Ottosson: We were in dire shape in
2009. We’ve treated this as a turnaround, as
very entrepreneurial. We expect growth of
about 10% in 2013, which follows more than
a 15% increase in 2012.
The pace of change is what’s driving us.
We’re the only company that is 100% dedicated to marine electronics. Today we have
about 31% of market share globally. We stole
a 4% share in 2012 and took about 2% this
year (2013). We have big plans for market
share in 2014. We hope to have 35-40%
global market share by 2015.
MEJ: What accounts for Navico’s growth?
Ottosson: People have confidence in
the brand, in what we’re delivering. We see a
shift in distribution channels, especially in the
US—more equipment is sold through retail
channels than by technical dealers.
Our customers—the distribution channels, especially retail—are driven by the ability to deliver new products with new features
on a regular basis. Growth is very much tied
to the launch of new products. You need to
continually innovate to keep your balance
sheet and income statement healthy.
In the leisure marine it isn’t so much about
innovating new technology. It’s about taking
technology that exists in high-end commercial equipment and making it affordable for
everyday use. A lot of recreational radar and
sonar products come from very expensive
equipment used for military and commercial
purposes. Innovation is knowing how to sell
it for $500.
MEJ: Navico announced recently that it
has entered into an agreement to purchase the
radar business of Consilium, a Swedish manufacturer of navigation and safety equipment.
times the size of the leisure market. The
leisure market is approximately $1 billion and
the professional side is $2.5 billion. There are
distinct differences between the two but
there’s also significant overlap.
In the commercial arena they’re looking
for longevity in the equipment—the
approach is very conservative. The electronics
need to work every day. If there’s downtime
it’s a serious matter. Equipment must be reliable and sturdy—durable. Service is
Contrast that to the leisure industry, where
design and making it simple are more important. Convergence between the two is underway. Accuracy, reliability and quality standards are there—there is no big difference in
what we build today between professional
and recreational use. The cost of marine electronics has come down so we can invest in the
right tools to build them.
A lot of things have happened on the
leisure side that have received slow adoptance
on the professional side. For instance, the
professional side wants stand-alone radar
and sonar instead of combining them. Simplicity that exists on the leisure side is starting to appeal also to the professional side—
the electronics are becoming more intuitive
We operate more like a consumer electronics company, we move at a quicker pace
than traditional marine electronics companies. We’re in the process of strengthening
certain portfolio components but also the
service part of our business—that’s crucial
and we’re investing in it to make people feel
comfortable choosing our equipment knowing that it is reliable, easy to operate and provides the information they need.
You’ve said the move is aimed at getting Simrad more involved in the commercial market.
Ottosson: Our three brands are working very well, and we’re moving deeper into
the professional market. Simrad has a great
heritage from Norway with the fisheries in the
1940s and 50s. We concentrated on the
leisure marine when we took it over, and now
we’re moving into the professional side
through the strategic addition to the product
portfolio of electronics like Consilium radars.
We’re starting in the workboat market and
we plan to accelerate into offshore vessels and
other high-seas markets over a period of
years. An important step in all of this was to
have a full IMO (International Maritime
Organization) offering on the radar side.
[The METS Daily newsletter quoted Ottosson as saying: “The best thing about Consilium radars is the fact that they were developed in the last two-three years. The offering
they have is probably one of the most modern
offerings on the market. We’ll now have a distinct Simrad brand but we will also sell Con-silium-branded radars to Consilium. We’ve
also entered into an agreement with the sale
and marketing companies of Consilium globally to sell the Simrad portfolio around the
world, and we’re coming out with more products in the professional arena in order to grow
MEJ: How does Navico define the differences between the commercial and recreational markets served by the Simrad,
Lowrance and B&G brands?
Ottosson: The commercial side of the
marine electronics market is two-and-a-half
Ottosson briefs journalists and others about Navico’s latest products at the annual Marine Equipment
Trade Show—METS—in Amsterdam. At the 2013 show, the company launched 25 new products.