JimPinto.com - Connections for Growth & Success™
No. 17 : September 20, 2000


  • Troubled Companies : Invensys, ICS, Rockwell
  • Technology Adoption Patterns
  • Computer Jewelry
  • Cellphone Location Applications
  • Internet Growth Numbers

Invensys crunch-time (continued)

The shares of Invensys plummeted by about 50% when their recent press release warned about poor results. The company, renamed after the merger of Siebe and BTR, is now under heavy fire. Invensys has made several acquisitions that have failed to excite investors. Its recent (July '00) acquisition of Baan, the Dutch enterprise-software company, is clearly fraught with risk.

Invensys Read the Invensys press release that started the stock-slide

Pinto's Perspective
The Invensys strategy has been to consolidate similar companies, divest the dogs and build a pool of cash to make new, attractive acquisitions. Although Baan is NOT the cause of the immediate problems, it is the biggest bet and will not produce results fast enough to make a difference - indeed, it will likely have a negative impact that will mask gains in other areas.

Invensys CEO, Allen Yurko, is intelligent, ambitious, aggressive and an excellent manager. Unfortunately, he appears to have been poorly advised, particularly in the acquisition of BTR, which was a poorly managed hodge-podge and simply compounded Yurko's problems. It is unlikely that he will survive the current situation - I give him a few weeks, at best. Pity, because there is no leadership alternative within the company. Yurko's exit will simply put Invensys in the hands of an interim CEO who will seek an acquirer. The current stock-price makes Invensys a clear target for either Siemens or Emerson.

ICS (UK) - Tritax Takeover

Industrial Control Services (ICS UK) will, for all practical purposes, cease to exist once Tritrax, the acquisition vehicle backed by venture capitalist Alchemy, acquires 100% of the group, according to David Keast, publicity consultant for ICS Triplex and Transmitton. In its place Tritrax will become the effective holding company, under Alchemy appointed managing director David Rimmer, but will have a purely financial function, in effect acting as a bank to the three operating companies. UK-based ICS Triplex and Transmitton and US-based Max Controls will operate as autonomous wholly owned subsidiaries under their existing management.
Pinto's Perspective
The three companies are too small and precarious to survive autonomously for long. Look for each or all to be acquired or merged sooner or later. In the meantime, recalcitrant stockholders are awaiting resolution of their penny-a-share stock. I predict that Alchemy will inevitably find a way for them to exit without paying a premium.

Click Take a look at ICS - The Downhill Debacle here on the web

Rockwell Slides

Shares of Rockwell (ROK) fell 20%, after earnings expectations for the fiscal year ending Sept. 30 were lowered, citing a softening in U.S. markets for automation products. Shares of Rockwell International ended regular trading on Monday 18 September 00 at $30.50, down $7.69 on the New York Stock Exchange. Shares ended at $ 28.75 on Tuesday (19 September '00).

Don Davis, CEO reported: "In particular, automotive related capital spending projects, which represent approximately 25 percent of Automation's Control Systems sales, are continuing to be deferred. Parts shortages in electronic components and displays are also affecting our ability to make timely deliveries and are increasing our material costs."

Click Read the Yahoo financial news item

Pinto's Perspective
Rockwell has been slipping and sliding for a while and I predict that it will be acquired within the next year. Take a look at my article written in the last century (July '99).

Click Pinto's Pointers : Who will buy Rockwell & Allen-Bradley?

Technology Adoption Patterns

As the introduction of new technology accelerates, it is interesting to review the patterns of adoption.

The aggressive users are the "Hunters" true technophiles who actively seek out a new product as soon as it is announced, often before it can even be acquired through the retail channels. Next are the "Early Adopters" who typically buy a new product early in its growth stage, when it first appears on retailers' shelves. Then there is the main market, the Consumer group, the less aggressive users of technology, the "Wave Riders" who typically adopt a new product once initial prices have dropped and the product's concept has been proven. Finally, there are the "Laggards" who buy when prices have dropped significantly, or when they are forced by necessity.

Click Good Marketing piece : From Hunters to Luddites

Computer Jewelry

Do you remember a few years ago when the Intel Pentium-chip had a slight math-flaw and was finally recalled? Well, can you guess what happened to all those recalled Pentium chips? What DO you do with a flawed Pentium?? I asked my friends at Intel in Albuquerque, New Mexico and got this surprise : they were sold as junk, and turned up in tie-pins, rings, bracelets, belt-buckles and necklaces......

The latest trend is not just decorative, but "Active Jewelry". Cameron Miner, the head of IBM's designLab for Wearable and Pervasive Computing, suggests:

    "As pervasive computing becomes a reality, and we are able to access information and services anywhere, anytime, our "access devices" must be with us everywhere, all-the-time. How can we expect people to do this? Let people wear them, make them fashionable, make them personal."

Recently, Bill Gates of Microsoft, Andy Grove of Intel and I were having lunch, right here in San Diego. Suddenly we were interrupted by a beep, and Bill Gates started talking to his wristwatch and listening to his necktie - evidently a call from Joel Klein at the Attorney General's office. Shortly after, there was another tinkling sound and Andy Grove started speaking into the air; apparently the microphone-chip was in his tooth, and the speaker built into his ear lobe. A few minutes later, when a rumbling sound came from my direction, I quickly explained that I had an urgent fax coming, and needed to go get some paper.....

But seriously, several types of "active jewelry" are already coming on the market! Samsung's will soon be releasing wristwatch cell phone. Casio is now selling MP3 and GPS and digital camera wristwatches. And Sony has been selling an "active MP3 pendent" called the Music Clip. Aesthetically pleasing, wearable gadgets will soon make technology tools less irritating than they are today.

Click Explore IBM designLab ideas

Cellphone Location

Speaking of communicating computing appliances, several companies are introducing GPS (Global Positioning System) chips that will locate a mobile phone or PDA user to "within five yards".

Click see the Aug. 30 San Jose Mercury News

This type of technology will soon bring new applications to your cell phone, based on your location. You might expect your cell phone to beep with the following message on its screen: "It's noon! Have lunch at TGI Friday's right here in front of you - and you'll get a two-for-one discount!"

The potential for a vast range of new position-related services seems enormous. Auto manufacturers will soon be putting GPS-cellphones into new cars which will create quite a platform for location-based advertising and information services. Several position-based services are already showing how useful these services will become.

Click MobilePosition.com website

Internet Numbers

The number of Internet connections worldwide is now about 300 million, with about half of them residing in North America. Japan is in second place, with about 30 million. European countries, with a combined 82 million people online, are catching up - led by the UK, followed by Germany and Italy, which together make up about half of online Europeans.

Click Take a look at ZDNet News & Nielsen/NetRatings

The Web is currently made up of 6.4 million servers at 4.5 million sites, and there are more than two billion Web pages. By 2005, forecasts more than one billion Internet users, at which time 700 million of those users will be located OUTSIDE North America! We are clearly headed for a "multicultural, multilingual, and multipolar" Internet.

Click Take a look at the US Internet Council (USIC) study

More than 90% of those in the 18-34-age bracket will be online by 2004, and the number of people over 55 will triple, as cyber baby boomers account for 20% of those surfing the Internet. Indeed, the over-55 age-group currently represents the fastest-growing online segment.

Click Take a look at this IDC article on changes in online population


Regarding my discussion of the "deep web", Fong Kin Fui from the Centre for Intelligent Control, National University of Singapore e-wrote:
    "The subject of "deep web" is not new. In a talk given by Vinton Cerf, a founder of the Internet, at our university on 7 Dec 1999, he mentioned the existence of "dark matter". This analogy comes from astronomy. There is a theory that says the Universe is bound together by dark matter, as opposed to white matter which can be seen by telescopes. The proportion of dark matter greatly exceeds that of white matter. Cerf thinks that information on the Internet is organized in the same way - the bulk of the information in the Internet is buried in search engines and company databases. This type of information is thus not easily accessible and thus not "seen" by the normal users of the Internet. Go to Cerf on the Net and look down the list for Cerf.

Click Cerf on the Net

On the same theme, Mrs. B. Hollander of Omega : www.omega.com e-wrote :

    "We find our problem is quite simple: how do you get listed with the top 5 names on the search engines? I guess some of our offering materials could be considered "deep web" because we offer so much technical help and yet someone searching has to know to come to us directly to get it. The search engines are not picking up our contact connections".

Regarding dot-it-yourself HTML web pages, Eoin O'Riain from Ireland's award-winning Instrumentation Signpost : www.read-out.net e-wrote :

    "I also do my HTML in the "raw" and enjoy it. Sometimes I make mistakes and I'm always learning. I got in too early to learn programmes devised for those lesser souls who can't enjoy the true simplicity of this incredibly easy system. But I still have problems in trying to program my VCR...."

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