What Does The Latest Privacy Phone Update Mean For MGT Capital Investments Inc (OTCMKTS:MGTI)?

MGT Capital Investments Inc. (OTCMKTS:MGTI) is a company that we have come back to on quite a few occasions over the last 12 months or so, and we have seen a number of pivots and strategic developments influence our thesis throughout this period. With McAfee at the helm, we expected a roller coaster, but perhaps not quite to the degree that we have seen. All things considered, and to this point, we have remained long-term bullish on MGT's potential, with this potential rooted in McAfee's involvement. Whatever follows him around, he's a smart guy, and a look at some of his recent appearances at various global security and technology conferences is enough to show that he is actually actively involved in trying to change the areas of technology within which MGT operates.Anyway, the company just put out a fresh release clarifying the structure of a fresh arm of operations (first announced early this year) and it is worth taking a look at the announcement in an attempt to figure out how it plays into our thesis going forward.So, let's do just that.The news relates to the company's efforts to create a secure and (virtually) hack-proof smartphone. As noted, we first got word of this so-called privacy phone earlier in the year, when MGT announced a collaboration with an entity called Nordic IT. The latest news details the forming of a joint venture between the latter and MGT, which puts together a 50-50 equity partnership in an entity called JMPP. Within the announcement there is some suggestion that the freshly formed entity will seek outside investment, however, it's really too early to factor this into our expectations going forward – at least for now.Under the terms of the agreement, MGT is going to design and manufacture the phone (through the JMPP entity) while Nordic will take care of the sales and marketing side of the equation. That's a decent setup in our opinion.We actually saw the start of this sales marketing effort with a prelaunch type offering, whereby customers could pick up a voucher for a $199 discount on the phone as and when it is released. However, according to the latest communication, MGT has yanked this prelaunch because it consumed too much of the company's limited resources. Apparently, potential customers were trying to ascertain information as to the specifications of the device, and as far as we can tell, McAfee doesn't even have the specs in-hand right now.The plan is to have the phone developed to prototype by the end of the year, and then to launch in Barcelona in 2018 at the World Congress Conference in February.That's the phone, we also got an update on a couple more aspects of MGT with the release. We aren't going to go into these in too much detail, but by way of a quick note, the Sentinel product should hit shelves in June and the bitcoin mining facility is producing around 100 BTC monthly, running at 5.0 PH/s. At current prices, that's around $160K bitcoin derived revenues monthly.So how does all this play into our thesis?In all honesty, it doesn't change much. The success or failure of this phone is going to pivot on how the company can market it, and that side of the picture is under the control of Nordic – at least in execution, that is. Near term, we want to see the company hit its slated June release date for the above-noted Sentinel as indicative of some operational progress. We'd also like to see some numbers indicative of the interest in the privacy phone's prelaunch, so as to gain some insight into commercial demand for a product like that which MGT is trying to create.If the last twelve months is anything to go by, don't expect this one to be a smooth ride between now and Barcelona next February.We will be updating our subscribers as soon as we know more. For the latest updates on MGTI, sign up below!Disclosure: We have no position in MGTI and have not been compensated for this article.