|
NEWS
Sony Quietly Expanding Retail Presence
COSTA MESA, Calif. - Few people took notice
when Sony Electronics, Inc. opened a tiny storefront last
year here at South Coast Plaza, a swanky mall south of Los
Angeles. As it turns out, the small store would represent
a big change in how Sony sells its televisions, DVD players
and other gear. Since opening its first store last year,
Sony has quietly opened stores in seven other cities. The
Japanese giant will open its 11th and 12th U.S. stores this
month, in Denver and Las Vegas, and expects to have about
30 Sony Style stores in the United States by April 2006.
Some Retailers that sell Sony products worry they will lose
sales. They also worry that if the stores are successful,
other manufacturers will open stores, too. "We're going
to watch very closely what they do with these stores,"
said Tom Campbell, Vice President of Ken Cranes Home Electronics,
Inc., a chain of eight stores in Southern California. "The
manufacturer is becoming a potential competitor." Apple
Computer, Inc. has opened 84 stores nationwide since 2001.
Dell, Inc. has its own kiosks, but neither depends much
on other Retailers to sell product — at least not
to the extent that Sony, Panasonic Consumer Electronics
Co. or Samsung Electronics America, Inc. does. Abt Electronics,
which has a large store near Chicago, isn't hiding its displeasure.”
We want our Vendor to be a Vendor, not a retail competitor,"
said Mike Abt, President of the company's Internet unit.
Sony is moving into ritzy shopping malls based on a widely
held belief that conventional electronics stores do a lousy
job with women. Its storefronts sit next to Tiffany, Louis
Vuitton, Sephora and other boutiques that appeal to women
— a stark contrast to the big-box electronics stores
in strip malls. Dennis Syracuse, vice president of Sony
Style Retail, crashed a Tupperware party as part of his
research to watch how women shop. His conclusion: women
do more homework than men.
At every Sony store a "concierge desk"
greets shoppers, because company research suggested the
feature appeals to women. The aisles are wide enough for
strollers. Televisions are perched on different stands,
instead of lined in rows at the same height, to give shoppers
a better sense of how they will look in their living rooms.
One thing is certain: you won't see crowds of men huddled
at the televisions to watch college football on Saturday
afternoons. "It's a cardinal rule — don't show
sports," Syracuse said. When Samsung opened a 10,000-square-foot
showroom in Manhattan last month, executives insisted they
weren't going after anyone's sales. They called it an "unstore"
and promoted free admission, as if it were an amusement
park. Anyone who wants to buy the wares on display is sent
to a nearby Retailer. "Our moral conscience, our business
conscience, says our goal is to support (our retail) partners,"
said Peter Weedfald, Samsung's Senior Vice President of
Marketing. The Sony boutiques are a departure from two large
stores the company runs in New York and San Francisco. Sony
closed a big store on Chicago's Michigan Avenue this year.
Sony says it hasn't been hawking bargains, and comparison-shopping
around Costa Mesa confirms that. Prices at its closest competitors
were strikingly similar, although Sony sold a 42-inch plasma
TV for $8,000 — $250 more than a Circuit City eight
miles away. Best Buy matched Sony on two plasma TVs; one
DVD player was $10 more while another was $10 less.
Sony's store carried a few gadgets that weren't
sold at Best Buy or Circuit City, including its new 20-gigabyte
$400 digital music player, Sony's answer to Apple's iPod,
and its latest lightweight Vaio laptop for $3,000. When
scouting locations, Sony looks at shopping malls with the
most sales in the nation's top 50 markets and bargains for
the busiest sections of those malls. The Costa Mesa store,
which is next to Gucci, is about 6,000 square feet, roughly
one-seventh the size of a Best Buy. The tight quarters means
selection is limited to about 18 televisions, 15 computers
and 12 camcorders. The stores offer everything from $20
headphones to a $20,000 projection television.
Representatives of Best Buy and Circuit City
Stores Inc. declined to comment. Mike Fasulo, President
of Sony's eSolutions unit, which oversees the stores, invites
nearby Retailers for a sneak peak whenever he enters a new
market. He cites Sony-commissioned studies that show the
stores mean better-educated consumers — and more sales
for them, too. Still, Sony executives expect the stores
to be profitable and acknowledge that some Retailers may
be unhappy. "I haven't gotten any complaint letters
but I haven't gotten any thank-you letters either,"
Fasulo said.
Q&A with Mobile Edge CEO, David
Cartwright
By Keith Newman, ChannelMedia Editor-in-Chief
Q: David, you were one of the founders of
Targus and left to start Mobile Edge. I have to say, we
are quite impressed with your launch into the Retail Channel.
First, tell us what Mobile Edge is all about?
A: Mobile Edge is about ‘lifestyle’.
It’s a mobile world we now live in – and we
want to offer stylish, functional and technical carrying
case options that appeal to today’s consumer. The
customer may be the same, but their interaction with technology
has changed. We live in a time when mobile products have
become so integrated into our day-to-day lives that these
devices often say as much about the user as does their watch,
car, or favorite handbag. We passed the ‘function’
stage a long time ago and now it’s about ‘form’
– “what does this device and the case I carry
it in say about me, my personal style?” Given our
background, we knew this industry and the players extremely
well and we wanted to create a brand that offered a significantly
distinctive product – one that is both more stylish
than the existing options, and one that is as technologically
advanced as possible. We are convinced that our marketplace
is looking for some stylish alternatives to the black rectangular
bags that we have all been carrying for years.
Q: Tell us about your special initiatives
around “marketing to women?”
A: We realized from the outset that we were
involved in a crowded category with established players
that had long-term customer relationships. Our challenge
was to find and create significant differentiators in order
to get attention from the resellers. It’s often difficult
to differentiate ‘similar’ looking cases within
the same category – even when you are one-on-one with
a buyer – so we decided to focus on a new segment
of this market. Recently published data by the Consumer
Electronics Association, showed that women actually spend
more on electronics than men do. They account for over 52%
of all computer purchases and are involved in over 80% of
all buying decisions! This is huge data that all the CE
Retailers are keying in on now. Until now, no one has gone
to market with a line of carrying cases designed specifically
for women. Fortunately for us, we’ve got a great design
team that have been able to translate our years of experience
into Collections that would be just as at home on Rodeo
Drive or Madison Avenue. The CE Retailers know that these
women have been buying ‘fashion’ somewhere,
but it has not been at their stores. We want to help them
change that.
Q: Will you have to expand to where women
traditionally shop, like Nordstrom's or the like, or are
you trying to drive them into computer and electronic superstores
and other tech-oriented stores?
A: Our goal is to drive them into the CE channel.
This is the channel that has supported us over the years
and this is the channel that we know. We’ll do this
by building our brand in the ‘lifestyle’ publications
that women read. This past June, we were fortunate to have
the Wall Street Journal write an article on us, and we’ve
had placement in Vogue, Cosmopolitan, Lucky, Self, and others.
This is an entirely different approach that will drive new
traffic into this channel.
Q: Do you plan to expand your offering beyond
computer cases?
A: We are looking to build the Mobile
Edge brand around mobile related products. We would love
to find several very useful or unique products that would
appeal to our customer and complement the line. Our WiFi
Signal Locater is a good example of this. We know who our
customer is and will continue to offer products that fit
their lifestyle. Bottom line, we’ve all been at this
for some time and we know the pitfalls that companies fall
into as they grow. It is essential to us that our customer
base is comfortable with our brand and confident in the
products that we offer. There are no egos here; we know
what we’re good at and what we’re not.
Retail Digest - Inside Retail
CDW reported record profits
for Q3 2004. Q3 earnings rose a whopping 46%, from $44.6
million to $65.2 million! Average daily sales rose 24% to
$23.6 million from $19.1 million a year ago. Corporate sector
average daily sales were up 25% to $17.1 million. Q3 revenue
rose 24% to $1.51 billion, up from $1.22 billion a year
ago. The most astonishing results came from CDW Web sales,
which comprised 27% of total sales for Q3. Web sales increased
44% to $406 million. CDW posted double-digit unit volume
growth in desktop CPUs, software, data storage, and server
CPUs. Notebook CPUs, notebook accessories, printers, and
input devices increased 20% to 30% in unit volume compared
to Q3 2003.
The United Kingdom’s largest Retailer,
Dixon’s, finds itself in trouble
with the UK Advertising Standards Authority after placing
an ad for a Fuji Digital Camera describing it as a 4 million-pixel
output digital camera. The statement was asterisked, which
led to fine print stating that the 4 million-pixel figure
was created using in-camera interpolation software. The
pursuer said that the advertisement suggested that the Fuji
Camera’s resolution was equivalent to a more expensive
four-mega pixel camera. Dixon’s claimed that Fuji
cameras had a unique technology not directly comparable
to other brands, however, the ASA said that many consumers
were unlikely to know what was meant by “pixel output”
and “effective pixels” and that the language
in the advertisement was misleading and ambiguous.
Office Depot announced that
Neil R. Austrian, who was recently appointed as the interim
CEO of the office supplies Retailer, would receive a monthly
salary of $170,000. Austrian was appointed as the CEO of
Office Depot following the resignation of CEO Bruce Nelson
from the position. In case a new Chairman and Chief Executive
is hired in less than six months, Austrian will be eligible
to receive a minimum compensation of $1.02 million.
Consumer electronics chain, Circuit
City, recently cut down the eBay consignment testing
it undertook over this past summer. Circuit City went ahead
and closed four of its eight Trading Circuit locations citing
cost control as a reason for the downsizing. However, the
electronics Retailer wants to continue to run the experiment.
Trading Circuits is an eBay consignment drop off shop where
consumers drop off items they want sold on auction house
eBay for a commission fee of up to 35% on the sale price
of the item. All but one of the Trading Circuit locations
opened in mid-June in the greater Atlanta and Pittsburgh
areas. Circuit City wants to continue the testing on these
consignment stores and plans to decide on whether or not
it wants to keep them early next year. Best Buy is running
a similar program with AuctionDrop, where customers using
the service will receive a Best Buy gift card for the value
of the sale after commission.
Alera Technologies introduced
its advanced new Digital Photo Copy Cruiser Plus that copies
digital photos directly to CD from camera memory cards of
any capacity, without a computer, and does much more. The
new Digital Photo Copy Cruiser Plus also records CDs (both
Windows and Mac are supported), plays DVD Videos, CDs, JPEG
files, MP3 files from CDs, DVDs, and Memory Cards. You can
connect it to your TV set, Home Theater, or Mobile Theater.
A built-in rechargeable lithium ion battery is included
making the Digital Photo Copy Cruiser Plus truly portable
so you can use it anywhere.
GameStop announced that it
has purchased 6,107,338 shares of its Class B Common Stock,
held by Barnes & Noble, Inc., for $111.5 million. The
purchase was made at $18.26 per share, a 3.5% discount to
the last reported trade of GameStop's Class A Common Stock
on the New York Stock Exchange prior to the time of the
transaction. The transaction was approved by GameStop's
independent directors and funded with excess cash of $37.5
million and a promissory note in the principal amount of
$74.0 million. The note is payable in installments over
three years and bears interest at 5.5% per annum. "We
have always valued our relationship and the support given
to us by Barnes & Noble over the years, but we believe
these transactions will provide for more investors to be
attracted to GameStop's rapidly growing business and the
momentum and success we have achieved in a growing entertainment
segment," said R. Richard Fontaine, Chairman &
Chief Executive Officer.
Syntax reported on its unparalleled growth
since first introducing the Olevia line to the market approximately
six months ago. Delivering on its mission to design and
mass-produce digital convergence consumer electronics products
with superior specifications and market-leading low prices,
and support consumers of its Olevia brand with a unique
customer-friendly after-sale program, Syntax has rapidly
established broad distribution in the North American retail
sales channel, expanded distribution globally, attained
profitability, and is on track to achieve approximately
$150 million revenue and an IPO in FY 2005. According to
DisplaySearch President Ross Young, "We believe Syntax'
Olevia is the fastest growing LCD TV brand in North America.
Its attractive features, prices and broad channel strategy
are expected to result in its market share more than doubling
from 1.8% in Q2'04 to 4.9% in Q3'04."
Gateway unveiled its new
line-up of high-end discounted eMachines
desktop PCs for the Japanese market. The new eMachines,
which are ideal for consumers looking to save a buck or
two, are packed with the latest features including improved
digital media readers, larger hard drives, faster processors,
and multi-format DVD burners. The new line of eMachines
is great for a starter or second PC, and consumers can enjoy
a slew of newly improved additions such as the digital photography
and digital video editing software, 8-in-1 digital media
reader and five USB 2.0 ports, as well as an integrated
Ethernet 10/100 LAN and a 56K V.92 modem, making networking
and communication a breeze. The eMachines J2920 retails
for just 49,800 yen and is perfect for the beginner or novice
user. The PC comes integrated with a 80GB 7200RPM hard drive,
256MB of DDR SDRAM and an Intel Celeron D 330 (2.66 GHz)
processor. Also, the eMachines comes packed with digital
entertainment technology such as a DVD-ROM/CD-RW combo drive
and 8-in-1 digital media reader. The eMachines J2950 is
somewhat faster than the J2920, boasting a 160GB 7200 RPM
hard drive, and a fast Intel Celeron D 335 (2.80 GHz) processor.
Also it comes equipped with a multi-format DVD+/-RW drive
as well as 256MB of DDR SDRAM, and the 8-in-1 digital media
reader. The eMachines J2950 has a retail price of just 59,800
yen. DDR SDRAM. Gateway is proud to announce that its new
portable music player will be one of the first to support
Microsoft's new PlaysForSure program. The new Gateway portable
digital music player should be available just in time for
the holiday season and with its arrival, life for Apple
and Dell could become much more stressful. Since Gateway
and eMachines merged, the two companies have focused on
reducing costs by simplifying product lines, expanding distribution
channels, improving advertising methods, as well as improving
the quality of service offered from customer support. The
new music player is just another example of the company’s
strategy to continue offering high-end products at a fraction
of the cost. Utilizing the new Microsoft PlaysForSure program,
the Gateway portable digital music player can access a host
of online music services built upon Microsoft's Windows
Media technology. The new program was designed not only
to provide an easier way for users to access online music
networks and services, but also to bridge the time gap between
locating a favorite song and downloading the music into
one’s player.
From a new health related “EQ-Life”
store set to roll out later this year, to improvements in
customer support and education via the “Geek Squad,”
Best Buy continues to search for new ways
to boast its lead in the competitive electronic superstore
market. This week Best Buy announced its new “customer
centricity” strategy that focuses on the needs many
small-business owners incur as well as curtailing certain
advertising methods to complement individual desires. Beginning
later this month, 68 stores in California, mostly in the
Los Angeles, San Diego and San Francisco areas, will begin
directing services based on the concept of individual needs
vs. individual wants. For example, 12 or so stores will
focus on services tailored to suburban moms, while 24 other
locations will focus on the needs of small-business owners.
In addition, 16 stores will cater to family men as well
as affluent professionals. According to the Retailer, the
new “customer centricity” concept emphasizes
Best Buy’s ever growing determination to meet the
demand of every class of individual. Best Buy plans to spend
some $50 million to support its customer centricity strategy
this fiscal year and plans to roll out the new strategy
throughout the next three years.
Apple Computer proves once
again that the mere look and appeal of a product can drive
profits up and beyond expectation. The recent popularity
of Apple’s iPod and Laptops in retail and education
sectors drove fourth quarter earnings through the roof.
So much so, rival manufactures like Gateway and Dell might
think about livening up their look if they want to slow
Apple’s success in an already competitive electronics
market. Compared to last year’s earnings of $44 million,
Apple said it earned a whopping $106 million for the same
quarter of this year. Revenue for the fourth quarter was
up 37% to $2.35 billion, up from $1.7 billion in the year-ago
quarter. The company said it sold a record-breaking 2 million
iPods during the quarter, thus accounting for 23% of the
company's quarterly revenue. Apple clearly dominates the
market in portable music players and its already successful
iTunes online music download service continues to push rivals
like MusicMatch and Microsoft off to the side. According
to Apple, the iPod accounts for about 92% of unit sales
of hard-drive based players and more than 65% of the overall
portable player category. Meanwhile, Apple is extremely
proud of the growing popularity of its portable laptops.
The company stated it sold 836,000 Macintosh computers,
accounting for 52% of the company's total revenue. Sales
of laptops in the education retail sector were up 19% and
revenues up 21%, and retail store revenues climbed up 95%
from a year ago to $376 million.
PC Connection announced results
for the quarter ended September 30, 2004. Net sales for
the three months ended September 30, 2004 increased by $1.9
million, or 0.5%, to $351.3 million from $349.4 million
for the quarter ended September 30, 2003. Net income for
the quarter ended September 30, 2004, on a generally accepted
accounting principles (GAAP) basis, was $2.8 million, or
$.11 per share, compared to $2.2 million, or $.09 per share,
for the quarter ended September 30, 2003. The three-month
period ended September 30, 2004 included special charges
that reduced earnings and earnings per share. Had these
charges not been recorded, pro forma net income for the
quarter ended September 30, 2004 would have been $3.9 million,
or $.16 per share, compared to $2.2 million, or $.09 per
share, for the quarter ended September 30, 2003, a 78% increase.
The three-month period ended September 30, 2003 did not
include any special charges. Consolidated gross margins,
as a percentage of net sales, improved year over year in
the third quarter of 2004 by 90 basis points. Gross profit
margin as a percentage of net sales was 11.2% in the third
quarter of 2004, compared to 10.8% in the second quarter
of 2004, and 10.3% in the third quarter of 2003. Net sales
for the small- and medium-sized business (SMB) segment increased
by 9.1% from the third quarter of 2003 to $195.9 million
and increased sequentially by 1.0% over the immediately
preceding quarter. Sales to government and education customers
(Public Sector segment) declined for the quarter by 24.8%
over the third quarter of 2003 to $77.9 million, but increased
sequentially by 22.9% from the immediately preceding quarter.
Sales to the federal government increased sequentially by
65.7% but declined year over year by 64.8%. As announced
in August, the Company was awarded a new GSA Contract, which
allows its GovConnection subsidiary to more efficiently
market products and services to a wide variety of U.S. Government
agencies. Sales to state, local, and education customers
grew sequentially this quarter by 13.9% and year over year
by 15.1%. Gross margins for both the SMB and the Public
Sector segments improved in the quarter by 1.0% and 1.8%,
respectively, over the year ago quarter. Sales to large
corporate accounts customers increased by 16.9% from the
third quarter of 2003 to $77.5 million but decreased sequentially
by 0.6% from the immediately preceding quarter. Consolidated
annualized sales productivity increased to $2.5 million
per sales representative in the third quarter of 2004 from
$2.4 million per sales representative in the third quarter
of 2003. The total number of sales representatives increased
to 571 at September 30, 2004 from 570 at June 30, 2004 but
decreased from 580 at September 30, 2003. Notebook computer
systems and PDAs continued to be the Company's largest product
category, accounting for 21.6% of net sales in the third
quarter of 2004 compared to 20.9% of net sales for the corresponding
period a year ago. Desktop and server computer systems accounted
for 13.9% of net sales in the third quarter of 2004, compared
to 14.2% for the corresponding 2003 period. The average
selling prices of computer systems decreased 0.9% in the
third quarter of 2004 compared to the corresponding period
a year ago, but increased 4.0% compared to the second quarter
of 2004.
Virgin Electronics, the consumer
electronics arm of Richard Branson's Virgin
Group, unveiled the Virgin Electronics Boomtube line of
high-quality, portable speakers for enjoying acoustically
excellent music any time, anywhere. The Virgin Boomtube
line features satellite speakers that conveniently twist
off for great sound and true stereo separation, and twist
back on for true portability. Designed to work with nearly
any portable music source, the Virgin Boomtube line of portable
speakers transforms personal MP3 players, CD players, or
even laptop computers into a portable party. The Virgin
Boomtube product line includes two models. The $99 Virgin
Boomtube features ample two-inch aluminum speakers for great
sound and weighs in at only two pounds. The supercharged
Boomtube ex has a sub woofer-like bass tube and more than
40 watts of total system power generated from rechargeable
batteries at $199. "Music is meant to be shared, and
the new Virgin Boomtube speakers allow consumers to share
their music with volume and style never before seen in a
portable speaker system," said Greg Woock, CEO of Virgin
Electronics. "The Virgin Boomtube ex speakers are so
loud, we've included a set of our Virgin Atlantic earplugs
-- for your neighbors." Both products feature MaxxBass(TM)
technology to provide superior bass reproduction, but the
3.1 pound Virgin Boomtube ex goes one step further by incorporating
the patent-pending bass tube that includes two additional
base speakers and a bass control. The lithium-ion rechargeable
Virgin Boomtube ex plays for approximately 10 hours on a
single charge. The Virgin Boomtube lasts approximately 20
hours on a set of four AA alkaline batteries. The Boomtube
speakers make a perfect companion to the new Virgin Player
5GB, a sleek hard-drive-based digital audio player weighing
in at just 3.1 ounces. The $249 Virgin Player, announced
today in a separate release, features 25% more storage than
the leading mini-sized player, plus has a built-in FM Tuner
and dual headphone jacks.
Tumbleweed Communications
the leading provider of e-mail security and data security
solutions, announced that it has formed a distribution agreement
with Zones, Inc. that enables Zones to respond to the growing
demand for more secure e-mail communications by offering
Tumbleweed's e-mail security solutions to their growing
list of customers. More than 100 companies in the health
care industry and more than 1000 other enterprises worldwide
have turned to Tumbleweed for e-mail and data security products
to send messages and data securely, scan outbound e-mail
for compliance issues, eliminate spam and viruses, and reduce
the number of hacker and phishing attacks. Zones will provide
Tumbleweed with extended access to thousands of small to
medium-sized businesses through its proactive procurement
management process. "During the past year our partnership
with Tumbleweed has grown exponentially due to their enthusiastic
channel approach and support," said Jeff Hansen, VP
of Marketing at Zones. "Their world-class products
and services offer Zones the opportunity to supply long-term
e-mail security solutions. We look forward to providing
these security solutions to our end customers." Zones,
Inc. and its subsidiaries are single-source, multi-Vendor
direct marketing resellers ("DMR") of name-brand
information technology ("IT") products to the
small to medium sized business market, enterprise, and public
sector accounts. Zones offers over 150,000 products from
more than 2,000 Vendors, and sells these products through
outbound and inbound call center account executives, specialty
print and e-catalogs, and the Internet. "Given the
enormous demand for e-mail security, Zones will be a key
partner in our channel expansion," said Jeff Ready,
VP of Marketing for Tumbleweed. "They are committed
to providing the best technology, truly build trusting relationships
with their clients and fully understand the value and effectiveness
of our security solution."
Small businesses and personal users in the
Northeast will now have more than one primary option when
it comes to shopping for office supplies as Office
Depot begins its expansion into the area with the
opening of new stores in N. Attleboro, MA; Nashua, NH; and
Largo, MD. These stores, which are among the more than 40
that the company will open in various parts of the Northeast
this year, feature Office Depot's industry-leading Millennium
2 (M2) format.
"The Northeast is the country's least
saturated market for office supply superstores," noted
Rick Lepley, Executive Vice President of North American
Retail at Office Depot, in explaining the decision to expand
in an area in which, historically, the company has had a
limited presence: "The region contains roughly one-third
of the nation's Gross Domestic Product (GDP) and offers
high concentrations of small- and medium-sized businesses.
But to successfully enter the market, we felt a differentiated
and lower-cost retail model was required - and that's where
M2 comes in."
According to Lepley, the M2 format was developed
from the ground-up by a cross-functional task force given
one very specific mandate: reinvent the retail model by
creating a format that is less expensive to open, more efficient
to operate and easier to shop.
"As we roll out these new stores, customers
in the Northeast -- for the first time -- will have a choice,
an alternative to the only place they've been able to purchase
office supplies," Lepley said. "And what they
will find is an Office Depot store that represents a true
'destination experience' - one that is warm, colorful and
exciting, and reflects the latest thinking in everything
from product layout and signage, to replenishment and service."
Lepley added: "With M2, we are able to
offer our customers the most enjoyable and satisfying shopping
experience in the industry, because the format is intuitive,
logical and designed specifically for the way people make
purchase decisions."
For example, Lepley noted that products are
grouped in highly visible, strategically located "pods,"
with core supplies at the outer perimeter of the store (signed
for optimal visibility and easy purchase) and furniture
and technology at the center (to better support consultative
sales). According to Lepley, the extensive research conducted
for M2 indicated that customers want two specific things
when shopping at an office supply superstore: "For
basic supplies, they want convenience, including help in
getting oriented, the ability to find everything on a shopping
list and fast checkout. For technology and furniture, they
want information and advice, including assistance and support
from knowledgeable staff and the ability to touch and try
out various product options. M2 executes beautifully on
both of these fronts." Lepley noted that the initial
feedback from customers has exceeded expectations: "Our
tracking shows higher overall satisfaction scores, easier
product selection, faster checkouts and improved service
levels - all areas that we believe will lead to increased
traffic, a larger market basket and broader attachment rates
across multiple categories."
SanDisk announced the appointment
of Greg Rhine as Senior Vice President of Worldwide Sales.
With more than 15 years of technology experience from companies
such as Iomega Corporation and Palm, Inc., Rhine will report
to Nelson Chan, Executive Vice President and General Manager
of consumer and handset business. Rhine will manage the
growth and expansion of SanDisk's revenue and partnerships
in the retail consumer, handset and OEM sales channels across
the globe. His responsibilities cover a range of products
including flash memory cards, USB flash drives, TransFlash
modules for feature phones, MP3 players, card readers and
digital photo viewers. In his most recent position, Rhine
served as Vice President and General Manager of the Americas
and Asia for Iomega Corporation, where he had profit and
loss oversight for all sales, marketing, electronic commerce,
and operations functions in those regions. His focus with
Iomega was on data storage solutions for consumers and small
and medium businesses. "Greg has a diverse and deep
range of sales, marketing and operational experiences with
consumer and enterprise markets, channel development and
electronic commerce in large and pre-IPO companies,"
said Chan. "He will be instrumental in helping us forge
and execute strategies for our rapidly-growing international
business."
ATP Electronics, Inc., a
leading manufacturer in digital flash media products, announced
today its first-to-market high performance 60X 1GB SD cards.
The new ATP 60X 1GB SD cards allow consumers to take 500
to 1,000 high resolution images, up to5 hours of MPEG 4
compressed video, and up to 30 hours of MP3 music. Consumers
will no longer feel forced to trade off between picture/video
quality and storage capacity. Furthermore, 60X speed ensures
that ATP SD card will meet the performance requirements
of new generation of 5+ mega pixel digital cameras and camcorders
(DSC/DVC).
ATP previously announced the world’s
first 1GB MMC (MultiMediaCard) back in October 2003, 256MB
miniSD on December 2003 and 256MB RS-MMC on March 2004.
The new ATP 60X 1GB SD card with maximum transfer speed
of 9MB/s further validates ATP’s strength in designing
high capacity, high performance, and small form-factor flash
memory cards. With over 13 years in the memory solution
business, ATP leverages its experienced engineering team
and expertise in packaging technology to develop this 1GB
SD card. Best of all, ATP 60X SD cards are priced at competitor’s
regular speed grade cards. So OEMs and consumers get the
benefits of extra performance without the added cost.
With SD memory cards taking more flash card
market share and newer devices demanding more storage capacity,
the demand for these high capacity SD cards are expected
to increase dramatically. In addition to digital still cameras,
camcorders, audio and computer applications, which use SD
cards, more applications such as global positioning systems
(GPS) and medical imaging equipment are adopting SD cards
to fulfill their storage needs. For example, the newly announced
Navman GPS 4410 with Bluetooth technology used SD to store
map, voice and POI data. “We expect the high storage
flash card market to pick up very soon as multi-function
devices require storage and consumers have more experience
on them. ATP, as a pioneer in the high capacity flash cards
industry, has always been developing our products to meet
the demanding application coming to the market. ATP 60X
1GB SD card is compatible with the latest consumer electronic
devices, including Navman GPS 4410, Mini DV 2.2-Megapixel
camcorders from Canon, Panasonic, JVC, Sharp, and many more,”
said Danny Lin, ATP VP of Sales and Marketing.
The ATP 60X 1GB SD will be available to both
OEM and retail channels and is expected to begin volume
shipments in Q2. ATP 60X SD cards are also available in
32, 64, 128, 256 and 512MB capacities.
Logitech reported record
Q2 sales and profits, crediting robust retail sales. For
Logitech's second fiscal quarter, ended September 30, 2004,
sales were $330 million, up 12% from $294 million in the
same quarter last year. Gross margin was 33.2%, up from
31.5 a year ago. Operating income was $29.6 million, up
8% from $27.4 million last year, reflecting a 23% planned
increase in operating expenses. Net income for the quarter
was $26 million ($.54 per share), up 23% from $21.2 million
($.44 per share) in the prior year. Logitech's retail sales
were up 22% over Q2 last year, driven by vigorous sales
of cordless mice and cordless desktops, gaming peripherals
for PCs and consoles, and web cams. As anticipated, Logitech's
OEM sales declined significantly, down 24% compared to the
same quarter last year, which was part of a multi-quarter
spike in sales to Sony of console gaming peripherals.
-- Retail sales of cordless products increased
by 38%. Sales performance of cordless mice, a subset of
this category, was at an all-time high, boosted by the introduction
this quarter of the award-winning Logitech(R) MX(TM) 1000
Laser Cordless Mouse, the world's first mouse to use laser
illumination and tracking for new levels of responsiveness
and accuracy.
-- Retail sales of interactive entertainment
products increased by 53%, largely due to increased sales
of cordless game pads for the PlayStation 2 and Xbox consoles.
-- Retail sales of Logitech's video products
increased by 31% over the same quarter last year.
Targus announced the availability
of its new Active Noise Cancellation Headphones. Designed
to reduce ambient background noise and improve audio quality,
the headphones make working on a notebook computer, listening
to music on a CD player or MP3 player or watching a movie
more enjoyable whether traveling, in the office or at home.
"Targus' Active Noise Cancellation Headphones are an
ideal companion for mobile executives or commuters,"
said Henry Watanabe, Product Manager for Targus. "The
headphones are compatible with most notebook computers running
Windows or Macintosh-based operating systems, DVD players,
portable music players and in-flight entertainment systems,
or can simply be used by themselves to reduce unwanted noise
and distraction." Targus' headphones operate by using
a combination of active and passive noise cancellation.
Each ear cup contains a tiny microphone that picks up the
noise that users hear. During active noise cancellation,
the microphones feed the noise through an electric circuit
where it is processed and causes the speakers to produce
a sound that cancels out noise. This process allows audio
to sound much clearer and crisper to the user. Passive noise
cancellation results from the large size of the ear cups
and ear pads that are designed to surround and seal the
ear. This prevents a large degree of noise from entering
the headphones. With up to 15db of active noise cancellation,
Targus' headphones offer market-leading performance at an
affordable price point. The 50mm Mylar drivers also improve
the audio experience by offering dramatic bass. The headphones
include two AAA batteries that offer approximately 100 hours
of battery life. An on/off switch controls the noise cancellation
feature while the audio bypass function allows the audio
to continue functioning even when the batteries are exhausted.
The headphones are made of soft, leatherette ear cups that
completely cover the ear to provide maximum comfort during
extended use and enhance passive noise cancellation.
Valence Technology announced
that Circuit City would roll out the second
generation N-Charge Power System in all Circuit City locations.
The N-Charge Power System II is a rechargeable universal
battery solution that provides five hours of additional
notebook runtime and will be available in stores this month.
"Our engagement with Circuit City significantly extends
the reach of our N-Charge product and represents an important
milestone in expanding our customer base for this product
family," said Stephan Godevais, Chairman and CEO of
Valence. "We are excited to be working with Circuit
City -- one of the largest consumer electronics Retailers
in the country and a company that continues to find innovative
ways to add value for its customers." The N-Charge
Power System II is an easy-to-use, portable energy solution
that provides power for a wide variety of mobile electronic
devices, with compatibility for over 2,000 models of notebook
computers, mobile telephones, digital cameras and PDAs.
Mirra announced expansion
of the Mirra Personal Server into 480 Best Buy retail stores
nationwide. Mirra eliminates the complexity of managing
valuable digital photos and documents in the home by integrating
PC software, Mirra Web Services(TM), and an intelligent
storage appliance into one affordable solution. The Mirra
Personal Server provides hands-free backup, automatic file
synchronization of PCs, and free, secure photo- and file
sharing over the web. "From the very start, Mirra's
strategy was to cast a wide net in the retail distribution
channel," said Richard Mandeberg, CEO of Mirra. "We
are excited to kick off the big consumer holiday season
with an expanded presence at Best Buy, the authority with
consumers who enjoy the digital lifestyle. This expansion
gives our customers even more ways to purchase the Mirra
Personal Server in a familiar, accessible, and knowledgeable
marketplace."
"Today, many PC users require a robust
back-up capability for their home computer," said Lisa
Farrell, Business General Manager of computer peripherals
and software at Best Buy. "Best Buy is excited to offer
consumers the Mirra Personal Server, which not only enables
backup and protection, but also file sharing and access
via the web."
A recent survey conducted by Geek Squad, a 24-hour computer
support task force available in all Best Buy stores, revealed
that Americans fear losing everything on their computers
more than public speaking, an IRS audit, or death. Yet few
home users follow a strict back-up regimen, mainly because
it is too time-consuming and complicated.
Maxell Corporation of America,
the technology and marketing leader in advanced recordable
media products, today reported that recordable DVD technology
is rapidly gaining strong support and increased momentum
as a preferred backup method for small businesses. The appeal
of recordable DVD for small businesses is based on three
factors: 1) Small business-appropriate pricing for both
the drives and media; 2) The comfort level of optical disc
technology based on the familiarity with CD-based backup;
and 3) The versatility of DVD to support multiple applications
in addition to data backup, such as video, photos, graphics,
and audio storage. The escalation of small businesses jumping
on the DVD backup bandwagon in record numbers is a result
of it being both affordable and a familiar consumer technology.
A recent survey by InfoStor magazine revealed that 73% of
those using recordable CDs as a backup medium are evaluating
upgrading to recordable DVD with its 4.7 gigabyte capacity,
taking advantage of an almost 7x capacity boost in the same
compact form factor. "Almost half of all small businesses
in the U.S. use CD-R/RW for data storage, including backup
and an increasing number are adopting DVD," said Wolfgang
Schlichting, Research Director, Removable Storage at IDC.
"DVD's low media cost, combined with widespread compatibility,
are the key factors for its success in small business data
protection," he added. "DVD is a highly versatile,
high-capacity technology platform that is perfect for small
business backup requirements. It is also the ideal media
for many other applications, such as catalogs, digital media
production for training, and a delivery platform for media-rich
presentations," said Steven Pofcher, Senior Marketing
Manager at Maxell. "Very quickly, recordable DVD is
becoming an essential tool that small businesses cannot
afford to be without." The acceptance of DVD backup
is evidenced by the leading backup software Vendors that
have added recordable DVD support to their small business
backup applications. Dantz Development's Retrospect, NovaBackup
from NovaStor, Veritas Backup Exec and Computer Associates
BrightStor ARCserve Backup all support backup to recordable
DVD media, offering small business users simple, yet powerful
backup solutions to secure their business-critical data
on durable recordable DVD media. The transition to DVD backup
is unlikely to slow down any time soon, with recordable
drive prices dropping due to volume manufacturing.
According to Japanese research firm Nikkei
Market Access, global production of recordable DVD drives
jumped almost 400% in 2003, and another 100% increase is
projected this year to 7.4 million units. The arrival of
multi-function recorders that support DVD-R/W and DVD+R/W
formats in a single unit have further simplified customer
buying decisions, offering a universal DVD recording platform.
Maxell is one of the world's largest suppliers of recordable
DVD media, offering a full spectrum of write-once and rewritable
DVD media supporting DVD-R/RW, DVD+R/RW and DVD-RAM formats,
along with printable inkjet and thermal DVD discs and 8cm
Mini DVD-R discs.
RESEARCH
PRICE WATCH (CURRENT ANALYSIS)
- If the rise of the already popular online music store
continues to gain recognition among younger users, this
holiday season could possibly be one of the best shopping
seasons the electronic industry has seen since the late
1990s. Beginning in late summer, backed by great back-to-school
offers, traditional sunny summer weather, luring discount
prices, and vivid advertising methods, the U.S. consumer
electronics market has not only survived the inconsistencies
of a struggling national economy, but has, in fact, experienced
a significant increase in electronic sales across the board.
The most significant factors responsible for the rise in
electronic sales are from discounted offers and mail-in
rebates. According to the NPD Consumer Electronics Price
Watch, overall prices for popular consumer electronics goods
fell 2.1% from July. Discounted price cuts for Apple’s
popular iPod digital music players, traditional DVD players,
and plasma televisions dropped a total of 22%.
As for high-capacity portable devices, Apple's
iPod continues to dominate the market. One such reason,
besides Apple’s cool factor, is that Apple lowered
the price of its popular iPod almost $100. The 20 Gigabyte
portable iPod price fell some 7% to $289, a drop of about
$75 in the past two months.
Another part of the electronic industry responsible
for the recent upswing in sales comes from the popularity
of plasma televisions, notebooks, and DVD players. From
July to August, basic DVD player prices fell 15.7% (an all
time low), plasma TV prices were down 3.7%, and notebook
computers with 15-inch screens dipped some 4.0%. Retailers
have obviously found that lowering prices to stimulate consumer
spending has paid off. It will be interesting to see what
happens to prices over the coming holiday months. Hopefully,
Retailers and manufacturers alike will keep in line with
the Christmas spirit by curtailing high prices on popular
electronics. As a result, struggling consumers fighting
to meet the demands of the Christmas season will most certainly
spend more of their hard earned money.
PC SALES UPDATE (CURRENT
ANALYSIS) - If worldwide PC popularity continues to flourish,
this holiday season could send PC sales through the roof.
In Q3 2004, worldwide PC sales increased a whopping 12%.
Commercial demand accounts for the majority of PC sales
and yet with the Christmas season quickly approaching, consumer-driven
sales are sure to pick up the pace; thus resulting in an
outstanding Q4. Once again, Dell led the domestic market,
capturing 32.8% of Q3 market share. Dell’s Q3 2004
profits blew rival competition back after the company experienced
a 20.7% increase in profits. Domestically, Hewlett Packard
experienced the smallest increases, growing only 1.5%, while
worldwide growth climbed only 9.1%. Dell led the worldwide
market at 18.2%, followed by HP at 16.2%, IBM at 6.0%, Fujitsu/Siemens
at 3.9%, and Toshiba with 3.6%. The remaining 52.1% went
to other PC makers like Gateway, now merged with eMachines,
which actually dropped 12.4% in growth.
CEA's Annual Holiday Survey Shows Customers
are CE Focused
Seventy-six percent of U.S. consumers plan
to buy at least one consumer electronics (CE) product as
a gift during the upcoming holiday shopping season, according
to a new survey released today by the Consumer Electronics
Association (CEA). According to the results from CEA's 11th
Annual Holiday Sales and Forecast survey, consumers plan
to spend up to three percent more on the holidays this year,
rising from 19% to 22%. With this increase, says CEA, Retailers
should expect to see flourishing sales of digital cameras,
DVD players, cordless phones, game systems, wireless phones,
desktop computers, laptops and notebooks, portable MP3 players
and HDTV.
"Year-after-year, consumer electronics
products dominate holiday wish lists and all indications
show that consumer electronics Retailers are in for another
strong holiday season," said Gary Shapiro, President
and CEO of CEA. "The products produced by our industry
truly are the gifts that keep on giving. They provide consumers
'anywhere/anytime' access to loved ones, music, movies,
information and educational content as well as help increase
our security. They are fun, cool, hip and become an almost
essential part of our lifestyles and workstyles."
The number one planned CE gift item for this
year is the digital camera displacing DVD players at the
top of the "planned gift" list for the first time
in years. Consumer interest in buying a digital camera increased
five points from last year, from 24% to 29%. Overall interest
in purchasing DVD players declined six points from last
year, from 31% to 25%. For the first time, CEA's Holiday
Sales and Forecast explores interest in purchasing gift
certificates for holiday gift giving. An astonishing, 30%
of respondents said they would purchase a gift certificate
from a CE Retailer. This is higher than the planned gift
purchase of any individual CE category. The survey also
found that the number one desired gift item this season
is the plasma TV. Nine percent of CE gift buyers plan to
purchase a plasma TV as a gift. Ranked in order following
the plasma TV, other desired gifts this holiday season include
the digital camera, a notebook or laptop computer, a color
TV 27-inches or larger and a portable MP3 player. The survey
found more good news for Retailers. Despite a number of
uncertainties facing the U.S. economy, 24% of consumers
believe the economy is better than it was last year. That
is a noticeable improvement from the 20% of consumers who
felt that way last year. Most consumers have several people
to buy for during the holidays. On average, the typical
U.S. household is expected to spend around $600 on gifts
alone, for a total of more than $63 billion.
For a list of available reports and
purchasing information, visit www.eBrain.org
or send an e-mail request to info@eBrain.org.
|
