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Archive for April 21st, 2011

Archos dominates tablet sales at Hong Kong Golden Computer Market

Posted by Charbax on 21st April 2011

Archos surely seems to dominate in terms of nearly every store in Hong Kong that sells tablets have a range of Archos Gen8 tablets for sale right there at prime shelf space, while very few have the iPad or Samsung Galaxy Tab for sale. It seems consumers and gadget retailers in Hong Kong Electronics Market regard Archos as great value, even as there might be cheaper “Archos Home Tablet” or “Arnova” grade tablets also being sold there, consumers who want high-end experience for low to mid-range pricing, still overwhelmingly choose the Archos tablets.

ABI Research recently speculated that Archos as being the third largest tablet maker worldwide in 2010. If Apple still has 85% in Q1 2011 and with 4.69 million iPads sold, that means Archos would have had to only sell 110 thousand tablets worldwide between January-March 2011 to remain at that 2% 2010 ABI Research speculative worldwide tablet market share.

My theory, Archos probably has more than 6% global tablet market share today

Archos officially released their Q1 earnings at 39€ Million ($56.7 Million) (up 158% from a year before), if an average Archos tablet is sold at $150 to retailers, that would mean Archos may have sold 378 thousand tablets between January and March 2011, that’s thus probably more than 6% worldwide tablet market share for Archos if Apple has 85%.

One things for certain, while the global market share is one thing, another is regional tablet market share, Archos was shown to have over 22% tablet marketshare in November-December 2010 sales for tablets in France, and may thus also have much higher than 6% tablet marketshare in markets like Germany, England, Hong Kong and even the USA.

Another thing to consider, Archos can only have as much marketshare as it can afford to build for.

If you consider Apple may have about 80% tablet market share in Q1 2011, and Archos let’s say 8% in that same period, here are some of the differences between those two companies:

  • Archos has less than 150 employees mostly based in France, $56.7 Million Q1 2011 revenues, Market Capitalisation at $215,34 Million, probably has less than $20 Million in the bank to use for production enhancements, sales channels increase, marketing, manufacturing capacity increase, and R&D investments.
  • Apple has 49,400 employees (329x more than Archos) mostly based in the USA, $24.6 Billion Q1 2011 revenues (433x more than Archos), Market Capitalisation at $223,77 Billion (1039x more than Archos), probably has over $40 Billion in the bank to use for production enhancements (2000x more than Archos), sales channels increase, marketing, manufacturing capacity increase, and R&D investments.

This is why Archos has started today issuing a capital increase of upwards $43 Million, a call to their investors to invest more money in new Archos stock. If investors answer the call (by May 4th), Archos may triple their bank account size, thus having more money to spend on increasing production capacity, smoothing sales channels, optimizing software/hardware R&D efficiency, and may gear up for trying to reach upwards 24% global tablet marketshare by the end of the year.

Considering the many new entrants to the tablet market, including major ones like Asus, Acer, Dell, Toshiba, Lenovo, etc, it might be hard for a small company like Archos to reach 24% marketshare in such a rapidly growing market. But who knows, in my opinion, it’s mostly a matter of cash, investments and being able to provide the best value. While Archos may triple their sales having 3x more cash in the bank for tripling production capacity (considering they can easily sell everything that they make), that does not mean they would triple their marketshare if the tablet market at the same time more than doubles in size. They might go from 8% to 12%, something like that. And if the tablet market triples in size they could remain at 8% in a 3x larger market.

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