CES 2014: Kyocera explains market position; device advantages By RCR Wireless News

Dan Meyer, with RCR wireless news at the CES show here in Las, Vegas I'm here with John Shearer, who was with Kyocera Johnny, join us today, appreciate it good to see you Dan thanks problem. Well, let's take a look at some accuser devices. Obviously, I knew you guys are having super new coming out for the show, but well the Kaiser devices are some unique devices out there in the market and a lot of companies are going after the arms race of faster processors, bigger screens, you guys have kind of found a niche where you guys are going after maybe a little more real world capabilities, and so maybe take a look at some of the things that you guys offer in the market today. Sure you actually you hit it on the head down. What we have here. This is our line of hydro series phones as well as our torque phone, and really you described it perfectly.

There are a number of really great devices that are on the higher end of the spectrum. Great tech are great specs great features, but what we're really looking at doing is striking a very careful balance between performance and specs durability and price affordability. So what you see here? All of these phones are very affordable devices, prepaid in 150 or less categories a lot of them of those about no subsidies with subsidies. A lot of them are even free, and so what you get is a very affordable device with a perfect feature set, that's strong feature set, but what really differentiates the products is they're all waterproof and extra durable. You like to use phones in the real world.

Those are some important things to have. Obviously it's great to have the biggest greens, the fastest processors, but since you drop it you're in trouble, ya know you're exactly right about that, and we've seen statistics it's somewhere in the neighborhood of about a hundred million phones in the US have been destroyed by liquids. It's hugely common and how many phones have you seen with cracked and spider displays with things like waterproofing with the hardened glass? The nice protective displays it really. It gives a peace of mind to the user and really gives you know, you're not paying a lot for it, but it's almost like adding a little insurance plan to your screen protector and your phone case. Embedding the device evidence exactly right.

Well, let's go through some other devices, you're into show walking on what they have and maybe some some cool features of they have again, but the niche features that they have on the devices yeah, so you're starting your kind of going chronologically here. This is really one of the phones that started at all. This is our Kyocera torque, and you can see super ruggedized device. You know this is a phone that is built to military specifications was built for the sprint Direct Connect network, initially so rely on the enterprise, but also right. That's right! That's right using the couch at push-to-talk technology, and so it's a phone, that's made to be.

You know extremely durable for use in the enterprise channel as well, but it's also proven to be very popular in the consumer channel people who do want that peace of mind. Really their phone can keep up with them. They don't have to worry about protecting their phone. A nice feature set it's an LTE 4G device. You have really all the features you would want in this one feature in particular: that's new and is proprietary.

The Kyocera is I, don't know if you can even see on the camera here, but at the top here just about any phone on the market is going to have a little hole here where the speaker goes, we've taken the speaker out of the phone and again this is all about usability. How often you find yourself in a really loud environment, where it's really difficult to hear your phone? What we've done is we've taken out that traditional speaker and replaced it with a little ceramic motor Kyocera going back.55 years is short for Kyoto ceramics, and so we have this great industrial, ceramics, technology and expertise. We created this little ceramic motor that, instead of using a traditional diaphragm for the speaker, it takes the diaphragm out and replaces it with vibrations. So now you have two ways for the sound to get to your ear. Your inner ear you'll still, if you're, if you're, holding the phone away from your ear, you'll, still hear the sound like you would with a normal phone, but now because of these vibrations, if you're in a very loud environment, simply by touching the phone to your head around your ear, those vibrations can go directly to your eardrum it.

You know the reaction to people when they see it for the first time is really it's awesome. Jaws drop, but you know in the real world environment which is again what we're really going after, if it's really loud, and you can cover one ear, and you can even take the phone and use it to cover the other you're keeping the ambient sound out, while those vibrations travel directly to your eardrum, and you're. Getting that sound like there's nothing else going on around you. So very nice feature it's in all of these devices now, and it is its proprietary to Kyocera we're the only ones who are doing it right now and if device available through a lot of pre carriers right now, this particular device. The torque is available only through sprint because of the Direct Connect feature, so this was really the device that started when our move went toward the.

If you want to call it real world rugged, station, every day, rugged, station. This was the phone that really helped kick that off. We have a series called the aura series of phones that it's not here today. It's the push to talk series phones like this. Their feature, phones, super rugged.

You can hit them with a hammer, and they're not going to go anywhere, but torque was really the one that brought that rugged station forward and that's what took us from here to get a series of phones that maybe aren't as ruggedized or don't have the real beefy look to them even this phone. If you compare it to buying one of the aftermarket cases that would provide this kind of protection isn't bad, and it's gotten a perfect reaction from consumers. But we wanted to build some phones that had that waterproof protection that added peace of mind, but that their mass-market phones, their phones, that, when you put them on the shelf with other phones, you wouldn't even know that they have that waterproof capability and that's what led to the hydro series. So our original hydro launched back in 2012 with boost mobile, and it sold like crazy with boost people loved it sub a hundred dollar and prepaid no subsidy and based on that success. We came out with these three.

This is the second generation of the hydro series and going right down the list you have. This is called the hydro edge. This is a phone that's selling through sprint and boost mobile, so prepaid or postpaid again, nice feature set. This phone is selling at postpaid with boost mobile sub a hundred dollars with sprint or sorry prepaid with sprint, postpaid you're going to get this phone basically for free with a contract moving down here, I'll move to the end. This is the hydro extreme.

This phone we've taken that waterproof capability and addition, in addition to that, it's tough to see from a distance, but it almost has little bumpers on the corners here. We've built this phone to military spec, 8?ng, mil spec for shock and drops ok, so it's heavily tested for drops- and these are little bumpers- to provide that added protection. But this is a phone again, the ruggedized glass, the hardened glass display. You can drop this. You know really give it a beating, but without sacrificing the style and this exactly it's that everyday rugged.

Look that you're looking for, and then we rounded out the set with the hydro elite. This is a phone, that's selling it Verizon right now. This phone is free with a contract with Verizon another 4G LTE phone very nice feature set of the three. This is probably the highest spec phone you're, getting a nice dual-core processor. I think it's one point.

Two gigahertz and 4.3 inch display very nice representative. You could probably call it a good, solid, mid-tier feature set with that waterproof capability that smart sonic receiver technology we talked about, and it's a really nice device, Malacca sheriff, I guess the waterproof ability of you, obviously absolutely vices out there. I know some companies that their phones are water-resistant. You can kind of little of water on them here and there, but these devices are really something you can actually drop in the water and forget them for 20 minutes. So well, it's a perfect point that you make.

There are a lot of solutions on the market, some other waterproof phones coming on the market. I guess what we would say to that is not all waterproofing is created equal. You know there are some spray coatings that it's a nice last-ditch effort to save your phone. If something was to happen, no problem with that by the time you pay to put that on you've almost paid for one of these phones to begin with same with buying one of those big cases you can put on your phone, but with these devices I'm taking the hydro elite here just for demonstration purposes. We have this little tub here, but you can see absolutely no problem here.

Absolutely not no. We use multiple ways to keep it waterproof everything from rubber gaskets around the battery cover we have you'll see on here. There are no covers for the headset or the charging ports they're, actually waterproof ports, even over the speaker- phones themselves. If you look at the holes in the back for the speakerphone function, behind those ports is actual material. That's like greater so allows air permeability for the sound to come in and out, but the water can't go in even down to the circuit board level.

Rubberized screws to hold everything together, so water can't go through those screw holes. It's built really from the ground up to keep the water out and to keep the circuitry inside dry, and so whether you drop it on it, and we can't do it here because the setting that we're in- but you know how many times have you been at a restaurant, with your phone out and knocked over a drink, and you know you drop the phone in the sink- god forbid the toilet. How many people have done that this is the phone that you can. You can do it with? You can drop it, not the curse about it. That's right! You just dry! It off hit the power, and you're right back in business again, yeah.

Well, obviously, now for kids are you guys have deftly found a nice niche here, and obviously it's done pretty well, for you guys I knew you guys have definitely gained market share of the past couple of quarters. It seemed like you has a really kind of find your legs in the US market. Maybe talk a bit about, I guess the data building can have. You guys have been able to really kind of gain some traction here, but a lot of the companies have had have struggled really yeah. It's a big too.

We feel very fortunate this direction that we're going with this durability. Affordability. It's really seemed to strike a chord with consumers. You can look at market statistics about 90 million people were predicted to get their first smartphones in about a three-year period. So when you look at this kind of numbers for those types of people, they may not want to jump to a real high-end phone where you're going to pay two hundred dollars subsidized, or six hundred dollars pay as you go yeah their phones out there like that they're beautiful devices, but they may, they're not right for everybody.

So with the device like this, we've been able to go in and serve that that segment of consumer. That's looking for that affordability and, quite frankly, the carriers are looking to fill that area with their portfolio as well. What it's allowed us to do is if you go back a few years back in about two thousand seven Kyocera wasn't selling to any national carriers. Since then, we've added any in 2008 and then just in the last year with the hydro elite. We went back into Verizon for the first time since about two thousand seven and then just recently, we added with the hydro extreme we added T-Mobile, so we've gone from zero to three of the top four carriers in the US and work with a number of others on the MVNO prepaid regional side.

So it's really allowed us to I, guess, carve out a niche for ourselves and to your point from a market share standpoint. In about the last three years, we've added more than about a percent and a half in US market share which doesn't sound like a lot till. You start thinking about how many units that represents in the market how many cell phones sell each year and just in the past year, we have numbers from it majestic suggesting that we've gone from about number 9. All the way up to number four, where we're currently sitting in the US market number four and market share, it's gone really well, we feel really, really fortunate and really confident in the direction that we've gone with these devices. Definitely she ate the times, may think so much of the demonstrations.

Absolutely, thanks. Dan.

Source : RCR Wireless News