Technology and solutions provider for the retail and financial services industries, NCR Corporation (NCR) has recently been selected to provide help desk, customer support and other managed services to the Spanish-speaking customers of Philips S.A. throughout Latin America.
As per this new contract, the facility in Buenos Aires will be used by NCR for providing technical support and customer care services with respect to all Philips S.A. consumer products. NCR will also assist with inbound marketing support for promotions and deliver other specialized call center functions.
NCR’s selection by Philips SA was based on its successful track record for delivering managed services, as well as the company’s ability to gauge consumer behaviour, which will help Philips S.A. develop strong relationships with consumers and differentiate itself from competitors.
The company is making headlines with frequent deal wins. For example, in the month of January 2011, NCR Corp. clinched a deal with Chase, the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (JPM), whereby the latter would deploy more ATMs incorporating NCR Corp.’s latest Scalable Deposit Module technology.
This apart, NCR should benefit from improving trends in U.S. Retail POS markets and the expected increase in DVD kiosk sales. Research shows that roughly 60% of people taking DVDs on rent prefer to do so through self-service kiosks. The DVD kiosk market has lots of room to grow, with Adams Research predicting $2.0 billion in revenue through 60,000 kiosks by 2014.
On the other hand, company’s aggressive target of 10,000 DVD kiosks by year-end 2011 and the achievement of break even in its Entertainment business by fiscal 2011 are optimistic goals, given its limited experience in a market with varied dynamics.
Although NCR has been diversifying its business in other segments, the company’s forte is Automated Teller Machines (ATM). According to a study published by Retail Banking Research, NCR has been the world’s largest supplier of multi-vendor ATM middleware and applications for 23 consecutive years.
We remain encouraged by NCR Corp.’s association with leading banks, such as Barclays Bank plc (BCS) and UniCredit Bank, which have upgraded their ATMs using the NCR solution. We are also encouraged by the company’s market leadership, successful acquisitions, new product introductions and continued customer wins. However, we believe that near-term visibility is limited due to uncertainty regarding its DVD-kiosk business.
Currently, NCR Corp. has a Zacks #3 Rank, which translates in to a short-term Hold recommendation.
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