Archos Actually Doing Well, Financial-Wise

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Remember Archos? With all this talk of Droids v. iStuff, Archos’ stable and handsome PMP/Tablet line has been cast by the wayside, relegated to a distant third place where it commiserates daily with Creative and the Zune. However in many markets Archos is still a leader and now they have the financials to prove it.

According to a recent release, Archos hit 83 million Euro in revenue compared to 59 in 2009. Most of the revenue came from Europe with 116.2% growth and, surprisingly, an over two-fold increase in revenue in America.

Archos saw the most growth in the tablet space, selling many ARCHOS 2.8, ARCHOS 3.2, ARCHOS 70 IT and ARCHOS 101 IT tablets. The 101 IT, for example, is a very capable 10-inch capacitive touchscreen tablet running Android 2.2 as well as a business-oriented Linux distro called Ångström. Great for nerds, no so great for people who just want to watch Glee.

Said CEO Henri Crohas:

“By year end, the success of the Generation 8, especially ARCHOS 70 and ARCHOS 101 tablets, had exceeded all our expectations. The demand was such that we faced shortages in most stores. The demand is maintained at a high level in the current quarter, confirming the strong development potential of the tablet market and validating the strategic choices made very early in this area, more than two years ago.”

So enjoy a finely wrought French meal, Mr. Crohas, and wash it down with a bottle of Bouchard Pere & Fils Pouilly-Fuisse 2008. It’s been a bad few years for the once mighty Archos and things are definitely looking up.

ARCHOS Announces Record Q4 2010 Revenue, Driven by High Demand for Internet Tablets

• Increase in annual turnover 2010: + 44%
• Revenues in the fourth quarter + 120%
• Fifth consecutive quarter of growth

ARCHOS has achieved annual sales of € 83.3 million compared to € 57.9 million in 2009. Fourth Quarter 2010 sales reached € 35.6 million versus € 16.1 million for the same period in 2009, up 120% and registering a fifth consecutive quarter of growth.

M€ unaudited
Q4 2010
Q4 2009
Var° M€
Var° %
EUROPE
24,6
11,4
13,2
116,2%
ASIA
2,2
0,6
1,5
235,8%
USA
8,8
4,1
4,7
113,6%
TOTAL REVENUE
35,6
16,1
19,4
120,3%

In the fourth quarter of 2010 ARCHOS demonstrated its ability to capture growth in rapidly expanding markets through a broad range of products combining technical performance and competitive price positioning.

The growth achieved during the Fourth Quarter was driven in particular by the start of rollout of Generation 8 Internet Tablets in Europe (ARCHOS 2.8, ARCHOS 3.2, ARCHOS 70 IT and ARCHOS 101 IT) where initial deliveries began in October, confirming the wide acceptance of this new expanded range.

Activity was further supported by the significant development of the Home Tablet sales in the U.S.. Year-end sales of MP3/MP4 players increased in Europe and in the U.S., Asia-Pacific development efforts undertaken earlier in the year also began to bear fruit.

Commenting on the figures, ARCHOS founder and CEO Henri Crohas said: “By year end, the success of the Generation 8, especially ARCHOS 70 and ARCHOS 101 tablets, had exceeded all our expectations. The demand was such that we faced shortages in most stores. The demand is maintained at a high level in the current quarter, confirming the strong development potential of the tablet market and validating the strategic choices made very early in this area, more than two years ago.”

Return to growth in 2010

At the close of its fiscal year 2010, ARCHOS recorded an overall revenue growth of 44% marking the sharp turnaround in the group activity and validation of its strategy.

M€ unaudited
FY 2010
FY 2009
Var° M€
Var° %
EUROPE
60,7
43,5
17,2
39,5%
ASIA
4,4
2,7
1,8
66,3%
USA
18,2
11,7
6,4
54,9%
TOTAL REVENUE
83,3
57,9
25,4
43,9%

Through its policy of broadening of the product range, with a portfolio of over 50 references, Archos has regained significant market share in Europe.

Thus, according to a market share study by GFK, ARCHOS rose to second place in France in the MP3/MP4 player under 7 inch segment, going from 5.8% market share by value in 2009 to 7.8% in 2010, In Germany, the group jumped by 4 places, from 11th to 7th place and in the UK, ARCHOS moved from 7th to 4th place[1].

Moreover, in a context of strong market deployment of large format Internet tablets (7-inch and above) ARCHOS’ innovative products have given the group a unique opportunity for development. In this new segment, ARCHOS has proposed, ahead of its competitors, high quality products at an attractive price, enabling the brand in the fourth quarter to become market leader in the 400 euro and under tablet segment in France, and to hold in this area a market share of 22% all price segments combined[2].

The forecasts of growth in the market for tablets are promising, with an estimate of over 50 million tablets to be sold worldwide in 2011[3], three times more than in 2010. ARCHOS expects to take an important position in this growing market.

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