Hello, everyone. Thank you for standing by, and welcome to Neonode's Q3 2020 Earnings Conference Call. After the speaker's remarks, there will be a question- and- answer session with the company's covering analysts. At this time, for opening remarks and introductions, I would like to turn the call over to David Brunton, Neonode's Head of Corporate Investor Relations. David, please go ahead and start the conference.
Welcome, and thank you for joining us. On today's call, we will review our Q3 2020 Financial Results and provide a corporate update. Our update will include details of customer activities, technology developments, and other items of interest. Before turning the call over to our CEO, Dr. Urban Forssell, and CFO Maria Ek, I'd like to make the following remarks concerning forward-looking statements. All statements in this conference call, other than historical facts, are forward-looking statements. The words anticipate, believe, estimate, expect, intend, will, guides, confidence, targets, projects, and other similar expressions typically are used to identify forward-looking statements.
These forward-looking statements do not guarantee the future performance that may involve or subject to risks, uncertainty, and other factors that may affect Neonode's business, financial position, and other operating results, which include but are not limited to the risk factors and other qualifications contained in Neonode's annual report on 10-K, quarterly reports on 10-Q, and other reports filed by Neonode with the SEC to which your attention is directed. Therefore, actual outcomes and results may differ materially from what is expected or implied by these forward-looking statements. Neonode expressly disclaims any intent or obligation to update these forward-looking statements. At this time, it's my pleasure to turn the call over to Urban. Urban, please go ahead.
Thank you, David, and welcome to this call. I will review with you today some strategy and business updates, and after this, I will hand turn over to Maria for some financial details about this Q3. To start off the strategy presentation, I want to reiterate that we, since the beginning of this year, have organized our business into three separate business areas, and we call them HMI Products, HMI Solutions, and Remote Sensing Solutions.
In this call, I will talk a little bit about each one of them, give you some insights to both the strategy and the current business activities that we have. HMI stands for Human-Machine Interface. Those of you that have followed Neonode for the last 10 or 12 years or so know that this has been the key focus for our business, leading up to 2020. It still continues to be very important. That's why HMI Products and HMI Solutions both are focusing on these areas.
In HMI Products, we sell our standardized sensor modules for contactless touch, and gesture sensing. The focus there is on customers in the elevator and interactive kiosk segments. HMI Solutions is a separate business where we focus on customized engineering solutions made for touch and gesture sensing at this point. The focus is on customers in the military and avionics and the industrial segments. Remote Sensing Solutions is a software business for us, where we focus on driver and in-cabin monitoring. In terms of customers, we are targeting OEM and tier one system suppliers in the automotive space in Europe, in North America, and Asia, respectively.
With this as an introduction, I will also reiterate that Neonode works with two main technology platforms, one that we call zForce, that underpins our touch and gesture sensing technologies. Contactless touch that you will hear us talk about in this call is a very hot and sought-after technology solution that we can provide now to customers that want to avoid touching keypads and displays in public spaces, which is very much in focus due to the COVID-19 pandemic. Our software platform, MultiSensing, underpins our offerings in driver and in-cabin monitoring. For driver monitoring, often the objective is to monitor and detect drowsiness and distraction with the drivers. In-cabin monitoring is more focused on occupancy and situational context monitoring inside the vehicle, including passengers. It could be pets, there could be objects in the passenger compartment.
In this review, I will start to talk a little bit more about the business area, HMI Solutions, where we, as mentioned, offer customized touch and gesture control solutions for demanding customers in the military avionics and in the industrial segments. This is a solutions business. We focus on 100% bespoke solutions that we adapt to each customer's specific needs and each application. We offer scalable solutions. The business here is based on a consultative long-term relationship approach. As mentioned also, we target customers in the military and avionics segment and the industrial segment. We are leveraging here the advantages with our advanced zForce technology. That would be that it offers, for instance, a cost-effective touch and gesture control. It has both good EMI and EMC. That would be electromagnetic interference and also electromagnetic properties. Sorry for this.
We have very good functional performance, good quality, low latency, freedom of design and so on. We also can operate for military applications with night vision systems that are frequently used in helicopters and aircraft and also on ground vehicles where we are looking today. This slide is just to illustrate the types of applications we say that we deal with, and it's touch on displays, also touch on other surfaces. It's often in very demanding environments and rugged applications where operators would like to have a touch operation of a system or a display function where they can use gloved hands or stylus pens or any other object to control the underlying system. We can also, with our IR-based technology, offer touch on any surface, not only linked to a display, but actually we could do on glass windows, on walls, on tables and so on.
A very strong offering that we have, which is, for instance, very important in medical applications, is that we do not deteriorate the image quality, neither the resolution or the contrast or the lighting of the underlying display, which is sometimes very important. For instance, for examining X-ray images in a system that we indicate in the picture here, second from the right. We have two main variants of our zForce technology.
One is a blocking technology, and we show an illustration on the left. The working principle is that we have on two sides, you have light-emitting diodes, and on two opposing sides, you have photodiodes receiving these infrared light beams. If you place a finger or an object, you will break one or more of these light beams, which can be detected, and hence we can detect the touch.
This is the simple operating principle behind our zForce blocking technology. Of course, there's much more to it, but this is the simplest way I can explain it. We also work with a second variation of this technology that we call reflective technology, where we have a one-sided sensor element that both emits infrared light and detects reflections from objects in that light field. By clever arrangement of the light-emitting diodes and the photodiodes receiving reflections and use of advanced optical lenses, we can position accurately objects in that two-dimensional light field, and that light field could be hovering above a display or any other surface, or it can be directed into midair, allowing us to develop in-air touch or gesture sensing applications, or if you would say, contactless touch solutions.
The focus is on military and avionics and industrial. Two very interesting markets that are very large and also importantly, they grow at a steady CAGR every year. We think that we have a lot to do in these two segments, and they have not been in focus for Neonode until this year. It's only this year and actually just a few months back since we really focus on trying to enter and penetrate these segments. We can continue to see about the segmentation and sub-segmentation.
Actually, in military avionics, if you would say that defense is roughly one-third of the total volume and civilian aircraft and similar two-thirds of that volume. The 150,000 units that we estimate may not sound much, but typically in the military and avionics, the budgets for development and the average sales price for a display unit with touch is quite high. Actually it's a very interesting segment for us to operate in. The industrial segment is larger in terms of volume and also turnover, but on the other hand, it's also fragmented. Still, this is also a very interesting segment for us to operate in.
Then you may ask, what happened to printers and automotive applications and so on? Yes, we do not say that they are our main focus, but of course, we will continue to work in this, the sort of Neonode legacy segments, printing, automotive, medical, white goods and so on. We will deal with this in a more opportunistic way, as opposed to military and avionics and industrial, that we will go after more strategically and with a stronger focus going forward. Interesting market size and interesting growth.
We think that we can have a good growth in these two segments and combined because they have a technical overlap, which is substantial. We estimate that we can reuse the same type of solutions for both the military avionics and the industrial segments. Typically, the customer will be large companies. If you look at the largest companies in these two segments, actually some 85% of the largest companies are based in the U.S. It's a very strong focus on the U.S. market and large companies. Of course, we have customers that are both geographically located outside the U.S. In Europe, there are many strong industry countries and as well as in Asia. Just looking at the large companies, 85% of them can be found in the U.S.
That's why we are increasing our presence in the U.S. and our focus on the U.S. market going forward. Turning over to HMI Products, this is still working with HMI. Again, HMI stands for human machine interaction. For Neonode, that means infrared technology, and it means contactless touch, gesture sensing. Here our offering is based on our standardized sensor module that we produce in our subsidiary, Pronode, in the west of Sweden, and that we deliver directly or indirectly via distributors like DigiKey and Serial to our customers. Similar technology, but a different product offering to customers and a different way of distributing products. This is a more classical product business where we sell products. Average sales price is typically higher compared to our HMI Solutions business, which would be more a licensing business.
These sensor modules that we offer here, they are easy to integrate and very well-suited for both retrofit applications and new OEM designs. They are quite easy to use, offer great design freedom, and still have a high accuracy and good performance. We are selling them direct, as mentioned, also through value-add partners and distributors. We are expanding, basically every month, our network of partners, and I will come back to that point later on. With COVID came an important change for Neonode, and we realized that we were actually sitting on a technology that was very well-suited to solve for the problems caused by the COVID pandemic, namely that people do not want to touch displays, keypads in public spaces, like in the airport, in the shopping mall, or in a hotel or office building.
We have the technology, we have the products, and we are building up our order book actually, week by week. More companies are joining in and getting interested in starting to purchase these products. Shown in the pictures here are some different examples where we have, together with value-added partners, created new solutions that solve for this contactless touch challenge. This picture, bottom left, is from the Changi Airport. We have a press release on this that we released, I think, in September.
There's a similar application with check-in terminals and in point of sales, second from the left. Two elevator applications to the right, one with a holographic display and one with a more basic direct approach installation, a retrofit installation from a partner in Hong Kong. Shown here is then examples of our two target segments, interactive kiosks and elevators. I will skip this in the sake of time.
When it comes to contactless touch, we have two ways to go. We have our sensor modules. You can use them to project a light field on top of a surface or in midair. If you arrange the sensor module cleverly and program the software cleverly, you can create what we call a parallel plane configuration. A few centimeters or even millimeters in front of your display or in front of your keypad or similar, you can have the invisible infrared light field that we can then use to detect one or more fingers, pointing at or through this light field. Then you, as a user, can interact with the underlying system without having any physical contact to anything, actually. Everything is done mid-air and straightforward.
One example is the retrofit installation for the elevators that we saw on the previous picture. The other main alternative would be today to use a holographic display. We are working with four or five companies in the world now, actually developing and selling holographic displays. Before they met with us, they had a capacitive component that could display images into mid-air. By using our sensor modules, you can actually touch-activate those hovering images that are projected into mid-air. All of them work according to the principle to have a semi-opaque piece of glass that reflects part of the light shone on it into free air. Depending on how you angle this holographic plate, you will have the holographic image in a vertical arrangement or slightly tilted.
Of course, you have to be a little bit clever, but you can arrange our sensor modules to go with that holographic picture. Where we see the biggest opportunities for our solution is with interactive kiosks and elevators. Two very interesting market segments. Massive volumes. If you take all interactive kiosks together, we have an installed base of some 39 million units and strong growth. Elevators is today just shy of 20 million, and strong growth with 1.3 million or 1.5 million elevators a year. We have both the retrofit play and the new equipment play in both.
It's a very interesting market opportunity for us with our contactless touch solution. Interactive kiosks could be then sub-segmented according to this. We talk about vending machines, point of sales in fast food restaurants, coffee machines, ATMs, and different types of self-service kiosks. For instance, self-check-in, self-checkout at an airport, ticket machines at train stations, and similar. Elevators, I think you all know what we mean by elevators.
What we want to highlight here is that there are three main categories of companies that we are today engaged with. One group is the elevator OEMs, and they are well-known brands like Otis, KONE, ThyssenKrupp, Schindler, Hitachi, and so on. The second group that we are in contact with today is companies focusing on control panels or push buttons for elevators. They can sell them to the OEM manufacturers or in the aftermarket. The third category would be maintenance and repair companies. The elevator market in the world is slightly different arranged in the U.S., North America, than Europe, than Asia. In some markets, the OEMs themselves, they will do maintenance and repairs.
In other markets, these are third-party companies, independent tech companies, independent service companies. We, with our own sales force, but mainly with our partners, we try now to reach as many of these as possible and support them locally, because this is how we win digitally. This is very much focused on contactless touch. We still have a lot other opportunities that we are exploring, and that's the beauty of having the standardized products and the ecosystem of partners up there. We would serve also customers looking for a touch solution or a gesture sensing, and that could be in medical office equipment, white goods, transportation, other. We have several examples of other promising use cases for our products in these segments as well. Our own focus will be going forward interactive kiosks and elevators.
Looking more closely at the kiosk market, we can see that vending machines, coffee machines, and the fast food restaurant terminals at McDonald's or similar, where you order your food and your beverage, they make up the largest portion. ATMs actually is a smaller portion, and self check-in and check-out, if you would single out those, are pretty small. There is an interesting growth in all of these except ATMs, which is basically flat.
ATMs is on the decline in Western Europe and North America, but on the other hand, it's increasing in developing countries in, for instance, Africa, South America, and so on. That's why in the combination means that there's a flat market size for ATMs. Some of the OEMs we are talking to in this space, they of course cover multiple of these sub-segments. We are not focusing on just a single of them.
We are monitoring this. We see that some OEMs are stronger in some sub-segments or in some geographic regions. Overall, the volumes are very high. There's a good growth rate, and we think it's a very interesting segment to work on. Elevators is a little bit different. The world market is totally dominated by some 10 or 12 big OEM companies. We see this pie chart, Otis, Mitsubishi, Schindler, KONE, ThyssenKrupp, Hitachi, so on, and some Chinese. The biggest growth in installed volumes we can see in China and other parts of Southeast Asia. Because there is a huge installed base also in North America and Europe, and they will be serviced and refurbished and upgraded on a regular basis, it's very much an active market also in these developed countries.
As we say, we have a play both with the big OEMs and the control panel companies and the maintenance and service companies. We can do both retrofit and new equipment. Elevators is also super interesting for us and promising. I mentioned before that we work both with direct sales and with different types of partners. We have this year now in a very strategic way and very systematic way, working to expand our partner network. From before, from 2019, Neonode's been working with DigiKey and Serial, and they are examples of fulfillment distributors. We could add one or two more in this category later this year or beginning next year, where we see that we have a very important channel to the market is through our value-added resellers or partners.
They could be, and shown here, the companies that we are working with so far, they are a mixture of tech companies and engineering firms or both. They are typically regional or national. For instance, HY-LINE, they have headquarters in Munich in Germany, and they work mainly in the German-speaking countries in Europe. Global Electronics Co and Japan Aerospace are based in Japan. Finetek and C&V Tech are in South Korea, and they typically have a strong focus in their respective markets. We have also other partners, and they range from technology companies like Holo Industries and YesAR that work on holographic displays, and Convergence, which is a network of sales reps that we work with in the U.S.
We think this network, although it doesn't automatically mean that we have increased our sales, they are a very important tool for us to penetrate different markets and segments that we are targeting and to speed up that penetration and growth. That's why we are very happy to have these partners, and I would especially like to emphasize the value-added resellers, which we think will be important for us going forward. To see what they have been doing so far, let's look here at two success stories with elevators. Finetek from South Korea have developed a very neat retrofit solution, actually in two or three different variants that they are now promoting to customers in South Korea, both OEMs, and for new equipment and for retrofits to OEMs and local landlords and service companies.
Very similar, a company called Hong Kong Productivity Council have done a similar solution which they are promoting in Hong Kong and China. They have seen actually a good growth of their business thanks to the cooperation with us. That's a win-win both with Finetek and HKPC. That motivates them to promote our solution because it helps them to win and at the same time it helps us to win. It's really a win-win. We think it's two very good success stories. In the airport kiosk space, we have, together with a company called Happy Hover in Singapore, a good story to tell about Changi Airport, and now they're in the second or third phase of installing more contactless touch interfaces in the airport terminals at Changi. They're also expanding to other airports and to other customers besides airports and aerospace companies.
Quite similarly, Japan Airlines have picked up a proposal from Japan Aerospace to do contactless touch check-in, check-out terminals. There's a pilot ongoing at the Haneda Airport in Tokyo. Both JAL and the other, Nippon Air in Japan are very interested to install it across all their airports in Japan and all their terminals. Japan Aerospace and Happy Hover, they are actually pushing this quite hard because they feel that they can expand significantly using our technology, and at the same time, it helps us to grow and penetrate these respective markets. These are four examples of what we are doing with our value-added partners and the other value-added partners we have and tech partners we have. They are working in similar projects with their respective customers in their respective markets.
All in all, we think that this combined direct sales approach and the partner approach is very important for our future growth and success. Why do we have these two business areas when they are sort of similar and they both work with human machine interface technology? Yeah. They are separate but mutually supporting. We have different focus for the two business areas. HMI Products, sale of standardized products. HMI Solutions, here we offer customized solutions, and it's a technology licensing business. In HMI Products, we will have many customers, mainly indirect sales through distributors and partners. Typically the customers will buy and use our product as is. You see the contrast to what we do in HMI Solutions. Very few customers, mainly direct sales, and per program could be quite large development efforts. This is a solutions business.
We think the strategy is right, and there are many synergies that we can use between them about business opportunities, product ideas, partners, technology, et cetera. We feel encouraged in the progress we have made so far this year, and we will definitely continue to work on these two separate but mutually supporting business areas, and we think it's the right way for us going forward. We want to optimize and improve in each one of them, and we want to grow in each one of them. The combination is a very strong point, I think, in Neonode of 2020 and going forward. Finally, some words about our newest business area, Remote Sensing Solutions that we officially launched this year. It's a new business for us.
It's a software business where we aim at becoming a Tier 2 software supplier to Tier 1 system suppliers and OEMs in the automotive industry. The focus is, so far, 100% on driver and in-cabin monitoring. Long term, that may change, and we may also look at other types of applications for this type of AI software that we are developing. Right now, in the next years, we will be fully focused on driver and in-cabin monitoring. Our technology here is a scalable AI software platform that supports different types of driver and cabin monitoring features. It's a scalable platform. It's hardware agnostic. It has also very limited footprints. It can run on virtually any processor out there. We can achieve high performance even with a lower resolution camera, which is the main sensor input that we are using.
By having these low system requirements means that we can solve for the demands, for instance, stipulated in the European GSR and the Euro NCAP guidelines for driver monitoring features in new vehicles from 2024 and on. We can solve for that with very low system cost. This is a strong point in our offering compared to our competitors, both other Tier 2 software suppliers and Tier 1 system suppliers that sometimes have resorted to more brute force approaches and quite expensive hardware components. Again, if you get a chance to ride with a customer in an elevator, what we will always pitch is that our solution is scalable, it's hardware agnostic, low computational footprint, and we are there to help them increase safety and fulfill the legislation going forward. The main drivers in this market is safety concerns.
In the European market, for instance, the European Commission have looked very closely at driver distraction, driver drowsiness, and how this causes a lot of accidents in the traffic. In view of the sphere of vision, to try to avoid any kind of accidents, the commission in November last year published a GSR requiring an advanced driver monitoring feature in every vehicle that will be sold in the European Union from 2024 and on. It's a safety concern about the driver's state. Is he distracted? Is he falling asleep? Then linked to autonomous driving also, is the driver actually holding his hands on the steering wheel or not? Another type of safety concern is what's known as child left behind.
Especially in the U.S., there is a big debate and there's an upcoming NHTSA regulation for this type of feature so that you cannot accidentally forget your child or your pet in a locked car on a hot, sunny day. This is another type of safety concern. Also, people are realizing that you could monitor the seatbelt use and actually how you apply the seatbelt, that it's positioned right. This type of technology that we're working on here can actually support this. These are all examples of safety features. At the same time, all the OEMs in this automotive business, they are looking at comfort features. It's everything from autonomous driving, which is a safety and a comfort feature, down to very personal preferences in how you prefer your climate control or audio control in the car.
The software we are developing and the in-cabin monitoring features we can offer, they would support this type of feature in modern cars. If you, as an OEM, would invest in a camera in the cabin of the car and hardware to run software on, what we are seeing is that all of them will have a quite long list of features that they want to realize using that hardware. We have anticipated this from the beginning with our development of the MultiSensing software platform, and we can actually support a wide range of these types of safety and comfort features and still at a low cost. This is really our right to win in this space. In view of time, I will skip forward here, and say that how do we differentiate from competition?
Those of you that have followed us this year, you may also be aware about some of our competitors and may also follow them. You are just interested in automotive market, you may have understood that there's development for driver monitoring features going on. What we rely on very much is some unique proprietary software algorithms. They are AI algorithms using machine learning code. It's very tailored. In the end, our approach works well with the very lean models that take very little to execute on even a small processor. We are also relying very much on synthetic data, that supports short development cycles, excellent change management, we can upfront and with precision, calculate or estimate future development efforts.
In sum, compared to other companies working with rule-based driver monitoring software algorithms or AI-based, we are more efficient, we are faster, we are more transparent and plannable. We bring different values to our customers in this business area. With this overview of our strategy and business, I will turn the word to Maria Ek, our CFO. Maria?
Thanks, everyone. You can find our Q3 earnings release and 10-Q available for download from the Investors section of our website at neonode.com. I'd like to start with a summary of the quarter. Revenues are up by $0.2 million compared to the same quarter 2019. This is driven by sales of sensor modules, while license fees were almost flat between the years. Our operating expenses are higher than planned for the quarter, $3.0 million compared to $2.4 million the same quarter 2019. However, on a pro forma basis, removing one-time costs, our operating expenses for the Q3 2020 would equal cost 2019. Due to the above, our operating loss was up by $0.6 million compared to the same quarter 2019.
We have net revenues of $1.5 million for the Q3 of 2020, which is an increase of 14.1% from the comparable quarter last year, and almost double compared to the Q2 this year. Revenues from our solutions business consists almost exclusively of license fees and were $1.2 million during the Q3 2020 as well as 2019. However, revenues related to automotive have increased from $0.4 million- $0.5 million, while revenues from consumer electronics decreased from $0.8 million- $0.7 million. We see general lower license revenues due to slower sales in the global markets related to the COVID-19 pandemic, so the increase in automotive is a positive development. It relates to a customer project that was completed a couple of years ago that went into production in 2020, and is expected to be in production for at least five years.
In the Q3 of 2020, our customers who license our technology shipped 1.7 million devices with an average license fee of $0.69. In total, to date, more than 77 million devices with Neonode technology have been sold. Within our HMI Products business area, we have seen an increase in the number of shipped products in the Q3 , with revenues of $0.3 million compared to $0.1 million the same period last year. Most of the product sales has been through our partners in the U.S. and China, and as of end of September, we had a backlog of $0.5 million with a planned shipment within the next three quarters.
We continue also to receive purchase orders for new sensor module shipments that have increased our manufacturing activities to meet the increased demand. Our gross margin was 87% for the Q3 2020, compared to 95% the same period 2019. The decrease is due to a mix of higher product sales with gross margins ranging between 30%-50% in 2020 compared to 100% gross margin licenses in 2019. We expect this trend to continue as our sensor module sales increase as a percentage of our total revenues. Operating expenses increased by 25% to $3.0 million for the Q3 2020 compared to 2019, which is due to one-time costs, partly offset by lower payroll costs and less traveling. Excluding the one-time costs, our operating expenses would have decreased by 2%.
Our net loss for the Q3 2020 was $1.7 million, or $0.16 per share, compared to a net loss of $1.1 million or $0.12 per share for the Q3 2019. Excluding the one-time costs, our net loss for the Q3 would have been $1.1 million or $0.11 per share. Net cash used in operating activities during the Q3 2020 increased by $0.4 million compared to the same period last year. The main reason is the increase in net loss. We had cash and accounts receivables of $13.3 million at the end of September, which we believe is sufficient capital to position the company to capture the growing customer demand across all our business units. With that, I would like to hand back over to Urban for some closing remarks.
Thank you, Maria. In closing this presentation, I would like to highlight a few points here. First of all, that our zForce technology, which Neonode has been developing from mid-2000 and on, and that is very well patent protected by us, is an enabling technology ideally positioned to solve for a lifestyle shift to contactless touch solutions brought on by COVID-19. In comparison to other companies that now try to exploit the surge in demand for contactless solutions, actually, we have existing and proven and ready technology, and we are ramping up our production to fulfill the increase in demand that we are seeing. We see that, and we still believe that there's an enormous market opportunity for this, both in new and retrofitted equipment. We are focusing on the two very large segments, interactive kiosks and elevators.
We have a global reach. We are talking to customers, both North America, Europe, and Asia, and will continue to do so in the coming quarters and years. This is a very exciting time for us, and we continue to build orders for these products. At the same time, we are also pleased to see that we have a significant interest for our zForce and MultiSensing technologies from customers in the avionics and industrial control system industries and the automotive industry, respectively. In sum, we think that we have a good play and a good future in all three business areas. We also have, by the private placement we completed in August, adequate cash resources to grow and accelerate.
The focus for us now in the coming 12 to 18 months or so is clearly on execution, on growing sales and growing the top line. By this, we are expecting also to be able to present to you in coming calls an improved bottom line, so improved earnings. By this, we have come to the end for our presentation, and we will now open up for questions from our analysts. I will ask you, David Brunton, to moderate this. Thank you.
Okay. Christy, you want to open it up to questions?
You have a question from Viktor Westman of Redeye.
Hello. Thank you. Can you hear me?
Yes.
Okay, great. You've been doing quite a rebuild of the organization, Urban, and I just wanted to ask how long time you think it would take before we see some effects from this transformation and the changes, and what are the first effects we will see?
Yes. We are actually rebuilding Neonode from outside in and inside out. We are doing a quite massive overhaul. Of course, we try to do it in a sensible way and step by step. During the Q2 , two strong additions to our team were presented, Mr. Johan Swartz and Mr. Jonas Wærn. They head up our business unit, HMI Products and HMI Solutions respectively. They have really started to make an impact on our business and our strategy and what I present here. Also they are working to expand our own sales force and the partner network that I mentioned. Here we see examples of results already. Just the other week, Mr. Atsushi Ishii joined as a new VP of Engineering. It is too early for him to make a strong impact on what we present here, obviously.
I expect that he, together with Johan and Jonas and the rest of our team here, will have a stronger and more clear impact on our business and our strategy. We are quite excited about these new additions. Recently we also, I can mention, we hired two senior salespersons, one in the U.S. that will focus on the military and avionics market, and one in Europe, that will focus more on the industrial and elevator segments. Both of them have more than 20 years in sales and sales management positions in very relevant industries and actually working for competitors of ours. This is the way we step by step and gradually are rebuilding the team and strengthening the team. I think we will continue.
On my personal agenda, I have some more things I want to do before I say that we are done. On the other hand, in companies like this, you are never done. It will be more of a continuous development as we go forward. We always try to be agile, and we are prepared to change our plans and adjust. What we discussed with the team here last week was one example, is that in January, February, I could not see that the COVID-19 pandemic would hit us so hard, and that we will see this increase in demand for contactless touch. I think we have responded well and adjusted, in a very good agile way. This is the approach that we will take regarding our organization and recruitment and how we use our resources going forward.
Yeah. Good. You mentioned military market there. I think the military market, it's moving really fast compared to automotive, in other words, really slow. Can you say something about if it's possible to speed up the processes or arrive quicker at substantial sales in this segment?
It's right that we still work with automotive customers. We work now also try to target military customers, and we also have other customers that work in industries where typically the sales cycles are quite long, and the development cycles are also long. We have been quite open and clear about this. We think from actually beginning this year that the transformation that we are trying to achieve in Neonode will take some time, maybe a couple of years. Of course we try to shorten this time, and also use our scalable platforms and reuse a lot of the designs and developments. This is to help our customers to have a shorter time to market. This is, I think, a value in our offering to these customers that we can actually speed up things compared to their normal development.
This is thanks to our good technology platforms and also our knowhow from 15 years working on touch gesture sensing applications for printers, e-readers, automotive and medical, for instance.
Yeah. I think military and avionics is quite clear what you mean, but what do you refer to in the industrial segment? Is that the dirty, very rugged industry? Can you give some example on the sweet spots here?
Yeah. Indeed, rugged industrial applications, and that could be in, sort of, if you have actually a factory environment, it could be a production hall or something where you can have both moisture in terms of water, oil, in the air. You can have dusts, you can have also outdoor applications that should work in the wintertime in hot and cold and similar. Rugged is what we have in mind in the first place. Speaking about synergies between our HMI Products business area and HMI Solutions, I think also in kiosks and elevators, what we will see, is that especially large OEM customers in those segments, they will, I think to a larger and larger degree, ask us for more bespoke solutions that are specifically tuned and adapted to their products. Here we are.
We are still Neonode, we will definitely try to capitalize on such opportunities as well in HMI Solutions. There are these two sweet spots, if you would say, Viktor.
Yeah. Okay, good. Can you give us a short update on the pilot for the six retailers with the big self-service kiosk manufacturer? They had a quite aggressive rollout plan, if I recall. Can you say something about that?
Yes and no. Our customer, in this case, it is a leading player in the interactive kiosk market. They have a worldwide reach and a very large organization. They are quite committed still. They are pushing ahead with their own quite aggressive plans. We know that they have right now, it seems, very positive resonance from a big retail chain operating in South America. They are still working with a few chains in North America and in different parts of Asia Pacific. I don't have any more substantial news that I can share at this point. It's still looking promising, and solutions have passed some different internal approval stages at our customers. We are quite optimistic about this, how it will play out.
I can say personally, I think that the growth anyway will be step by step, for this is a very big company that we are dealing with, and they have many customers. Of course, each customer will make their own decision, and they will come one by one, I expect. I don't expect like 1st of December, for instance, that it will come an explosion of 50 new programs with this customer. It will come one by one over the next quarters. We are still optimistic and it's looking good, and we have encouraging feedback from our customer that they also think that this will fly in a very good way going forward.
Last question is, if I may, on the competing technologies for elevators and kiosks, what are the typical alternative technologies to be used there? Do you see a lot of radar or time-of-flight sensors in the market or something else?
I would say personally for kiosks and ATMs, I personally regard mobile phone apps as one serious competitor in terms of an alternative technology or alternative way of solving this problem. It's a fragmented market, some will use capacitive sensors and boost up the power in those so that they will react actually a few millimeters out. Compared to a capacitive solution, we think actually our solution is much more straightforward and better. There are also some companies doing with cameras, it will be more 3D gesture sensing. I'm sure there are also applications where radars are being used, plus voice controls. Actually, if you look at this whole market, there's everything from mobile phone apps to camera-based gesture sensing, voice control. We work in a portion where infrared is more directly competing with, say, PCAP solutions.
Overall, I think we have a very strong and compelling offer. It's simple, intuitive, and it doesn't interfere if there's an underlying display or a keypad. It works perfectly for retrofits and very easy to use, and can also be integrated very nicely in new products. In elevators, I know some elevator OEMs are promoting their own mobile phone apps, but if you think of it, how intuitive is it? If I go into an office building or apartment building that I have to pull up my mobile phone, and in this building, they happen to have an Otis elevator, I have to download the Otis app. That's annoying. We have a much more straightforward solution, and it works perfectly with the traditional type of control panels and touch buttons that you have in elevators.
For instance, the very nice solution developed by Finetek and some other companies that we work with in North America, they look magnificent. They look actually very stylish, and they work excellent. In elevators, I would say mobile phone apps and other advanced solutions, they are not so intuitive and easy to use as ours, so we have a very strong offering there.
Okay, great. Thank you very much, Urban and Maria, and David as well. Keep up the good work.
Okay. Thank you, Viktor. Thank you everyone for joining. We will publish the slide deck from this presentation on our website later today on neonode.com. I will also mention here in closing that in the slide deck, we have an appendix with some reference to market data that we have used to build up the diagrams and the pie charts that we showed during this presentation. If you're interested, look at neonode.com later today, and you can see the slide deck from this presentation. Thank you very much, and join us again for our Q4 call beginning next year. Thank you.
Thank you. This does conclude today's conference call. You may now disconnect.