While several folks have told me that most of the Surface reviews have been negative, my own look at those reviews here showcased that most are actually very favorable. But Surface is very different than the iPad, it actually looks like Microsoft’s execs sat down and thought through every shortcoming that the iPad had and made it a surface strength. You can get a real mechanical integrated keyboard, the screen is the contemporary (and best for media) panoramic type, it even has the magnetic charge chord that MacBooks have and the iPad lacks (though here the implementation needs work). It has a kickstand so you can prop it up and don’t need to buy a cover, and it runs Office, no it ships with Office. But the subtle place Apple is being hit is Apple appears to have limited the iPad because they want people to buy both an iPad and a MacBook while Microsoft has created a product that can be either a tablet or a notebook potentially providing the better value. What is also amazing is that this is a 1.0 product, the 2.0 offering could truly be amazing. To read Rob’s full article please visit http://www.technewsworld.com/story/76490.html.

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.

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It seems that the upcoming Holiday season is speeding at 100 miles per hour, with black Friday about a month away. All eyes move toward retailers, as retailers revamp their business and marketing strategies and prepare for the shopping rush, overcoming many woes that have plagued many retailers in previous quarters. Roulston Research recently hosted a Retail Roundtable on October 25, 2012 in New York with two veterans, Margaret Gilliam and Gary White, to analyze the strategies that are underway in the industry. Margaret has spent over 30 years as a Wall Street securities analyst covering all facets of retailing, including the wholesale club concept, the importance of food and entertainment to the health of shopping centers and multichannel retailing. She now manages her own research and business advisory firm, Gilliam & Co. specializing in retailing and consumer products. Gary White has also spent around 30 years in the retail industry and was the former CEO of United Retail Group and Gymboree, former Vice President of Target and the former COO at Wet Seal. Below is but a snapshot of a few of the topics discussed at the event.

Nordstrom is one of the few retailers being aggressive this season with their growth plans, specifically with Nordstrom Racks stores expansion that is estimated to be deriving around 25% of their revenue and will continue to grow by 30%. Both speakers remain optimistic on Nordstrom’s outlook. Omni-channel seems to be the topic of discussion among retailers and is spreading through the industry like an unstoppable virus. Target has begun implementation of their omni-channel approach with a smart phone app that allows you to create a shopping list from your phone mapping out the location of your items when you enter a Target store. Discussion on Target also includes the much talked about TargetCity, a location-based strategy that allows Target to reduce their square feet, shrinking into downsized outlets.  JC Penney is emerging or at least striving to become a market leader in the off price market, however TJX and Ross Stores are not to be counted out with both carrying a lot of momentum in 2012. Their is a consensus that JC Penney will need to do more than their usually coupon and low price strategy, leaning more toward the fashion customer (i.e., brand recognition). Forever 21 is on the fast track among their junior apparel segment with their fun fashion approach and are aggressively expanding their stores, with their Herald Square location reaching 30,000 square feet. Their 6 or 8 brands target a broad demographic range, from contemporary to plus sizes. Wet Seal seems to have slowed, or as some might call it a complete stop. They have a new board with no management and no clear direction. Wet Seal seems to have fallen out of the market, as far as fashion trends and their lack of focus on diversity is resulting in overlooked opportunities among Latinos, Asians and African Americans. Last but not least, Gap with all its potential, lacks that cool appeal and prices may be higher than consumers are willing to spend, given the fierce competition. If you are interested in listening to the podcast from the event or engaging Margaret or Gary in a 1 on 1 discussion please contact info@roulstonresearch.com.

The first reviews for Surface RT are in and, while there seems to be an appreciation for its hardware features, including its various keyboard covers, most reviewers are disappointed with its software selection, advising readers to wait or at even pass. As I noted in my most recent Switched On column, Windows RT is the tougher test of the appeal of the Windows 8-style environment as it lacks backward compatibility with most desktop-style apps. One way to look at Surface is Microsoft trying to get ahead of the market and making a validation statement: “Windows RT is viable, and here is how we’re supporting it.” But perhaps Microsoft really expects Surface RT to have an impact this holiday season. In that case, the Surface RT paradox is that Microsoft, far behind in the tablet market, needs to make up ground quickly and that Surface RT is not yet a compelling option from a software perspective. Arriving before Windows 8 has an opportunity to build volume, Surface RT is making the same mistakes the HP Touchpad and BlackBerry PlayBook did. The difference is that things won’t stay that way. Had Microsoft held off, say, a year on releasing an ARM version of Windows after allowing enough time for a critical mass of “Windows 8-style” apps to build on Windows 8, then Surface RT would be a much more compelling product; that will surely be the case next year. To read Ross’s full article please visit his blog in public preview at http://www.techspressive.com/surface-rt-microsoft-should-have-waited/.

 

Ross has more than 16 years of experience analyzing consumer technologies. Prior to founding Reticle Research, he was executive director and principal analyst at The NPD Group, where he provided analysis on a wide range of technology topics to clients and helped to launch several research products. Before NPD, Ross founded and developed the consumer access and technology service at Jupiter Research, where he served as vice president and chief research fellow. Ross is a senior columnist for Engadget, where he has written the Witched On column since October 2004, and a columnist for ABCNews.com and Tecca, where he writes Rubin’s Roundup. Ross has appeared on ABC, The Today Show, CNN, CNBC and Fox News and is frequently quoted by media outlets such as The New York Times, The Wall Street Journal, Bloomberg Businessweek, San Jose Mercury News, Associated Press and other leading publications. To learn more about Reticle Research please visit http://www.reticleresearch.com/.

Target announced this week that it plans on selling its credit card business to TD Bank after years of discussing the possibility. The deal is seen as a win-win for both parties because Target gets $5.9 billion of cash based on their receivables while TD Bank expands their portfolio. Target’s REDcard program has been a major success for the company since they started offering consumers a five percent discount from any purchases made in stores and on the website. The deal will still allow Target to maintain the REDcard program so a large portion of their profits will continue to come from its credit card portfolio. Dick Seesel thinks this was a good decision stating, “The move strengthens Target’s balance sheet, and presumably still allows the REDcard marketing to drive overall sales. It also signifies Target’s interest in growing new concepts (C9, CityTarget) as well as further into Canada.” To read the whole article please visit http://www.retailwire.com/blog-post/a96d7aaf-20e8-42c1-9b4d-9236f03201a3/target-sells-credit-cards-cuts-debt-focuses-on-retailing.

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.

Los Angeles based PM recommended Rent-A-Center (NASDAQ: RCII, $32.95) as a Buy at our October 8 idea lunch in the city.  The company is one of the two dominant players in the rent-to-own space.  This market has seen siginificant growth as more and more consumers are unable to get financing to purchase furniture, appliances and computers.  RCII has a mature store base that won’t expand beyond 1-2% annually, but its newer concept is likely to change the current perception about the company.  Under the Acceptance model, RCII places kiosks at other retailers’ stores and offers customers who can’t get financing from those retailers rent-to-own options.  It’s a win-win situation for everyone involved.  RAC Acceptance is already present at 882 partner stores and while its contribution is not going to move the needle too much in the next 12-18 months, it will be the key growth driver over the longer term.  RCII is led by a highly experienced management team focused on delivering shareholder value.  The company has delevered its balance sheet following a string of acquisitions and has been buying back stock.  The  stock price reflects earnings from the core business, but completely disregards potential offered by RAC Acceptance.  The presenter values the new concept at $14/share, targeting a 50% upside.

Dell recently hosted their enterprise strategy event in San Francisco showcasing what Dell has in store for future years. They have been working diligently to change it’s reputation as only producing hardware and put together a team to accomplish what companies, such as IBM, HP, and Cisco that are also focusing on IT and enterprise have not. Dell has pulled together a collection of technologies and brilliant minds that can work together and build integrated systems, solving current issues highlighted in their event that data centers are facing. Tim Morgan recently published an article detailing strives that Dell is making to accomplish their enterprise strategy. The dream team, a term coined by the article is the driving force behind Dell’s strategy and includes many key execs, such as Don Ferguson, who did stints at Microsoft and CA Technologies and was chief architect for IBM’s software group and Jai Menon, who worked for IBM as a Storage expert for 25 years. These hires and more, along with the many acquisition that Dell has implemented, which includes RNA Networks, AppAssure, Wyse, and Quest Software will be apart of a cohesive strategy to develop a integrated and software-driven IT landscape.

The Result of these major moves by Dell is the Active System 800, which precludes a whole family of Active System machines in development by Dell encompassing their converged infrastructure strategy. Dell’s converged infrastructure strategy, combining IT components, such as servers, data storage, and system software into a single, cohesive solution. The Active Systems 800 is a similar but more improved concept to Dell’s vStart family of pre-packaged stacks of servers, storage and switches designed to work together with a single product number and a set price. According to Timothy’s article, one of the key features of this system is Dell’s use of RNA Networks code to cluster and pool server-side flash, allowing it to be synchronized and pooled across multiple nodes. Simply put, the consistency of the data stored can be guaranteed as each is backed up to the appropriate medium for disaster. Furthermore, you can expect an increase in speed accessing databases and web application servers that work in a parallel fashion across multiple nodes. For more detailed information on this how system will work, please visit http://www.theregister.co.uk/2012/10/18/dell_active_system_launch/

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, 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.

Sonus Networks (NASDAQ: SONS, $1.83) was presented at our recent idea forum in Los Angeles as a Buy.   The company has the industry-leading expertise in VoIP and very strong relationships with carriers, which positions it very well to gain from the telecom operators’ ongoing transition to all IP networks.  The company’s recent acquisition of Netwok Equipment Technologies has greatly strengthened its SBC (session border controller) portfolio.  SBCs represent an important link enabling large enterprises to consolidate their data and voice networks and get the benefits of true unified communications.  Sonus has been quickly gaining share in SBCs and is well on its way to successfully implement the transition from a legacy access/trunking business to becoming an SBC-focused company.  The valuation is depressed currently on weak growth and profitability historically, but the outlook will change as SBCs make a more meaningful contribution to sales.   Based on peer multiples and top-line growth accelerating to 20% annually, the upside is 100%+.  SONS’ business has strong operating leverage.   The company’s technology and its healthy balance sheet make Sonus an attractive target for a larger competitor.