Rebecca Day

SanDisk had record product revenue from solid-state drives in Q4, with SSDs now comprising 19 percent of annual revenue, said CEO Sanjay Mehrotra on the company’s earnings call Wednesday. Opportunities continue to grow in client SSDs for SanDisk, which had 170 percent growth for the year in SSDs across all channels, Mehrotra said. The ongoing shift in consumer preference for “high performance, slim form factor, long battery life and instant-on capability” is driving demand for SSDs in notebook PCs and ultrathin devices, he said. In mobile, SanDisk’s embedded solutions -- including discrete iNAND, iNAND MCP and custom solutions -- drove “significant growth,” particularly in the China market where the company strengthened its position with entry and mid-range OEMs, Mehrotra said. The company expects iNAND products to be an important contributor to growth in embedded revenue this year, he said. SanDisk also set a record for annual retail product revenue in Q4, driven by USB flash drives and “a rich mix” of high-performance mobile cards, he said. Looking ahead, Mehrotra said the Internet of Things will drive “explosive growth in data generation, cloud computing and big data analytics,” each of which will have specific requirements for flash solutions that SanDisk can meet through its embedded solutions and SSDs “that can be deployed in all tiers of the data center.” Commenting on the transition to 1Y process technology, Mehrotra said 1Y technology achieved cost crossover with 19 nanometer technology in Q4, and Chief Financial Officer Judy Bruner said 1Y technology will account for roughly two-thirds of SanDisk’s bit output by year end. SanDisk expects to introduce X3-based embedded products during the year and is making good progress in developing the 1Z node, Mehrotra said. The company is on track for the production transition to 1Z technology toward the end of 2014 and plans to use new cleanroom space for pilot production of 3D NAND in the latter part of 2015, Mehrotra said. The company’s expectation for the production ramp of 3D NAND in 2016 “remains unchanged,” he said. On bit supply growth, Bruner said the current supply demand balance is “healthy,” but the company expects the industry price decline to be “somewhat more” than the price decline in 2013. SanDisk’s strategy for 2014 is to shift its portfolio to higher value-added solutions, “but there is obviously some expectation of price decline in the industry and in our business model as well,” she said. For Q4, SanDisk revenue was $1.7 billion compared with $1.5 billion, with gross profit of $857 million versus $603 in the year-ago quarter, the company said. Q4 and fiscal 2013 cash flow from operations set quarterly and annual records of $617 million and $1.86 billion, the company said. SanDisk shares closed 0.2 percent lower Thursday at $72.02.

BTIG Research took issue with research that said the number of streaming video-on-demand (SVOD) subscribers was growing, while premium TV subscribership is declining. The SVOD survey results were released Tuesday by NPD, citing figures for the past two years. Noting the trend of “cord cutting,” NPD said there was a 6 percentage point overall decline in the number of U.S. households subscribing to premium TV channels over the past two years, while the number of households subscribing to SVOD grew 4 percentage points.

Two-thirds of U.S. broadband households are interested in smart home service bundles including safety, security and management, said Parks Associates. Home management is the most appealing bundle combining safety alerts, remote home monitoring and remote thermostat management, Parks said. “Consumers, while interested in smart home services, are averse to long-term contracts, but there are other, alternate options for building revenues,” said Tom Kerber, Parks research director for home controls and energy. Consumers, for instance, are willing to let their service provider adjust their thermostat during peak hours to avoid monthly monitoring fees, he said. In-app purchasing and advertising also could be a source of incremental revenue for product manufacturers and service providers, Kerber said. According to a Q4 2013 survey of 2,500 households on energy conservation steps they had taken over the past year, 47 percent of respondents said they had switched to LED or CFL light bulbs, the third-most-cited activity behind turning off appliances when not in use (54 percent) and adjusting thermostats (48 percent). The trend showed an upswing in adoption of LED bulbs from 6 percent to 11 percent of households from Q4 2012 to Q4 2013, while CFL bulb adoption dropped from 54 to 50 percent for the period and incandescent usage slipped from 50 to 49 percent, it said. Only 5 percent of households had switched to a time-of-use electricity plan to reduce energy consumption, it said.

Retailers and manufacturers are looking to the Super Bowl to provide a much-needed kick in the pants to beleaguered TV and even audio sales, we found in a scan of promotions Tuesday, less than two weeks before the Denver Broncos and Seattle Seahawks face off.

Former employees of Dolby Labs and Velodyne hope to crack the crowded earphone and portable Bluetooth speaker markets by “bringing the quality of audio back to the forefront,” Devon Bergman, Om Audio vice president-marketing, told Consumer Electronics Daily. The six-month-old company wants to shift the pitch of earphone and Bluetooth speaker marketing toward sound quality and away from the fashion direction that portable audio has taken recently, he said. And it wants to do so at a “reasonable” price, Bergman said. The company has announced a $99 Bluetooth 4.0 speaker due to ship in early February that can play as a standalone unit or in stereo when paired with a twin, Bergman said. The speakers follow the release last fall of a pair of earbuds that sell on Amazon for $149. Bergman touted the Mantra speakers’ medium-density fiberboard cabinets, which are finished in walnut, as comparable to cabinets used for traditional loudspeakers. The 3.5-watt speakers are portable and are said to deliver 13 hours of music on a charge. A built-in microphone allows the speakers to be used for phone calls and other voice-activated features on mobile devices, according to literature. Om is trying to differentiate itself with sound accuracy and voice clarity versus bass, Bergman said. “Too many companies spend time on trying to make the loudest bass possible,” he said. “We're not trying to make this what it’s not,” he said, citing the 2-inch diameter of the speaker’s woofer that he said can’t be expected to perform like a 10-inch woofer. Next up for Om is a studio headphone to be followed by what it calls its “signature EQ.” The patent-pending technology will allow listeners to retune their headphones or Bluetooth speakers via a DSP chip built into the headphone jack of earbuds or speakers. Through the headphone jack, the technology will send information that customizes the sound in the headset. “People will be able to buy headphones from us and make it the way they want to hear it,” he said. Consumers will be able to choose from preset EQ filters optimized for genres such as rock or jazz and they will also be able to tweak the EQ curve to their own liking and then “hard-code” the equalization to the headset. When they plug the headset or the Bluetooth speakers into any source device with a headphone jack, the sound profile will be resident on the device, he said. Om Audio is also working with musical artists on signature filters that will be available to users through the artists’ communities so that fans can listen to music the way a musician wants them to hear it, Bergman said. Users will be able to download filters from an artist’s website and then upload them to their headphones via the headphone jack “and take that experience with them,” he said. It’s “to be determined” whether filters will be given away or sold like ringtones, Bergman said. Om’s earphones sell at Onecall.com and Huppin’s, Bergman said, and the company plans to make additional retail announcements soon.

Walmart looks forward to the opportunity “to shed some light on the facts of these cases in front of a judge,” Walmart spokesman Kory Lundberg said after the National Labor Relations Board (NLRB) issued a consolidated complaint last week over the rights of employees to protest working conditions. Complaints covered two national TV news broadcasts and statements Walmart made to employees at stores in California and Texas, where Walmart was said to unlawfully threaten employees with reprisal if they engaged in strikes and protests on Nov. 22, 2012. Another complaint cited Walmart stores in California, Colorado, Florida, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Texas and Washington that were said to have unlawfully threatened, disciplined, and/or terminated employees for having engaged in legally protected strikes and protests. A third complaint alleged that Walmart stores in California, Florida, Missouri and Texas unlawfully threatened, surveilled, disciplined and/or terminated employees in anticipation of or in response to employees’ other protected concerted activities. The numerous complaints date back to the Black Friday 2012 organized strikes and protests over working conditions. Walmart’s Lundberg said: “The merits of these complaints have not been heard” and there hasn’t been “a single National Labor Relations Board decision against a Walmart in the last five years.” He said that’s because “we take our obligations in these matters very seriously.” NLRB spokesman Gregory King wouldn’t comment on specific cases but said “the majority of cases do get settled.” King was unable to discuss what issues prevented a settlement in this case, citing agency policy. Walmart has until Jan. 28 to respond to the complaint, after which an administrative law judge will set a hearing schedule, NLRB said.

H.h. gregg’s fiscal 2014 and beyond plans call for a continued shift in product mix toward appliances and furniture and away from mainstream TVs, said CEO Dennis May during a presentation at the ICR XChange conference in Orlando. In fiscal 2010, h.h. gregg “was a consumer electronics company that sold appliances,” May said, but now “reshaping the sales mix” is a focus for the retailer, which operates 228 stores in 20 states east of the Mississippi. “H.h. gregg is going through a lot of changes around its sales mix, and we're focusing more and more on home product categories,” he said. Those include appliances and furniture -- where the retailer plans to expand from one to five lines next fiscal year -- and on large-screen TVs “where we can differentiate ourselves,” May said. TVs in the 60-inch and larger category are “more immune to commoditization,” he said. May referred to “shifting sands” within the CE category where “IT is becoming a larger portion and traditional consumer electronics is becoming a smaller portion.” He said CE is still an important business for h.h. gregg and will be more than a third of revenue when the fiscal year ends in March, but the role of the category is “evolving and changing.” Connected devices are part of h.h. gregg’s CE vision because they “empower the customer,” he said. “If it’s a stand-alone device and doesn’t connect to the consumer through multiple touch points, then that product is going to go by the wayside, and video is no different,” he said. In addition to smart TVs, other connected devices including tablets and smartphones are categories where h.h. gregg will continue to invest, he said.

Google’s entry into the home automation market is a “clear indicator” that the connected home “is a long-term trend,” said Control4 CEO Martin Plaehn, during a Q-and-A session after a presentation at the Needham Growth Conference in New York Tuesday. Google announced Monday it agreed to buy Nest Labs and that Nest CEO Tony Fadell, who was on the iPod development team at Apple, would continue to lead Nest after the purchase that’s expected to close in the next few months.

LAS VEGAS -- Staples opened its 33rd retail store with a Connect Home section last week on New York’s Upper West Side as part of what it called a “broad expansion” of its Connect Home and Office Automation program. A mock-up of the display Staples is using in stores was on exhibit at the private Zonoff suite in the Las Vegas Hotel (LVH) adjacent to the Las Vegas Convention Center during CES last week. Zonoff, software platform provider for the Staples Connect Home line, set up a facsimile of the 12-foot linear display in the suite to replicate what’s in Staples stores including products from partner companies including Linksys, whose hub powers the Zonoff system.

Target cut back its Q4 outlook Friday, shaving 30 cents per share from its earnings forecast, while announcing that the number of consumers possibly affected by its credit card security breach has mushroomed to 70 million. That’s compared to the 40 million figure given when the breach was announced Dec. 19.