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Archos announces $90 Million revenues for 1st half of 2012, here are my expectations for the second half

Posted by Charbax on July 20th, 2012

Archos just announced a $90 Million revenue for the first half of the year. It’s decent considering Archos is a 150-employee Tablet company based in France. But it’s only a 3.5% increase of the first half of 2011. The slow growth is mostly due to unstable slowing sales for Archos in the USA (-39% over 2nd quarter 2011). But that is understandable, the US market is very volatile for a small French company to influence in a stable way.

Even as the prices for the Archos 101 G9 Turbo ICS 8GB is at an amazing low $219 it should be a no-brainer for all US consumers to buy that Archos G9 Turbo tablet now if they are looking for the best possible value in 10.1″ 1280×800 ICS (and likely JB soon) tablet.

Anyways, going forward, as I expect Archos can break the $300 Million in yearly revenues, here are some of the expectations that I have for Archos introducing new products in the next 6 months:

1. Archos G10 XS: OMAP4470 1.5Ghz with SGX544 GPU, likely one of the highest memory bandwidth and most powerful GPU on the market at possibly sub-$300 possibly 1920×1200 10.1″ launch price.
- Expect it to be among the thinnest and lightest tablets on the market of the category.
- For sub-$300 it hopefully even includes a super thin Microsoft Surface like Keyboard screen cover. Thus turning Archos G10 XS into the ultimate sub-$300 ARM Powered Laptop also.
- Tripe-booting from Android into Chrome OS and Windows RT would be nice. The hardware should officially allow/enable that.
- It’d be nice to see G10 in 7″ (optimal for jacket pockets) and 5″ (optimal for pants pockets) also.

2. Archos Elements: The initial Carbon is being shown off with a single-core Rockchip RK2918 inside and running a Google Certified Android ICS. I expect the Archos Elements line to be upgraded to Archos Nitrogen (or some other element) with a Dual-core Rockchip RK3066 and running Jelly Bean at launch. How soon for RK3066? I think as soon as next month is a possibility. The retail price for 10.1″ 1280×800 and 9.7″ RK3066 Elements should be sub-$200.
- Archos 7″ Elements should also reach sub-$100 even for a RK3066 Dual-core type. Thus nicely out-competing Google’s Nexus7 at half the price.
- I expect the Archos Elements to also work with the Keyboard screen cover also.

3. Arnova G3 and G4: Here we’re talking about the cheapest usable tablets in the world. All the way down to sub-$50 for a 7″ capacitive tablet using Rockchip RK2906 or Allwinner A13 without a HDMI output.

As I write in this thread in the forum: http://forum.archosfans.com/viewtopic.php?f=92&t=65894

I think Archos should venture into making these new products:

- Archos Google TV, compete with all of Vizio Co-Star Google TV, LG Google TV, Samsung Google TV and devices like the Nexus Q, Roku and Apple TV. The genius of Archos would be to hub tablets to the HDTV, but focus on using Google TV software if possible. Or else plain Android but aiming it towards Google TV UI when Google can provide it. $99.

- Archos Chromebook, same OMAP4470 as rest of the range. This one should be simple, but use a 13.3″ screen and full sized keyboard and mousepad as good quality as on the Ultrabooks of the market. Price it $199 and Archos becomes the number 1 most wanted Laptop brand in the world. That easy. Just make sure it runs Chrome OS or Chromium OS, whichever Google can provide for OMAP4470 today. Ingenious would be an empty 2.5″ hard drive slot for optional storage expansion but otherwise 8GB built-in Flash to run the Chrome OS is enough, 2GB RAM maybe.

I’ll add one more:

- Archos or Arnova Game Player. Around 5″ to 7″ Android tablets with gamepad buttons on each side of the screen. Optimally there should be an add-on for all Archos tablets transforming any into game players by adding gamepad buttons as a snap-on to each side of the screen, but alternatively, Archos can also sell some gameplayer devices that have those buttons integrated as core part of the product.

  • Dupont88

    What do you think of archos résults on friday?

  • http://ARMdevices.net/ Charbax

    Just fine, Archos launches about 20 new products next week, or the week, that’s the only thing that counts. The credit impot/recherche had to be paidddddd back and that’s just to be expected, you can’t ask of a 100-employee company predict their financials 5 years in advance, even huge tech companies have no idea. Either the French Government and EU invest in Archos and allows Archos to easily beat Samsung and Apple in the tablet market, or Archos just stays its small size and can remain around number 3 tablet maker in Europe and possibly in top-5 in other world regions.

  • Dupont88

    Thanks.

    I’m reading boursorama and they are so negative there on the results that this was worrying,

    PS: I dont think the tax loss they posted has anything to do with credit impot recherche (which comes as a refund of R&D investments – so cash for the company that has not to be repaid).

  • Dupont88

    le Groupe compte déployer les actions suivantes au cours des mois à venir :
    Préserver sa place sur le marché des tablettes grâce :
    Au lancement de la Génération 10 à la fin du mois d’août
    A la conquête de nouveaux clients en marque blanche
    Au développement de ventes en « BTB » associé à des interfaces et applications personnalisées
    Préparer le lancement de nouveaux produits innovants connexes aux tablettes dans les segments de la domotique et des accessoires.
    Optimiser la gestion de la chaîne logistique des stocks afin de gagner en flexibilité et réduire le besoin en fond de roulement.
    Réduire les frais fixes de la société afin de gagner en compétitivité.

  • Anjali Maiji

    it would seem the management no longer believes they can do $300m this fiscal year and are actually looking at a loss. They have announced they will take measures to reduce cash burn. Seems the CEO has cashed in millions of euros last year and possibly this year as well.

    Given what you know from the company – do you expect layoff? How is the morale in the company?

  • http://ARMdevices.net/ Charbax

    Why should they lay off, they have a hundred employees, Archos has perfectly good prospects with their whole range of upcoming products and have no reason to believe that upcoming financials aren’t going to be good. The recent tax write-off was them not being able to keep a tax credit, they had the cash to pay for it, it has nothing to do with any bad performance.

  • Anjali Maiji

    Well the tax loss did not cost them any money, it’s just an accounting write off. Nevertheless available cash at hand for archos plummeted to record low in S1 they barely have 6 months of cash

    I’m more concerned about what I read below in terms of management strategy (reduce fix cost, reduce opex) and go towards custom app development in vertical markets and no label tablets.. What is left from Archos then? Who will maintain my G9 and the 3G adaptor I bought 3 months ago (upgrading from a G8).

  • http://ARMdevices.net/ Charbax

    Those strategies are business as usual for Archos, nothing new in them being careful about spending, that’s Archos company history throughout the 10 Generations since 2001. You can excpect always more decent firmware updates support due to the nature of Android, ICS and now JB keep making it easier for device makers to keep their devices up to date. While it took 50% hacking to make Android Cupcake and Donut to work fine on Archos Gen7 tablets, it took more like 20% ICS hacking for Gen9 and it’s taking 10% hacking for Gen10. JB update for Gen9 is logical at some point before Christmas as Gen10 is released and updated to JB too (if not shipped with JB even starting next month).

  • Anjali Maiji

    So I guess I need to put my G9 I the same drawer as the G8 and buy the G10 then! May be that will save them from bankruptcy…
    :-)

  • http://ARMdevices.net/ Charbax

    There’s no reason to think Archos is anywhere near any bankruptcy. There is no reason Archos can’t sell all the G10 that they can afford to produce, same with Archos Elements and Arnova G3 and G4. The only thing one can perhaps do to help is to send an email to the French Government and explain them why it’d be a good idea to invest 1 Billion Euros in Archos so that Archos can quickly become the number 1 tablet maker in the world in front of Samsung, Asus and Apple. Explain to the French Government why it’d be good for a French tablet maker to be number 1 in the world in this market, how the investment is very secure, Archos can easily pay back the 1 Billion Euros with interests because there is all probability Archos can sell every single tablet that they produce worldwide even if with 1 Billion euros in new investment that allows Archos to sell 35 Million tablets per year instead of the 2 Million tablets per year that they currently sell.

  • Anjali Maiji

    I don’t think they will be bankrupt – they will do just OK and stay a small company loosing money one year and making money another year. I don’t think
    How do you explain that stock has be piling up in Q2 and that the company now needs to take a one off charge of 11,5 million euro to help get rid of the stock? (11,5 = 5,5m they had previously already planned for depreciation of the stock value and they just announced they added 6m more to help sell out roughly 50m euro worth of legacy products they had in warehouse at the end of June)

  • Anjali Maiji

    And I don’t think at this stage there is a market for 35m entry level products at archos price. Look at what apple is selling and their price tag. This is where the market is today, it’s not yet a mass commodity market hence the reason why archos is a bit struggling – same as all the other who try to sell a cheap device. People buying tablets today are high disposable income. Archos needs to stick around with its products until the mass market starts in a couple years. They need to stay alive for this and build up the brand and distribution channel and then they will benefit form this (if apple does not do the same thing as iPod to them)

  • http://ARMdevices.net/ Charbax

    i don’t believe Archos looses any money selling out of old stocks even when selling the old stocks at very discounted prices. It just may be that Archos wants to accelerate the clearing of old stock now to make as much space as possible for the new G10, Archos Elements and newest Arnova G3/G4 and some other new products Archos is launching. It just is logical if the newest products need more space on shelves, more effort and focus for sales teams etc so it’s normal to clear old stocks leading up to that. While there may be some small losses if large amounts of stocks are to be cleared, that’s easily made up by the profits on selling the new products at launch MSRP prices, especially when those new generation devices are sold on Archos own website and no profit share needs to be paid to resellers.

  • http://ARMdevices.net/ Charbax

    This year there is a 100 Million units market for $199 and sub-$199 tablets, that’s where Archos is best. The $500 tablet market is pretty much soon finished. Very few people still want to pay $500 for a tablet. Android tablets sell more each day than the iPad exactly because of the $50-$200 tablets being mass manufactured and mass sold out of China right now, and Archos is the leader in using that worldwide.

  • Anjali Maiji

    not quite charbax. see latest review (June 2012) by IDC for example.

    http://www.idc.com/getdoc.jsp?containerId=prUS23543712

    they see iOS tablets (so $400 price tag & beyond) making 62,5% of the market. The total market size is 107m units. 

    in 2016 there will be a 222 million units market size and then indeed possibly a market for 80 to 100 million units sub $200

    (forrester is the most bullish and they see 375 million units by 2016). you can also see one of their analysis here http://tommytoy.typepad.com/tommy-toy-pbt-consultin/2012/03/forrester-tablet-demand-explodes-creates-global-phenomenon-one-third-of-americans-will-own-a-tablet-.html where they clearly see dominance of iOS (thus expensive) till 2016

  • http://ARMdevices.net/ Charbax

    IDC and Forrester know nothing about the market, they haven’t ever been in Shenzhen to see what actually goes on, their numbers are completely bogus, Android tablets sell more than iPad and that has been going on most of the days since December 2011. The tablet market can be more than 100 million per quarter starting this quarter, that means over 400 million tablets sales rate starting this quarter. Most of those tablets are $199 Android tablets and sub-$199 Android tablets, the $500 Tablet market is finished.

  • Anjali Maiji

    come on… or you call a tablet a 3 inch screen media player…

    I’ve been many time in china, there are lots of offerings but those guys barely sell anything a few hundreds here and there.

  • http://ARMdevices.net/ Charbax

    $50 7″ Jelly Bean tablets, those have pretty much 95% of the tablet market in China, India, Brazil and Russia, if you think those countries just buy hundreds of tablets here and there, you are totally mistaken.

  • Anjali Maiji

    Where is my documented answer with data from google and a Chinese recent market share audit ? Is there censorship going on here ???

  • http://ARMdevices.net/ Charbax

    Do you believe IDC and Forrester use documents to generate their bogus quarterly “estimates”? The source is to talk to suppliers and manufacturers in China, to talk to ARM Processor suppliers, they can tell how many processors they sell, I regularly talk with the people working at Rockchip, Allwinner and all the major suppliers and manufacturers in China, they are telling me that more than 200 thousand $50-$150 Android tablets are manufactured and sold out of China EVERY DAY. That puts Android tablets quarterly output way above iPad, not even counting the tens of millions of Kindle Fires sold since December 2011 just in the USA, not counting the tens of millions of Nexus7 and Kindle Fire 2s being mass manufactured right now today to be sold worldwide imminently. Not even talking about the other tens of millions of Android tablets such as new Archos G10, Archos Elements, Arnova G3/G4 and tons of other brands preparing Android tablets to be released in the weeks and months to come on the worldwide market. Someone betting iPad sells more than Android tablets still today and still after December 2011 is way wrong about everything.

  • AnjalI Maiji

    ARM chips go in a number of devices way larger than tablets (think phones and MP3/4 players). Look at google distribution of android version and screen sizes or latest report from tablet market share in china and you”ll convince yourself that your feeling is wrong

  • http://ARMdevices.net/ Charbax

    ARM chip makers Allwinner, Rockchip, VIA, AmLogic, Telechips and a few other pretty much exclusively sell those chips for tablets, only tablets, no smartphones, few set-top-boxes (many with AmLogic, growing numbers with the other), the numbers I get out of China are for Android tablets very precisely.

  • Anjali Maiji

    I know many of these vendors.

    Look at http://www.rock-chips.com/index.php?do=news&id=139

    You will see they are in phones, mp3, mp4 etc… From their own press release

  • http://ARMdevices.net/ Charbax

    100% of the processors I get numbers about are to use in Tablets pretty much exclusively. The Rockchip processors in mp4 players and such are old ones that they don’t even really sell anymore today. Rockchip is in very few phones and those are not the same chips, the big bulk is only tablet. Same for Allwinner and the other ones I mentionned.

  • Dupont88

    so we are 2 weeks later – archos did not announce 20 products. they announced a few things including the interesting G10 101 XS but it won’t be available until october according to the marketing director of archos… will be a very difficult Q3 for Archos…

  • http://ARMdevices.net/ Charbax

    Archos 101 XS is available middle of September in Europe, that’s about 3 weeks from now, and it’s getting awesome reviews, people who understand technology thinks it’s an awesome product! Archos announced 3-4 XS (maybe also 11.6″), a 13.3″ FamilyPad is leaked, the Elements range is likely 8 different products, 3 sizes single core and 3 sizes dual-core, and next week expect Archos to show and announce a range of new super cheap Arnova products, maybe also the rumored Archos Game Player device and a range of new accessories for all of it including docks, speaker docks etc. No reason they don’t also refresh their home automation stuff including new DECT phone, new Android alarm clock etc. Archos has no problem with Q3 or Q4, they are awesome and have no problem.

  • anjali

    too bad – they just laid off 50 people… and their good prospects turned out pretty bad with a massive loss… leaving them with 6/7 months worth of cash in the bank to fund operations…

  • dupont88

    so the 101 XS was not available in september – it has actually barely been available during the full Q4… they did not refresh the dect phone, looks like they are killing it… (selling the remaining stock for 50€ on venteprivee.com)

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