The biggest and newest player in the hoverboard market says it can bring an end to widespread safety concerns plaguing the industry, which have been sparked by numerous reports of battery fires and malfunctioning knock-off devices.
Razor USA, best known for its eponymous scooter, bought its way into the market in November by acquiring the rights to the Hovertrax brand and patents. It is already selling a $600 device on the websites of major retailers including Walmart, Amazon and Target, and plans to launch it in stores next year. The company says the presence of a well-known brand on store shelves will help address the confusion and concern in a market currently flooded with generic products.
"The genie can go back in the bottle," said Razor USA founder Carlton Calvin, 54, in an interview with BuzzFeed News.
The genie: dozens of small distributors that buy the boards in bulk from factories in manufacturing hubs in China, where copyright protection is scant and quality standards are largely left up to the customer.
Over the past six months, as a host of celebrities have promoted hoverboards on social media and engendered a commercial frenzy, the market has lacked a brand name, atomizing instead into countless small names like IO Hawk, PhunkeeDuck, Souljaboard and Swagway. The items are sold online, at mall kiosks and through small retailers, but so far no big national chain has put them on its shelves.
Without getting into specifics, Calvin said he has a two-pronged approach for combating the legion of smaller hoverboard concerns: Lawsuits and marketing.
"We're going to enforce our patent rights,' he said, "and we're also going to play to our strength which is quality and safety. There is a place you can call up with an 800 number right on the box."
That's key given recent reports of hoverboards spontaneously bursting into flames, prompting major U.S. airlines to ban the devices from carry-on and checked luggage.
Calvin thinks Razor can fight those fears by attaching its name to the product class.
"This is what we do," he said. "We have a brand name we are keen on protecting."
In China, where sourcing and supply chain networks are often opaque, Razor has the advantage of already having major experience and infrastructure, Calvin said. The company employs 30 people in its Shanghai and Shenzhen offices whose job is to source quality components.
Calvin is also treading familiar ground with patent and distribution issues: in the early 2000s, he sued more than 20 sellers of copycat Razor scooters and received injunctions against them. He's also been working with most of America's biggest retailers for more than a decade to sell the Razor scooter and other toys from the company.
For most of the last year, Razor has been trying to get into the hoverboard business. In its deal to acquire the Hovertrax, it got lucky on the second try.
Earlier this year, after months of negotiations over exclusive rights to sell a self-balancing, two wheeled scooter, Calvin watched as billionaire Mark Cuban swept in to partner with patent holder Shane Chen. The scooter company, famous for its eponymous device, had been so serious about buying the hoverboard patent that it had developed a prototype; now Calvin had to put the board on ice as the outspoken Cuban told the media that Hovertrax was his.
"He came in so hard that he took it away from Razor," Calvin said.
Then in September at the Dallas Toy Fair, Calvin heard from participating retailers that the deal between Cuban and Chen hadn't been finalized, and there might still be time to act. So Calvin reached back out to Chen, who agreed to license his patent to Razor, with whom he had previously worked on another toy.
And in November, as BuzzFeed News reported, Razor announced that it had acquired exclusive rights to Chen's patent.
The Hovertrax is currently available online at Razor USA's website, Amazon, and the websites for Walmart, Target, Kmart, Sears, Sports Authority and Toys 'R' Us. Calvin said that he hopes it will be available in stores by the spring.
He also said it's possible that hoverboards could eventually make up 50% of Razor USA's business. That's not crazy talk — in a peak year for Razor's once-trendy RipStik caster boards, the product accounted for 35% of sales. And RipStiks didn't draw the kind of attention hoverboards have attracted.
He acknowledges that the $600 price tag is steep. After all, a new PlayStation 4 is listed for $350 at GameStop while an electric Razor scooter costs $110 at Walmart.
While he hopes to make the Hovertrax more affordable over time, he believes the demand for the product is there and that it isn't a flash-in-the-pan item.
And as far as the name goes, literalists can take heart: Calvin dislikes "hoverboards," though for an unexpected reason. He thinks that it derives from copycatters stealing the first part of the "Hovertrax" name from Shane Chen. So the name may be one genie that Razor cannot put back in the bottle.
Joe Bernstein is a senior technology reporter for BuzzFeed News and is based in New York.
Contact Joseph Bernstein at firstname.lastname@example.org.
Sapna Maheshwari is a business reporter for BuzzFeed News and is based in New York. Maheshwari reports on retail and e-commerce.
Contact Sapna Maheshwari at email@example.com.
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