STRATEGIC PARTNERS
Credit Card Center, one of Tidel's biggest distributors, has ordered 500 Chameleons. The deal may silence the skeptics who wondered when, if ever, Tidel would ship any of its Web-enabled ATMs.by Ann All, editor
March 6, 2000
Lots of people are curious about the Chameleon, a multimedia kiosk that manufacturer Tidel Engineering calls "the most dramatic breakthrough in the history of ATMs." With claims like that -- but no deployments to date -- some industry pundits have questioned Tidel's decision to add the Web-enabled terminal to its product line. Conventional wisdom: Sounds nifty, but will it sell? "We are pleased with the progress of the Chameleon product line to date. We have been able to absorb significant development expense to create this product, while continuing to grow earnings from our core business each quarter," said James T. Rash, Tidel's chairman and CEO. "We believe our overall strategy will ultimately provide long-term value for our shareholders." Despite statements like that, doubts about the product have continued to grow. Tidel hopes to silence some of it skeptics with news of an order from one of its largest distributors, Philadelphia-based Credit Card Center. The deal, for 500 terminals, is valued at $7 million. Andy Kallok, president of Credit Card Center, said the first 100 or so Chameleons will replace more traditional ATMs at some of the company's higher-volume sites. "We're looking for 800-plus transactions a month," he said. At first, those machines will feature only traditional ATM functions -- but that should change by spring. "It's a raw shell. We have to customize applications for it," Kallok explained. "We're bringing our technicians up to snuff on the first few units now." The Chameleon's technology is not plug and play. Some questions remain about networking and other details. Once these issues are addressed, Kallok said, the company plans an aggressive rollout. "We'll install 35 a month in April, May and June, then pick up to about 60 a month after that," he predicted. With its increased functionality, the Chameleon will be a key part of an advertising program sold through PNG Marketing, a CCC subsidiary. Up until now, the program has been based largely on still screen graphics. "We're going to see the dollars we can bring in with full-motion video," Kallok said. He expects Chameleons to generate up to $1,000 a month in advertising revenue, he added. Mark K. Levenick, chief operating officer of Tidel, predicts that orders for the Chameleon will increase as more applications are developed. "While the raw power of this platform has only begun to be exploited, we expect the Chameleon to take a leadership position in the emerging kiosk market as new software applications for retail-based e-commerce are completed.'' In addition to marketing the Chameleon through its distributors, Levenick said, Tidel plans to do some direct selling. The company has targeted the hospitality, gaming, mass retail, financial service and apartment rental industries. "We have significantly expanded our operation to accomplish the additional development necessary to serve these markets, including the addition of engineering personnel," Levenick said. "We believe that the current customer development activities will result in additional orders for Chameleon throughout the year." While Tidel has not released pricing for the Chameleon, messages posted by investors on a Yahoo.com financial forum speculate that the product is priced about three and a half times higher than Tidel's flagship Ignition Series ATM.
