Monday, November 10, 2003

Mobility adapting as a power player: "Mobility Electronics Inc. is finally living up to its on-the-move name. Newsweek and other big-name publications have praised its all-in-one Juice charger, which gives users one device that charges their laptop computers, cellphones or PDAs at home, in the car or in planes. Mobility recently signed a major multiyear deal to develop power products for retailing giant RadioShack Corp. Its sales are taking off, and its stock is back out of the tank."

"'We went back to some of our roots and we finally said, "OK, it's time to start exploiting those,"' he said. Mobile devices were proliferating, and the group saw that people needed ways to accommodate multiple gadgets. Mobility kept up its pace of spending about $6 million a year on research and development. It started developing new power products, first among them the Juice charger.

"The company also started to diversify by acquiring other businesses in the computer-peripheral space, using precious cash from its initial public offering and stock battered by the depressed tech market. It bought iGo Corp., a Reno-based company whose main strength was in distributing its products through catalogs and major resellers such as CDW, Insight Enterprises and Micro Warehouse. 'They had a long list of people they'd sell to and we didn't have relationships with,' Mollo said. Mobility also bought Portsmith Inc., a Boise, Idaho, company making modems and cradles for hand-held computers, and Cutting Edge Software Inc. of Dallas, which developed software for hand-helds and cellphones.

"It cut dozens of jobs at the acquired companies, outsourced its call center and Web site operations, and outsourced most of its manufacturing to companies in Taiwan, China and Idaho. Along the way it also settled lawsuits from rivals alleging patent infringements. Mobility's stock price is still off about 4 percent from the $12 it garnered when the company went public in June 2000. But that's much better than other Arizona companies that went public that same market-mad year."

"Juice went on the market this summer, becoming the first combination AC/DC power adapter in the industry. … Analyst Michael Kim of Roth Capital Partners LLC in Newport Beach, Calif., said Juice puts Mobility on the cusp of a strong ramp-up in power adapter sales. 'You're seeing a pretty rapid proliferation of mobile devices, but the power adapter side of the equation hasn't changed much,' he said. 'There's no reason you can't have one intelligent adapter.'

"Both Blankenship and Kim call the RadioShack deal big for Mobility, both because of RadioShack's 7,000 stores and the chance to develop new products due in the retailer's stores next year. The company pursued Radio Shack for a long time, Mollo said. Under the agreement, Mobility will develop a family of in-car power adapters for cellphones, a line of computer power adapters and new adapters for digital cameras, MP3 players and other electronic gadgets.

"The move takes Mobility into the broader electronics market, and plays into RadioShack's new initiative to identify emerging markets and innovative products."

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