Accustomed to the U.S. market, where banks have had no problems with buying standard ATMs, NCR Corp. (NYSE: NCR) has had to change to compete in the Brazilian market, where banks insist on customized machines.
In Brazil, during the market reserve, banks had to built their own IT operations to provide that technology. In the 1970s, Brazil instituted an industrial policy in its computer and telecommunications sectors that prohibited imports certain classes of products and consumer goods in order to foster domestic industries and scientific research.
As a consequence, even now, financial institutions buy ATMs only if they are customized for them. “The machine I make for one bank, the other would not buy,” said Elias Rogério da Silva, who recently took command of NCR’s Latin America’s operations. “This is a an inheritance from the time of market reserve. I don’t agree with that, but this is the game. It will take awhile to change that, and we are trying to standardize.”
That same principle may guide NCR’s next steps. Based in Duluth, Ga., the company derives about 80% of its revenue from its point-of-service solutions — such as ATM machines and software, PoS and retail systems, and airline check-in systems — which mainly comprise hardware offerings. NCR is looking to expand its portfolio to focus on software architecture, including cloud computing.
Silva told RCR Wireless News that NCR’s revenue has the potential to double in size. To achieve this, NCR will focus on two others pillars, Internet and mobile platforms, that today represent about 20% of the company’s revenue. Such a growth strategy is necessary to increase revenue substantially, Silva said, considering that 13% of NCR’s revenue currently comes from the maintenance of the installed base in current customers, and new contracts account for 3%.
“Internet and mobile solutions will address the big growth. NCR invests between 3% to 5% of its revenue in research and development, which is about U.S. $200 million to $250 million per year,” Silva said.
Financial results
Globally, NCR’s revenues rose 16% in the third quarter compared with the same period last year. The company expects to close its current fiscal year with an 8% to 10% increase in revenue from last year’s total of $4.8 billion.
During a news conference Dec. 1, Silva said NCR is gaining market share in Latin America: “In a market that grows at one-digit we are growing two. Brazil, in particular, is performancing in 2011 much better than 2010, and Latin America region doubled compared to four, five years ago.”
>>> Follow RCR Wireless News – Americas on Twitter, Facebook and subscribe to our free periodic newsletters.
