67 WALL STREET, New York - July 10, 2012 - The Wall Street Transcript has just published its Electronic Components Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Electronics Manufacturing Supply Chain - Secular Connector Demand Growth - Automotive, Data Center and Mobile Spending - Component Price Erosion
Companies include: AVX Corp. (AVX); Arrow Electronics (ARW); RELM Wireless Corporation (RWC); T-Mobile (DTE.DE); and many more.
In the following brief excerpt from the Electronic Components Report, expert analysts discuss the outlook for the sector and for investors.
Paul D. Arling is Chairman and Chief Executive Officer of Universal Electronics. He joined Universal Electronics in May 1996 as Chief Financial Officer and was named to the company's board of directors in August 1996. He was appointed President and Chief Operating Officer in September 1998, was promoted to CEO in October 2000 and appointed Chairman in July 2001. Before Universal Electronics, Mr. Arling was with Lesco, Inc., a manufacturer and distributor of professional turf-care products. He served in various capacities at Lesco from 1993 to 1996, including Director of Corporate Planning, Controller and, ultimately, CFO. Before joining Lesco, Mr. Arling was Director of Planning for Imperial Wallcoverings, Inc. He also provided strategic management consulting services at the Michael Allen Company. Mr. Arling holds a B.S. in economics and an MBA from The Wharton School of the University of Pennsylvania.
TWST: Please start with a brief overview and historical sketch of Universal Electronics.
Mr. Arling: Universal Electronics (UEIC), or UEI, was founded just over 25 years ago on the idea of one product, a universal remote control that could operate all of your audio/visual devices. The company has grown throughout that time. In fact, this year, we've past our one billionth unit shipped. While it took us almost 25 years to hit the first billion, I expect we hit our next billion within the next five years. So the pace of change has quickened, the number of devices has grown.Obviously, our collection of device codes has grown significantly, particularly in the last five to 10 years. The home is becoming increasingly complex, and UEI offers the control technologies and traditional products on chips and on new platforms, such as smartphones and tablets, to power all of the home entertainment devices within your home.
TWST: UEI has been a dominant leader in the home entertainment control space for some time now. What sets the company apart from its competition?
Mr. Arling: Our point of differentiation starts with our approach to the products. We focus first on identifying problems consumers face in their home entertainment control experience and set our teams to solve those problems. While many of our competitors focus on integrating technology into remotes, we ask our team to figure out how best to apply new technologies to improve the user experience.
Take QuickSet, for instance. Its primary goal is to simplify the universal control setup experience. We identified three key issues that consumers face with today's remote controls: one, programming instructions can be difficult to follow; two, the codes in the remote often do not support the latest brands on the market; and three, users do not want to spend time going through multiple codes to find the right one for their system.Our teams came up with an intuitive-menu-drive user interface that works on your TV or tablet that presents a simple three-screen process to set up their remote. We then put our entire IR code database online so consumers can access the latest IR codes through the cloud. And finally, we set about leveraging existing low-cost technologies to enable two-way communication between the remote and the set top.We launched QuickSet three years ago. Today, it has been universally adopted by all the major service providers in North America, and we are involved in many development projects across the globe as well as becoming a de facto feature in all future connected TVs.
TWST: What is happening as far as innovation and the pace of technology?
Mr. Arling: Today, 2012, we are at a major crossroads in the industry as the battle wages around us for how to deliver and engage consumers with entertainment content in the home. While many of our customers are introducing innovative products and services to deliver the waterfall of content in everchanging platforms, such as over-the-top, OTT, set-top boxes, game consoles, connected TVs and even tablets, the basic premise of user control still stands. Consumers want a simple and intuitive experience when it comes to finding, selecting and controlling content no matter which device is delivering the content.We are actively developing control solutions that can recognize all the various components in the audio/video stack automatically, know how they operate and how they are connected, and give consumers the power to control all those devices using a simple "laid back" traditional remote control or a more interactive "lean forward" control app on their tablet or smartphone.We have great customer relationships with all the major brands in the industry. And we have developed a solid reputation as a reliable partner, so we are confident we will continue to be a key player in this space.
TWST: How strong is the intellectual property portfolio with UEI and may there be some risk in being a holder of intellectual property?
Mr. Arling: I think our patent portfolio or our I.P. portfolio is the best in our industry, and we think it's a major reason for our success. There are risks, and anything with high return or high ROI always has associated risks. We believe our products that are patented, for instance, are an important element of our point of differentiation in the industry. So while it does bring risk, it also brings huge opportunity for us not just today, but over the next five to 10 years.
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