-related products through our own MVNO services, through our 9 core markets, both the basic and the premium services, and the B2B element now, where we're able to use things such as our premium services to share revenue with our telcos and third parties through their own networks. So onto the products themselves. We have three smartwatches. We have the XGO3, which is our value-for-money entry-level product.
We have our premium product, the X6 Play. We now also have the X6 Pro. I'm going to give you a bit more detail of those as we go through this presentation. Something that's very, very important, which I will mention probably two or three times during my slides, is the parent control app we have associated to all of our hardware. This is something that is the core of everything we do. As Jennifer showed earlier, something very, very important to the market to ensure that what we build is firmly baked into hardware that doesn't allow kids to get around it, if we can put it that way. So the products themselves, we've got to plan over the next three years to make sure our products are relevant.
Although we've released products, as you've seen them on the previous slide, this year they'll also be upgraded. We will continue to do that year by year on year. The reason for that is to make sure we are relevant, we are in the right space at the right time, and we are selling something that kids actually do want. So for the XGO3, in October this year, we were releasing a new generation of that, Gen 2, as we're calling it. We're going to be welcoming kids to the Xplora Jungle, which is the theme of it. What this will allow kids to be able to do is to be able to buy a watch, but continuously change the theme of that watch as they go through.
So the younger generation of kids that experience our products will be able to swap out, change colors, and change their minds, as kids do on a very regular basis. I'm sure you'll know. Then the X6 Play. Already this year, we have released a new version of the X6 Play where we've updated our packaging, making sure it's visually represented correctly in retail, for example, as well as our online services. But in Q1 next year, February next year, there'll be a major chip upgrade in our X6 Play as well. Then the last one, which you've heard about our X6 Pro a number of times in the past. We've launched it this week. It's gone online on Monday, and we're really looking forward to seeing how that goes. And that's our flagship product, really taking the category to another level.
With the beauty of what we've developed, and Sanghyo talked to you a lot more about the infrastructure, it gives me a fantastic opportunity to be diverse in how we sell our products. So for example, we can now take any one of our products and rebrand, white-label it to suit a customer's demand or channel's demand. So as an example, Amazon is a very competitive price-level market. So we agreed with Amazon to have an Amazon-exclusive product, taking the XGO3 product, rebranding it solely for that particular market space. So we know that the price point and the product we're selling fits the market trend relating to that channel.
The middle part, which Christine will give you a bit more detail as she goes through her part of her presentation, is a major high-volume product where we've been able to sell to a multinational retailer a branded product associated to their brand. So they're also promoting the safety and security of kids utilizing their brand, being much higher volumes of sales, and also connected to a SIM connectivity where we receive the ongoing revenue share. And the third part, which is the most exciting part for me personally, is, as you know, we sell our products online through retail and through telco providers. But a press release was released only two weeks ago explaining that we have a new partnership with a security-based company. What does this mean? We can now take our product and rebrand it and reach a whole new range of verticals.
So as you know, we sell online, we sell through Amazon, retail, and telco. We now will be able to sell into the security environment. What does that mean? As Sten showed you earlier, a doorbell, home security, the home, the family, it's all related. The car industry, banking, insurance, they're all new verticals that we can sell our products that fit into the banking industry. For example, they're introducing kids into their world. Let's associate our products and let's build their brand with our tech. So for the next four or five years for the Kids Division, where do we see that? So the first thing is, as Kjetil has said, we need to continue to build on our current products and services, our three products, our two revenue streams in basic and premium, and focusing on our MVNOs and our nine core markets.
But we're not going to stop there. From next year, we're going to start looking at releasing additional products, new devices, expanding that device portfolio significantly. This would include smartphones, tablets, and smart tags. And again, as I said at the start, the parent control app is going to be a significant introduction to this because the parent control part, doesn't matter how much you put a phone out there, in the market at the moment has to have the control baked into the product, not downloadable after. Kids are too clever these days. The market strategy for 2024. I know I've been personally received questions on this in the past, what about certain countries? But this is where we are, and this is the definitive process that we go through and how we deliver our products and identify what we need to do.
I'm not Norwegian, as you can tell. What I do know is markets are very different. We have 5 established markets: Germany, Norway, Sweden, Denmark, and Finland. We have a very good penetration, a good position. Our customers are aware of us in those markets. We have good distribution through online, retail, telco. We have 4 emerging markets: U.S., U.K., Spain, and France. Over the last 12-24 months, we've really looked into those markets to see where will we best be able to sell our products, what is the trend.
The trend, unfortunately, changes really well. We now have the opportunity with the sales products we've got and the proposition we're putting out to those markets to really grow over the next few years. I'm now going to pass you over to Christina, who's going to give you some key facts and some information about our largest market, Germany. Thank you.
Thank you, Jason. As you mentioned, my name is Christina. I've been working for Xplora for the last three years and have recently taken over the German market. Together with my team, we are overseeing the local operations, including sales strategy, especially focused on telco, retail on our online channels. We also work quite a lot with our B2B and B2C marketing, and obviously also our local logistics operations that we have within the DACH region. Here's an overview of our sales partners and how we have actually, I think you can see on the slide that we are quite well established on the German market as of now. We have leading telcos and MVNO providers.
We have multinational retailers, both physically in store and on the online shops. Then we also have our own webshop on Xplora.de and then obviously on Amazon as well. If we look at the market today, since 2017, we have approximately 700,000 activated watches. Connected to that, we have 1,000,000 downloaded on the app user, on the parental app. Average growth is approximately 28% based on the device revenue, which is NOK 218 million. Active subscriptions is almost on 30,000 as of now, and our annual recurring service revenue is on NOK 7.7 million. As of March this year, we have 350,000 active users that actually use the app on a daily basis in the German market. As you can see, we have 6% market penetration, so we still have a lot of potential in the German market.
One key area of development is, as Jason mentioned, our new partnership, which is what we call white-label brand with MediaMarkt and Freenet, so Freenet with the MVNO provider and MediaMarkt as actually selling the hardware. This is a big volume deal that we have made, which is running over two years. Minimum annual order quantity is 30,000 units, and we expect within the first year that we will sell around 35 devices plus 24 months of service, which we will also get into the next year of the recurring revenue because of the 24 months. We estimate a deal on NOK 35 million over the first year. One thing I would like to just quickly mention as well is, as you can see, we call it Let's Go.
So it's based on the Go model that we have that utilizes our current product, and we don't need to go and actually develop new hardware. Three steps going forward, also looking into the next 4-5 years, we want to grow organically. That's quite important for us. Grow organically is looking really much into our service revenue. So we want to increase our conversion on all service revenue, on our unit sales, and on all sales platforms in the German market. We also want to introduce our new products, as Jason mentioned, tablet, phone, and tags to our large customer base or user base in Germany, also again receiving a lot of service revenue on those products. Then last but not least, we also want to again utilize our white-label brand.
It's a huge market, and we can see with high-volume strategy or high-volume deals, we can really get out and take a lot more market penetration than we are doing at the moment. I think that concludes the German market. Yeah, okay, and here we have Sven.
Okay, everyone hear me? Yeah, so hi, my name is Svenn Jarle. I've been with the kids business since basically the first SIM card when we launched PepCall back in 2016. Now I'm heading up the senior division. One important starting slide is that as we reported last quarter, one crucial function of a senior value proposition is fall detection. We've been working quite hard on that for the past months. Just last week, we reached the threshold that we have looked into being the accuracy level that's needed in order to have an actual fall detection product to be able to sell.
So we're very proud of that, and big shout-out to our R&D division in London. What will we do? We will utilize our existing X6 Pro platform where the investment is already taken. The flexibility this gives us in the senior market is to rapidly change both interior software and exterior hardware fitted to the senior population. What's important for them is what meets the eye, what meets the skin, and what meets the self-image, meaning we are not going to launch a product that's stigmatizing for the seniors. And then to our core value proposition, taking us back to the fall of 2023, we did an in-depth study jointly with PwC.
One thing, and one word, actually, is simplicity when it comes to senior value proposition. Why others, and where others, have failed is basically because of the level of complexity of the product they have launched for the senior value proposition. We have now focused on the essential features, and where the theme is safe everywhere for the senior. Very important, it also reduces complexity to maintain the features and contributes to give a good battery lifetime. For us and for the seniors, it's not something that should just be a piece of technology. It should be a companion in their daily life where both the senior and the close relatives can get ease of mind. Why will we succeed? We will leverage on our already existing distribution and sales channels. That's where also all our partners are and the potential buyers and collaborators in the senior market.
Also here, the investment in a platform is already done. What this gives us is a quick time to market utilizing existing setup. And we have then, as the buyer of the product, identify also the personas. Who is then the actual buyer of a senior product? Can be the senior themselves, but most likely we found that it will be the close relatives, either the spouse and/or their son or daughter. Where will we target? Mapping the senior market, you will find 85% of the seniors being independent and living at home. This is common for all European markets and also a trend that all governments need to adopt to. Why? Because there is not enough space. It's too costly to have them institutionalized. So, and also why others have failed earlier?
They have given a senior a product that's not actually designed and fitted for the senior, and it's given at a too late stage where the cognitive level of the senior has decreased too much. We will then come in early at the upper step staircase here because we need them to buy into it, understand the purpose, why they need it. Of course, with the safety features, it's also relevant for the persons following them up, which basically are the sons or daughters. The market opportunity here, well, looking at the kids market where we already are established with the success there, the potential senior market is what I'm showing here. With an expected RPU of twice the current kids market, there are twice as many seniors in the age group 65-85, which is the key target market.
And we expect the lifetime value to be 60 months plus. Why is that? Well, as the senior gets this product, there is no need for change to a different product. We can upgrade, of course, with developing features, but the stickiness will be both then the watch, the app, because it fits into the family IoT idea. Then in the frame here, this is the current phase one that we are launching in the senior market, but there is also a multi-product market opportunity. Why is that? Well, in the study again, we did see that the daily activity of a senior is not kind of singled. It's multifaceted, meaning that the home living environment that the senior lives in on a daily basis requires technology going forward. It's not either/or. A smartwatch with a fall detection can be crucial, but also many seniors will have still smartphones.
But as the cognitive level decreases, one of these might disappear because they can't use it anymore. That's why we are looking at a multi-product strategy within the senior market as a whole. Then finally, what's the launch timeline? Having successfully then done the method threshold of the fall detection, our target now is December 2024 in phase one in four then of our core markets.
And just as a reminder, the X6 Pro is an eSIM-based watch, which then also puts some limitation as to eSIM availability in some of the couple of the markets. But next year again, then the evolvement will be also to introduce more premium features. What we discovered and found in our analysis is that typically voice-initiated calling connected with pattern recognition, those types of developments will be something that we will follow as the second value proposition going forward. Thank you for your attention.
All right, good morning, everyone. I'll start my section here by going through two of the most important news that we just released this morning. So as we just mentioned, and due to some tough negotiations over the last few days, we're now very pleased to announce that we have signed an agreement and entered an agreement with Telenor to offer IoT connectivity services to the global market. We'll start by focusing on the European market, but we have an option to expand that into any country that Telenor operates in. The second important news that we shared this morning and that we want to highlight today again as well is that we now have a commercial agreement for selling and to launch our premium activity platform in Asia with our partner, an existing partner, 360.
So let me then take you back a little bit and go through in detail what actually the SaaS division is doing. Now, I'm sure you all know that the previous value proposition for kids and seniors has been to sell our own smartwatch where we have our OEM smartwatches with our own connectivity and our activity platform of proprietary hardware and licenses. But there is no reason why we shouldn't also sell those services, the connectivity and the activity platform, to any third party. The way that the R&D team has built up these services is that they are scalable and they can host a multi-tenant. They can be multi-tenant platforms. That means that we can basically plug in any other third party to our own services and continue to scale it.
So our target now is to find the most attractive devices, IoT devices that are active in Europe, and to sell our own connectivity that we now have a product with through Telenor. It's also to sell our activity platform in Asia and in particular China, where the market for kids watches is a lot bigger than what it is here in Europe and in particular in Norway. Let me just quickly go through some of the key highlights over the past few years for the Xplora Activity Platform. Now, as some of you may remember, this was an initiative that was launched in 2019 as a collaboration with Sony PlayStation and Xplora. Now, this was the first time that we were able to connect physical activity to gaming and to engagement for kids. Scroll through a little bit further.
In 2021, there was a pilot project with 360, our now partner that still produces the XGO3 today, where this first development of the connection of physical activity and gamification was put into a more robust context and as an actual platform. So the first pilot that 360 and Xplora did together resulted in about 80,000 active users. So that's 80,000 active users on a free model, right? So that gives us proof of concept in Asia. Going forward in 2022, we were able to commercialize this platform and launch it in Europe as well. And we were able to launch it with our own connectivity in the basic and premium service that Kjetil mentioned earlier. And as you can see, by adding these services, we were able to have a significant increase in the number of subscribers in 2023.
In fact, if you look at the compounded annual growth rate from the end of 2018 to the end of 2023, the compounded annual growth rate was 60%. That's pretty good for services. Now we're very happy to announce that we've entered the service agreement with 360, where we will now launch our own activity platform to their customers. And why this is important is because 360 today in China already has 2 million active users of smartwatches. And they're not even the biggest smartwatch manufacturer in China. They're the fourth biggest. So with this, we can now enter a market that is significantly bigger than our own device market here in Europe. And we can grow the number of subscriptions independently of our own hardware sales. And that's the most important thing.
To give you some context on this first partnership, we are targeting a EUR 2 per month per user subscription, and we will have a revenue share for that subscription fee. So there will be some revenue going to us, some, of course, to 360, but this is the easiest way that 360 can increase their revenue and the lifetime value of their customer without having to do any own development apart from connecting our services to their users. And this is something where we will launch three independent adventures on their platform. And by subscribing to these services, kids in China will be able to collaborate and compete with kids from Europe in order to be the most physically active throughout the summer.
The second piece of news that we launched this morning, and we want to go into this in more detail, is that we're now able to offer IoT connectivity to any third-party device here in Europe. Now, that gives us the supply side of the equation, so the product that we can sell. But we're also in advanced discussions, and we have signed an MoU with a leading IoT device manufacturer to offer our services now to their devices. So that gives us the demand side as well, the customer. So we now have the product that we can offer and the customer. And that is really important because over the next few weeks and months, we will be targeting a lot of these 4G connected IoT devices here in Europe.
Now, in total, and it's difficult to estimate, but some analysis suggests that there are roughly between 70 and 100 million active IoT devices that are 4G connected here in Europe. Now, we're going to start by targeting the ones with the lowest data traffic because that's where we have the most attractive margins. And those margins are similar to what we have on our own connectivity devices today. So in sum, we are now offering IoT connectivity to more than 100 million to a unit market, a market of 100 million units in Europe. And we will scale this through the next few years. We have the infrastructure done. We have a supplier agreement. We have an MoU signed, and we're targeting a launch for Q4. The other thing is that we're now offering our premium services to third parties in a 15 million user market.
Now, there are about 72 million kids in China, and there are about 15 million active smartwatches for kids that are 4G connected. So it's a pretty big market. So the development is done here. The commercialized agreement is done, and we target to launch again in Q4. So now I will hand it over to our tech genius and CTO, Sonny, who will go through how this has been done and laying the foundation for this development.
Thank you. Jonas, I like that. Okay, so now it's time to talk about reality. A lot of ideas, plans, and someone has to deliver, which is our awesome R&D team based in London. So what will be our R&D strategy in order to accomplish great business plans and vision? So the key message here is how we can support the sustainable scale-up from the R&D perspective.
So we categorize in three areas: device, platform, and the data. Multi-device, not only kids watch, but also inviting more partners to join into our system. The multi-tenant, we built a beautiful house, but our Xplora lives alone here. So now it's time to invite more friends to come to our house and enjoy a lot of great features together. The data, because a lot of friends and children supply the old data, then how we intelligently use this data to provide a more premium service. So those are three key areas I'd like to touch one by one. Multi-device. We keep on going what we've been doing greatly in a kids watch. So we continue improving and evolving our kids watch in-house, like what we have been done today. In addition to that, in order to scale up, it's not only our kids watch.
We need to actually expand our years of experience to our partners and device manufacturers to actually join into our system so that they can also expect more revenue, not only selling the hardware. So that's why we invite third-party partners to have a more deep integration into our parental control by utilizing our Xplora Solution Pack. But not only integration, we learned that the most important thing is how we can comply with the local regulations, such as GDPR or many telcos' homologation process, which we found that most manufacturers, typically from Asia, have no great knowledge around. So that's why we established a structured way, Xplora way, to set up the homologation process, helping third parties to properly verify their product quality, making sure they comply with the local compliance. That's how our strategy is set up in a multi-device.
The next is a multi-tenant strategy in our platform. So like I mentioned, at the moment, we have a beautiful house, but only Xplora kids watch and many different services. But now it's time to invite more partners to join in through our open API and connect gateway architecture to access our great premium features that they can offer to their user base. In this way, we can effectively expand our user segmentations and target customers and use cases throughout this multi-tenant architecture. So this is a great initiative that Jonas has mentioned about working with 360 to join into our open API, and then they can offer our activity service effectively to their 2 million monthly active user base. Then what's actually coming in 2024? So app and the parent control. So new app.
Now, although we have a beautiful house, but now we need to invite more friends coming in. So then we are currently renovating our new app to have more great features that our partners can use easily. So that's one we are expecting coming in later this year. And also we are building up our Xplora Solution Pack for our third-party partners to easily integrate into their device or products. So like Jason mentioned, it is crucial to have a deep integration so that children, they cannot walk around. So that's why it is important for our partners to have a great solution from Xplora to have a deep integration into it so that we can offer proper parent control service. Then data and AI. We cannot get away from data and AI in this market. So now we have many partners eventually linked into our platform.
This means we can acquire more data, not only from the kids watch, but also all different sensors, use cases. So then what we are going to do with that? We like to adopt AI technology to analyze the data properly and provide a more intelligent premium service so that we can have more opportunity to upsell to our customer to sign up for more premium service. As an example, currently all parent control feature is actually SOS feature or emergency. Only it happened when actually incident happened. But with the data and the machine learning mechanism in our platform, we can actually monitor the data and detect abnormal situations, such as if children are going to school alone with our kids watch, but then we detected suddenly the speed of children is changed compared to the normal day or started taking different paths suddenly, then we can detect.
So actually children press the SOS button, already our platform can pre-alert the parents, something's wrong. Why don't you have a look? Or even senior, senior usually wake up 7:00 A.M., but suddenly it doesn't happen. Why don't you check? So such things actually giving us more opportunity to provide a more intelligent way to communicate with the parents or caregiver. So that's how we try to utilize the data and AI in the coming years. However, we already adopted some of the AI technology into our daily operation. So we are already using the AI for our customer support, which significantly improved the efficiency to deal with everyday consumer inquiries. So that's where we are, and hopefully we can deliver so that we can continue to grow. Now it's about the money. My colleague Knut.
Thank you, Sonny. So now we have been going through a lot of the new initiatives and also the road to 1 million subscriptions. So where are we now? And it's important, as Kjetil says, we are enabling the service revenue on the devices. We had 467,000 units sold in 2023, and we have a 25%-30% SIM conversion. That's quite important to understand the whole business model. The service revenues that we have are very predictable, meaning that we have a plan for a longer period. So you can see the service revenue in our P&L is gradually increasing in every quarter. And as of end of Q1, we had 250, if you multiply Q1 with 4, we had a run rate of NOK 250 million in ARR. What's also important linked to this is our cash position and cash management because that enables our operational flexibility.
As of end of Q1, we had NOK 120 million in the bank. The last piece of what we are doing is that we need to have continued cost control and focus on profitability. As all of my previous colleagues have said, a lot of the assets that we have made over the last years, we have this already done. We don't need a lot of CapEx and new high-cost items in order to fulfill a lot of the new initiatives. Why is 1 million subscriptions so important? So far, we have done this. We have built the connectivity. We need to come to a place where we have about 750 devices in the market. And at that time, we will have roughly 1 million subscriptions.
If we compare ourselves as a connectivity supplier or a subscription supplier, we can also see that we have, for instance, Ice today is about 750,000 subscriptions. So being ambitious, saying that we would like to go and surpass 1 million is important, and it considers us to be a substantial player in this market. So we have a proven growth model. The current business model, how we are operating, supports the 1 million subscription. It's quite important that the service revenue is predictable with a high gross margin plus 80%. And we have a very strong growth and profitability improvement over the last four years. As Kjetil said, we have now a share of wallet that is four times higher than when the company went to IPO.
We have a gross margin that is 7 times higher or even 9 times higher, as Kjetil said, to just show that we are increasing the share of wallet of a customer and have a high profitability on it. We need to prioritize, and we need to pursue the opportunities that increase the number of subscriptions and service revenues. That's a very important financial target. As Sten said, we will also look into M&A and partner opportunities that can speed up the growth in subscription. But we need all the time to have the growth needs to be balanced with cost control and the investment level. I want also to address a little bit on the investor relations part because we have always the focus that we are creating growth, profitability, and cash management. That's fundamental for what we are doing.
We will also continue going forward to communicate and have visibility linked to the operational performance and transparency of the road to 1 million. We have had also a lot of questions around a few of our activities, and I just want to state them clearly here is that we will continue with the monthly updates of the subscriptions. We are increasing the investor targeting activities, and we will, when time is correct, initiate the buyback program that is in line with authorization from the shareholder meeting in the spring. That will be considered. We will also restart the research activities that we had a year ago, and we will restart that again. I also showed a graph that shows the comparison between our market cap in the stock exchange compared to four-quarter rolling ARR. Just for your reference, I will not say too much about that. Sten?
Excellent. Thank you. So it was quite a long session, but I hope it was really useful because this really allows us to be able to talk freely with different partners, conversations we are having, and also addressing a lot of questions we have had from you guys. We have a very quick 5 minutes to end. Just to summarize it, I think one key takeaway is one of the key things Kjetil said. How do we get to that 1 million? And mathematically, it's actually quite easy. Math is always easy, right? It's right or wrong, but it's actually to drive 15% unit growth per year. That's really the one number you need to remember. And as they have said, actually, we are quite close there only with our current product.
Now we are adding a portfolio of more products over the next years in order to arrive at 15% growth. Mathematically, with 15% unit growth, we will arrive at 1 million, all else like with conversion. As we have tried to said, the big opportunity really, the way we see it, we are really strong here with the buyer, the parents that buy it for the kids, their youth, and even potential, and most likely, as Kjetil said, to the senior. It's the same retail distribution seller value chain as well. To end, I would like to take you through a little journey, a little film, our vision where we see ourselves waking up in a beautiful day here in Oslo some years ahead of time. I will do the voiceover if you can run the film. This is an early morning some years ahead.
Big city like Oslo, a kid walking to school, parents waving goodbye. Go to a big red school, use some of the services they already use today. To make the film simple, this is both a kid and a youth. So he's both 7 and 14, as you will see. He also has a phone. Of course, he loves his grandparents. The grandparents have simple tech, as Kjetil said, one button only to connect to their loved ones. We know this means a lot. But also, this is what the future will bring. Easy way to access in a safe way for help to get in. Crucial to be notified, some of the propositions Kjetil already mentioned. We know, unfortunately, this happened. Like Sonny said, we can also use AI to make sure this is actually the fall or did it all go well?
End of the day, I have 4-1 coming home. Here we have 1. They all do that if they can have more screen time. They love to battle and challenge Dad on the most steps. I like my life easy to make sure I can switch on everything I need to do in my home. As Sonny said, it allows us to pull a lot of data into our cloud to make an ecosystem connecting the whole family. This is a day we would like to make happen 4 or 5 years from now. It's really this house; this is our future. We have said over the next years, we would like to become the leading brand within not just kids, but family tech.
As long as we have products that are connected, promote safety and activity, we invite them, like Sonny said, to our house, which will allow us to build the ecosystem for the family with all these new sensors coming. My hope for today is that we gave some more insights in our business model, how it works, how it scales with the churn. Hope it gives some clarity when we wake up five years from now, how we see the world then, and also how well we feel we are positioned to really monetize on all these units that will be connected. I hope also we had some conversation after Q1. I know some hope to see some of these deals then, but I hope really now you can see both Senior Division and our SaaS Division had some breakthrough this morning with what we published.
With this, you have the tools in order to model our business model going forward and allow us to have really good conversation going forward, tapping into what we have shared today. Our recommendations, since this is now not live, we are good on time. It was really what we had on the agenda. The management will be here over the next 30 minutes, hoping to have questions. We can sit down one-to-one, some more coffee and drinks so we can have Q&A for the next 30 minutes, one-to-one out here, or we will be here. But I know you guys have a hard schedule. That was really it for today. Happy for you to join, and we will say for the next 30 minutes to discuss with you.