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Author Topic: SOYO at .53 - deal with Honeywell

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SOYO * .53...

*Key things to keep in mind when reading below - Honeywell has similar patent deals with several of the LCD TV screen manufactures, but has chosen to sue over specific anti-flickering technology. Why? Don’t know, but things are not readily agreeable on this issue or there would be no lawsuit. Honeywell has obviously timed things well – such as set up LCD TV deal with SOYO and then filed lawsuit. Honeywell has lots of experience and done major research into LCD screens.
*The implications of lawsuit are enormous and one has to reach their own conclusions. This could be headline NEWS soon though. When a company the size of Honeywell picks a fight with the LCD TV industry, and enters the market, it’s big NEWS.
*Note that SOYO has not even had a press release on the Honeywell deal. The following are NEWS articles and a brief excerpt from an e-mail that tell of recent events in this story.
*SOYO is a profitable, fundamentally sound company without the deal.
*Honeywell has a market cap of $37.6 billion.
*SOYO has a market cap of $26 million.

Step 1: The Deal
Honeywell licenses brand name for flat-panel televisions
By Bob Sechler
March 5, 2007

Honeywell International Inc. (HON: NYSE: 47.34) may be best known for its thermostats and aircraft engines, but flat-panel televisions soon will bear the company's name as well.
Honeywell-branded TVs are expected to go on sale this year under a licensing deal between the Morris Township, N.J., conglomerate and Soyo Group Inc. (SOYO: OTCBB:.053) Soyo, a small electronics manufacturer

The deal marks Honeywell's first foray into the consumer-electronics sector, although Honeywell has an active brand-licensing program for portable home air filters and other products.
Soyo will design and distribute the liquid-crystal-display TVs and pay Honeywell royalties. In addition, the deal eventually may result in Honeywell-branded computer monitors and displays, although executives of the two companies declined to elaborate.

They wouldn't release sales forecasts or other financial details, beyond saying that the six-and-a-half-year agreement will provide a minimum of $3.84 million in royalties for Honeywell.
The sum is inconsequential compared with Honeywell's $31.4 billion in 2006 sales. But company executives are intrigued by the market regardless.
"We're always looking for opportunities to expand the brand," said Loria Yeadon, chief executive of Honeywell Intellectual Properties Inc. "We think consumers will appreciate having Honeywell-branded (electronics) because they know that there's quality" in the name.
Yeadon said she isn't concerned that the move could be a stretch for the Honeywell brand. The company is well known as a technology innovator, she said, and many of its patents are already used in various consumer devices.

Brand expert Alan Siegel, chairman of strategic branding consultant Siegel + Gale in New York, concurred, noting that the Honeywell brand is in many homes now and has a solid reputation. His firm doesn't work for Honeywell.
"It's not an unrealistic brand extension" for Honeywell to go into consumer electronics, Siegel said. "Honeywell already is something of a household name because of its thermostats."
He said the key for the company will be to ensure that the new products bearing its brand, and the services surrounding them, are of good quality.
Honeywell executives contend they'll do just that. They said they'll consult with Soyo on design and also will monitor its sales and advertising.

Soyo, an Ontario, Calif., company with about $40 million in annual sales, is a provider of computer components, such as motherboards and networking equipment. But it has been attempting to break into the LCD television market, and it currently sells TVs under its Soyo and Go Video brand names.
Soyo Chief Executive Ming Chok said the Honeywell-branded TVs will be the company's top models.
"Our goal is to build a product that will compete with the majors," he said.
Chok said the Honeywell TVs are expected to be sold in "tier one" retail outlets, although he declined to reveal the precise marketing strategy.

Step 2: Lawsuit
Honeywell sues myriad of LCD TV makers for anti-flicker technology
March 23, 2007 by Darren Murph

If you think LG has a mess on its hands, it's suddenly not alone, as six other manufacturers touching one point or another in the LCD TV supply chain are now facing a patent lawsuit from Honeywell. In what smells awfully like another patent instance of patent trolling, Honeywell is suing Acer, AU Optronics, BenQ, Chunghwa Picture Tubes, Renesas Technology, and Denmos Technology as it claims that a patented "method of stopping liquid-crystal displays from flickering" has been unrightfully used. The firm has reportedly "sustained damages and will continue to sustain damages in the future," which they feel should translate into receiving incredible amounts of cash in order to resolve the situation. Reportedly, five of the six outfits under the lawsuit said that they "had not been informed" about the issue just yet, but we doubt it'll be too much longer before it floats to their respective legal departments. anti-flicker-technol....

Lawsuit Continued
Honeywell sues LCD TV companies over display tech
March 23, 2007
Honeywell has filed a lawsuit in Texas against several LCD TV producers, according to the Taipei Times. The American company claims that key manufacturers -- including ASUS, BenQ, and assembly firms such as AU Optronics -- have violated a patent it holds in the US relating to anti-flicker compensation. The infringment has caused "irreparable harm" to Honeywell's business, the suit reads.

If successful, the court action could severely damage the TV industry by forcing many sets off the market until the feature is changed or removed. AU Optronics in particular would suffer, says the newspaper, as it produces the screens used by larger companies such as LG and Samsung. None of the affected companies have been fully notified of the suit.

Follow-up with SOYO
Excerpt from e-mail to shareholder:

“I can’t disclose expected revenues. Just know that we did not enter into the deal to spend 3.8 million over 6 years nor is Honeywell looking just to make just the $3.8 MM.

We are working closely with Honeywell to deliver an amazing product our consumers will be proud to own. This is all we can say at this point.”

Posts: 74 | From: Midwest | Registered: Dec 2003  |  IP: Logged | Report this post to a Moderator

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