By Richard Menta 5/3/08
It's interesting when a negative is really a positive. That seems to be the case for Archos who recently released the PowerPoint slides from its latest investors meeting. 2007 was not the best year for the company as it saw revenue drop by $22 million Euros from 2006. But, of the three key reasons given for this down turn, the third might be a blessing thanks to (of all things) the iPod touch.
Archos cited "inadequate product mix in 2004" as this third reason. Specifically, "could not fulfill high demand for Wi-Fi PMPs after introduction of iPod touch in October". This suggests that the release of the iPod touch spurred significant awareness of the Wi-Fi portable market as a whole, something that is not surprising. More important, it further suggests that a significant number of consumers compared the iPod touch against the Archos Wi-Fi players and chose Archos.
Archos quickly ran out of Wi-Fi units and was not able to produce new units fast enough to satisfy holiday demand. While that is bad news, because an opportunity to make revenue was lost, it is still good news because the iPod touch has put Archos on the radar for those other than the savviest of digital users.
Archos has always occupied this niche of high-end digital portables, a sane answer to the iPod which targets the masses. It was Archos that invented the Personal Media Player back in 2002 and the performance of the units we tested here was always top-notch. When you compare the iPod touch and the Archos Wi-Fi head-to head the Archos come off as a strong alternative. For example, the Archos supports formats Apple intentially leaves off the iPod. The Archos 605 Wi-fi sports a 800x480 pixel display versus the iPod touch 480-by-320-pixel resolution. The Archos 605 also sports audio and video recording and it's Web browser offers PDF and Flash support. The iPod touch has its advantages over the Archos, including its slimmer form, but overall the Archos is more feature rich.
As for the other problems facing Archos all are correctable, hinting at a better 2008. Considering the dark economic clouds appearing, that is very good news for Archos.
More on the Archos report later.
The Archos 605 Wi-Fi portable DVR is available on Amazon