Notes from Deutsche Auto confrence in Detroit and Auto Show

The US auto maker is back.  There was no doubt that the new models at the show and some of the most discussed new technologies revolved around US companies and some of their innovation.  Last week we discussed VIA and some of their unique retrofitting of fleet trucks.  This really is a game changer, as instead of creating a new car they are simply putting their unique drive train technology into GM pick ups and vans for utility and constructions fleets to be much more efficient.  Although private, they feature PG and E management discussing $7,000 annual maintenance savings per truck due to primarily braking advantages and millions in gas savings.  With only retrofit costs added incrementally to the sticker price of the original vehicle and the portable power generation capability of the vehicle, it changes the paradigm for fleets.

Notes from ICR conference

At ICR, there were companies like Limited, LULU, Express, DSW, Zumiez and others of notably seeing continuing strong trends. We found it interesting how few were going from positive to outright negative. Then again, there were a number of companies where things have been negative and new managements and strategies were discussed. A few names that struck us were Pac Sun, Hot Topic, LIZ and a few others where changes are in process and management focus could make a difference. Urban made a jolting change right before the meeting and will be interesting to watch next steps.

A real lack of clearly identifiable changes seemed to be the case, but some management follow up might be very timely as some of these strategies and management changes as well as others of companies not at show may be of interest. Continue to hear JCP Sears and department stores and transitions, situations of both opportunity and risk. If some of the management changes can revitalize downsized companies and others can rightsize operations, we are in a unique retail environment of opportunity. The high end shopper and European markets may see some headwinds and responses will take more management competency than just reliance on macro factors.

Roulston Retail Partner Dick Seesel on the Recent Shakeup at Urban Outfitters

Last week Urban Outfitters announced that CEO Glen Senk had resigned to pursue other opportunities and that founder Richard Hayne would be taking over immediately. The news came after net income at the Urban Outfitters decreased four quarters in a row and the stock took a big hit after the announcement. Investors perceived that Richard Hayne is not the right fit to lead the company long-term into the new and changing retail environment. Dick states, “It’s obviously a period of uncertainty for Urban, not just because of its recent sales performance but also because of a failed transition at the top of the company. It’s also hard to say whether Mr. Hayne is in place as a transitional figure before turning over the reins, or plans to stick around for awhile.” This has happened at other companies in the past since it is challenging for a founder to find a suitable successor. It is unclear at the moment how the change will affect Urban’s strategy moving into the coming years with it’s two top brands (Urban Outfitters and Anthropologie) struggling to adapt to the new and changing industry trends where competitors have had more success. Dick explains, “Without knowing the internal politics at URBN, it’s clear that the company is losing share in an environment where many other junior/trend retailers are doing well.” To read the full posting please visit http://retailinginfocus.wordpress.com/2012/01/16/un-changing-of-the-guard-at-urban/.

Richard Seesel is the Manager and owner of Retailing In Focus, LLC. He was most recently a Senior Vice President and Divisional Merchandise Manager at Kohl’s Department Stores. Dick is proud to have helped Kohl’s grow from 18 stores to a national retail powerhouse, during an era of change and consolidation throughout the retail industry.

Roulston Technology Partner Carl Johnson on Outlook for Semi-Conductor Chip and Equipment Industries

Carl Johnson, President of Infrastructure, believes that the Semi-Conductor chip and equipment industries will do a little better in 2012 than the previous year barring any major unforeseen changes. The chip market in particular is tied to the end market and is expected to grow at the 3-5% level. Over the past several months there have been a significant jump in capital equipment orders and the inventory levels have shown surprising upside. Several companies, like Texas Instruments, have announced disappointing results but the forward numbers will be of importance not what they have done in the past. One of the big stories heading into 2012 Lam Research’s purchase of Novellus Systems for $3.3 billion in stock as they look to battle market leader Applied Materials. The acquisition allows both companies to cut expenses and since both companies work at different stages of the manufacturing process there are a lot of potential synergies.

Carl Johnson is the President of Infrastructure, providing editorial strategy and oversight. A co-founder, he has studied the semiconductor, semiconductor equipment/materials and related industries for over 16 years. Earlier, he spent more than 10 years on Wall Street with Merrill Lynch and Piper Jaffray. Carl is past Chairman of SEMI’s Strategic Business Conference Committee and is a member of SEMI’s Southwest Steering Committee. He is also a Research Fellow at Coburn Ventures. He has authored numerous columns for trade and financial publications and is frequently an invited speaker on technology industry trends and investments at both public and private events.

Roulston Research’s Trip to the North American International Auto Show

Roulston Research recently made the trip to Detroit for the North American International Auto Show to see VIA Motors press conference and reception. VIA Motors has developed the first extended range electric powertrain capable of replacing the V8 engine and they will be introducing the world’s first line of eREV Trucks, Vans, and SUV’s. The E-REV powertrain enables larger 4WD vehicles, including SUVs and light trucks, to drive the first 40 miles in all-electric mode with near zero emissions, and a full range of 400 miles on a single fill-up. Since it is electric the vehicle will also be able to be a power export so if you are on the go you can have electricity whenever you need it. Chevy Volt creator and VIA Board member Bob Lutz and COO Alan Perinton presented to a full crowd in attendance. To learn more about VIA Motors and their product offering please visit here and to see Bob Lutz’s recent interview about VIA on CNBC follow http://video.cnbc.com/gallery/?video=3000065343.

Roulston Retail Partner Dick Seesel on Apple and Target Partnership

Apple is expected to launch a store within a store concept at two dozen Target locations this year that are expected to be in smaller cities that aren’t large enough to support a standalone Apple Store. Apple has similar in-store shops inside over 600 Best Buy locations. Target has always had a good relationship with Apple becoming the second retailer in 2002 to offer the original iPod and was the first retailer outside of Best Buy to begin selling the iPad. Dick believes this looks like a win for both companies. There is nothing in the joint history of Apple and Target to suggest that a better in-store presentation will tarnish the brand. (After all, the product is already there and Target is not discounting it.) Provided that Target can execute close to the service standard of the Apple Store (maybe not complete with a Genius Bar), it’s a good way to expand Apple’s distribution in a controlled way. To read the full article please visit http://www.retailwire.com/blog-post/0ba36740-b064-4bb6-ab8e-448ccaa059aa/report-apple-to-open-in-store-shops-in-target.

Richard Seesel is the Manager and owner of Retailing In Focus, LLC. He was most recently a Senior Vice President and Divisional Merchandise Manager at Kohl’s Department Stores. Dick is proud to have helped Kohl’s grow from 18 stores to a national retail powerhouse, during an era of change and consolidation throughout the retail industry.

Roulston Technology Partner Rob Enderle on Search Rivalry between Google and Microsoft

The competition between Google and Microsoft in the search industry was very intense in 2011 even though there was no game changer introduced by either company. The growing competition between the two companies is great news for users because it will result in more innovation and new search features. After starting off slow Microsoft’s Bing started picking up traction after they formed a partnership deal with Yahoo in 2009 and over the following two years Bing’s market share has nearly doubled. In fact, in 2011 Google’s market share fell below 65% for the first time in two years. Rob believes Microsoft’s investment in Bing is starting to pay off stating, “They increasingly appeared as the nicer, more interesting alternative to Google search.” Microsoft’s major win this year came from it’s partnerships with market leading social partners Facebook and Twitter while Google has only formed a relationship with it’s own social network Google+. This may be a major opportunity for Bing because Google+ does not have near the subscribers as its market leading counterparts. Both companies are hoping to come up with a market changer in 2012, which potentially will come from the mobile market as search will attempt to work its way into every smartphone app in some manner. To read the full article please visit http://news.idg.no/cw/art.cfm?id=C6464F28-96D7-9198-881DAA42DD4E404A.

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward looking emerging technology advisory firm. He specializes in providing rapid perspectives and suggested tactics and strategies to a large number of clients dealing with rapidly changing global events.

Roulston Technology Partner Timothy Prickett Morgan on Oracle’s Struggles

Oracle recently missed its projections for both hardware revenues and new software license sales in its second quarter of fiscal 2012 which left investors concerned about the software giant. Oracle’s sales were up only 2% to $8.79 billion, which was lower than the projected 5-9% guidance given by the company, while net income rose a healthy 17 percent. The primary reason for the lower than projected revenue growth was because hardware sales (standalone servers and “engineered systems” that combine servers, storage, switching, and systems software) fell 14% to $953 million. The company said they were seeing good demand for their new Sparc T4 servers, but some of that demand might have cost sales to their Sparc T3 machines with customers instead waiting for the new machine. One bright spot for Oracle’s hardware side was that the Exadata cluster systems had record bookings and Exalogic middleware cluster sales doubled and are growing at twice the rate of Exadata systems at the same point in their product cycles. While problems on the hardware side were somewhat expected, it came as a major surprise that new software license sales only grew 2% year over year compared with the projected 6-16%. The street took this as a major negative and the stock has taken a major hit since Oracle announced earnings. It will be interesting to see if Oracle will be able to rebound in 2012 and to read the full article please visit http://www.theregister.co.uk/2011/12/21/oracle_q2_f2012_numbers/.

Tim Morgan is the Systems Editor of the UK based Register and is President and Editor in Chief of IT Jungle. He has been keeping a keen eye on the midrange system and server markets for 15 years, and was one of the founding editors of The Four Hundred, the industry’s first subscription-based monthly newsletter devoted exclusively to the IBM AS/400 minicomputer, established in 1989. For the past decade, Prickett Morgan has also performed in-depth market and technical studies on behalf of computer hardware and software vendors that helped them bring their products to the AS/400 market or move them beyond the IBM midrange into the computer market at large.