(Updates stock price, adds quotes from CEO)
By Stephen Nellis
SAN FRANCISCO, April 5 Taser International Inc
, maker of the eponymous device used by police to stun
and incapacitate a person temporarily, is changing its name to
Axon as it pushes further into the software business.
The Axon name comes from Taser's unit that sells police body
cameras, patrol car cameras and the software for managing the
hours of digital footage they generate.
In a gamble that police departments will sign up for paid
software subscriptions, the company is offering free body
cameras to police officers in addition to a year of free access
to Evidence.com, its online software for managing video and
Shares of the company closed down 0.5 percent at $21.90,
after rising more than 6 percent in anticipation of a company
Taser still gets the bulk of its revenue from its weapons,
which use electrical current to immobilize targets. Last year,
$202.6 million of its $268.2 million in revenue came from its
weapons segment, mostly in the form of replacement cartridges.
But Chief Executive Officer Rick Smith said the Taser brand
name can be "polarizing" because of its association with the
company's weapons. The weapons are popular among police but have
been criticized by groups such as the American Civil Liberties
Union, mainly because of deaths caused by Tasers.
Taser will continue to use the Taser brand for its weapons
products. The Axon brand will let the company market its cameras
and records management software to police departments without
the controversy the Taser brand can generate, Smith said.
"The thing we saw with Axon is that it's a less polarizing
brand," Smith told Reuters. "We're never going to run from
Taser. It's something we're proud of, and we think the facts are
on our side. But we don't want to be having the Taser debate
every time we talk about something else."
Nearly a quarter of Taser's revenue now comes from the Axon
segment. Software revenue for Evidence.com nearly doubled to
"The hardware creates an issue for police departments in a
sense that you're creating hours and hours of raw data," said
Steve Dyer, senior research analyst for Craig-Hallum Capital
Group. "You have the question not only of how to store the data
in an industry that is not traditionally that tech savvy, but
also how to handle digital evidence with the same safeguards as
Evidence.com software is sold on a subscription basis,
typically five-year contracts. That means Taser has to spend
money to sign up customers, while revenue follows over the
length of the contract.
Software companies including Salesforce.com Inc or
Workday Inc have persuaded investors to accept this
revenue model. But it can cut into profits in the short term:
Taser's profits dipped from $19.9 million to $17.2 million last
year despite strong revenue growth.
(Reporting by Stephen Nellis, additional reporting by Noel
Randewich; Editing by Jonathan Weber, Andrew Hay and Lisa