Article

Triton and Tidel: Beyond basic

They're still the darlings of off-site ATM deployers, but how long will the honeymoon last? Enhanced features may be the key to a long, happy relationship. by Ann All, editor

March 11, 2002

Triton and Tidel blasted a shot heard 'round the ATM world in 1995-96 with their lower-priced, dial-up machines. Now they're under fire from companies producing stripped-down cash dispensers priced as low as $3,000. Their surprise weapon: fuller functionality.

Triton: the Mako

Ken Paull, Triton's vice president of sales and marketing, thinks some of the new ultra low-end products have experienced reliability problems, while others simply seem to be losing momentum.

"Other folks have been out there taking cracks at us for six months. Luckily for us, they've had difficulties and that's bought us some time," he said. "Nobody's gotten much of a foothold yet in that low end of the market."

Long Beach, Miss.-based Triton hopes to capitalize on the success of its 9600 series with the new Mako product. The Mako, although 25 percent smaller than the 9600, won't look much different to ATM users. It features the same screen, card reader and keypad. From a service standpoint, resellers will find many of the components are interchangeable.

"We're leveraging the same look and feel of the 9600 which everyone from the consumer on up to the retailer have become familiar with," Paull said.

The Mako won't be released until later this month, but Paull said Triton already faces a backlog of more than 1,000 units. "I think that speaks for itself."

He acknowledged that the Mako may cannibalize some of the 9600's market, although it's not as flexible as its higher-priced cousin. For instance, the Mako can't be upgraded from a single to a double cassette, which is an option on the 9600. The Mako will be priced about 20 percent less than the 9600, with the lowest-priced model running about $4,500-$5,000 for wholesale orders.

"People are throwing out numbers like $3,000, but we haven't seen much that's under $3,500. So we're going to be close to even the ultra low-end," Paull said.

Triton is counting on retailers' interest in advertising opportunities to drive sales of the Mako. Paull believes advertising capability is what differentiates the product from most of the lower-priced, POS-based terminals on the market.

"If you've got a credit card terminal on top of a cash dispenser, you're never going to be able to run an advertising program on it," he explained. "Eventually as sales flatten out in the U.S., our customers are going to be looking for additional ways to generate revenue off of their machines. One of the easiest ways that doesn't require any changes to the equipment is downloading screen advertising."

The lowest-priced version of the Mako comes with a monochrome screen, 2400 modem and limited memory, but pricier models boast a 256-palette color screen, 14,400 or 33,600 modem and pumped-up memory.

Noting that the enhancements are available for less than $1,000 more, Paull said, "I think in the end more people will sell the upgraded one. They're limiting their network if they don't have those upgrades built in."

While Triton shipped mainly monochrome screens on its earliest products, Paull said most distributors today are asking for color. Triton beefed up the 9600's 16 palette color screen to a 256-palette option on the Mako. The color upgrade also will be available on the next generation of the 9600.

Looking ahead, Paull said Triton is "already working on the next step," a topper that will support full-motion video advertising. The high-tech topper will be available on the 9600 in this quarter, then added to the Mako later.

The Mako seems likely to win raves from ISOs and other distributors, who are big fans of the 9600. The product will be a harder sell for banks, but Paull thinks the Mako has the potential to penetrate the financial institution market.

"Going into a smaller, dial-up cash dispenser that doesn't have deposit capabilities -- that's been a big stretch for the banks," he said. "But a number of them, like Bank One, have learned some valuable lessons about putting overpowered equipment at sites that don't have the transaction volume to support it. We think banks will warm up to (the Mako) over time as they find out the demographics of the sites that are left out there."

Tidel: the Ignition series

Mike Hudson, executive vice president and COO of Tidel Engineering, agrees that many off-site deployers are interested in features like color screens, high-speed modems and additional memory -- and they're willing to pay a little more for them.

"All of these add value that I think is appreciated and recognized in the market, as evidenced by our sales performance the last couple of years," he said. Carrollton, Texas-based Tidel shipped 4,324 ATMs in 1998, a 33 percent increase over the 3,242 units shipped in 1997.

Hudson said Tidel isn't interested in competing with the scaled-down, ultra low-cost machines on the market. "We see no value in following a strategy that lowers our average sale price per unit and doesn't change our unit movement. We're just giving away sales dollars and profit dollars under those circumstances."

Dismissing reports of a soft market as "a misleading and unfair characterization," Hudson noted that many ATM manufacturers reported double-digit sales increases in 1998. Industry pundits are rushing to judgment based on one major manufacturer's drop in sales, he said. "(That manufacturer) is down not because of a lack of market opportunity, but because they're going through a significant strategic restructuring."

Hudson thinks there are still plenty of retail locations with the right kind of demographics to support an ATM or cash dispenser. And he's convinced the best way to fill those remaining sites is to load the machines with enhanced features.

"Everybody likes to have something at the least possible cost, but I haven't seen evidence yet that suggests the market is strictly and only cost driven," he said.

Tidel's Ignition series, released last October, is targeted toward off-site deployers who want an affordable, yet fuller-function, product. "There's a market out there for the kind of feature-rich performance offered by systems like the Ignition. I believe that's where the majority of the market wants to be."

Both the Ignition Series 1000 and 6000 models, which the company bills as "low-cost ATMs with high-end features," offer electronic journal, remote management and 256-color monitors. The 1000 is a single-cassette, while the 6000 holds up to six cassettes. The 6000 is also available with a Level 1 vault.

Hudson is reluctant to discuss specific prices because "wholesale prices are all over the board depending on volumes purchased," but previously published reports have put the Ignition in the $6,000 range.

"We're not competitive with the guys out there selling $3,000 units, but we are at an absolutely competitive position with every other manufacturer of a like product in the market today," Hudson said.

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