August 22, 2005
Inside the box | PDA cases drive growth for office products maker Saunders Manufacturing
By Richard Smart
For many people, PDAs have become the gadget they can't live without, holding all of their phone numbers, appointments, documents and other essential information. But watching a vital ˆ and pricey ˆ organizer take a five-foot drop onto concrete can make even the biggest PDA fan envy the relative sturdiness of a simple address book.
Readfield-based office products manufacturer Saunders Manufacturing offers a solution to that problem in form-fitting aluminum cases that protect mobile devices. Since 2000, when Saunders purchased Wyoming-based case maker Rhinoskin, the company has been shipping protective cases for PDAs, smart phones, mp3 players and Nintendo's Gameboy SP. That business got a boost in August, when Saunders expanded its two-year-old relationship with Round Rock, Texas-based computer retailer Dell Inc. by creating three new aluminum and titanium cases for Dell's line of Axim PDAs.
But besides helping consumers guard their valuable gadgets, the Rhinoskin line also is helping 58-year-old Saunders offset slowing growth from its traditional product lines, such as clipboards and aluminum form holders. Thanks in part to the agreement with Dell, say company officials, Rhinoskin sales are up 30% so far this year, compared to the company's estimated overall growth rate of eight percent to 10% for 2005.
Still, Rhinoskin cases only make up 15% of Saunders' approximately $30 million in revenues ˆ meaning Saunders' traditional markets account for too much revenue to be ignored. The company's challenge, then, is balancing its focus on new markets with continued innovation in its maturing product lines. "Because the traditional portion of our business is such a large percentage of our business, it is absolutely critical that we find new ways to either introduce new products or modify old products," said Michael Stanga, Saunders' vice president of marketing. "At the same time, we have to export our expertise about forming aluminum and light-weight metals to a larger audience."
By Stanga's estimate, the PDA protective case market is the kind of larger audience the company is looking for. He estimates PDA case sales to be worth $200 million annually, compared to Saunders' mainstay clipboard market, which Stanga valued at roughly $45 million. Moreover, most electronics accessories offer higher profit margins than traditional office product lines, says David Thompson, vice president at Lake West Group, a Cleveland, Ohio-based retail consulting firm.
Expanding into consumer electronics has been challenging, though, for a company that specializes in the slower-paced, traditional office products industry. For starters, rapid product development and fierce competition make it difficult to make accurate predictions on future products, says Stanga.
And for companies supplying accessories to the consumer electronics market, there's always the risk of gambling on the wrong products, according to Thompson. With manufacturers launching new products at least once a year, supporting the wrong one can leave a company with a lot of unused inventory on its hands. "You don't want to be the company like Kodak whose whole business was centered around film, and suddenly everybody has converted to digital cameras," said Thompson.
From clipboards to hand-held computers
At one time, paper was the only game in town for businesses, making for an ever-present need for Saunders clipboards, form holders and the like. Harry Saunders and his son Joe founded the company from their Winthrop home in 1947 to make carbon-paper form holders for the oil delivery industry. (There is no relationship between Saunders Manufacturing and Saunders Brothers Co., a wood working company in Westbrook.) For more than 50 years, Saunders has continued to specialize in aluminum paper-holding and writing surfaces for customers like truck drivers and police officers, who do most of their work away from a desk.
But in the 1990s, new technology emerged that gradually replaced the need for paper forms out on the road, said Stanga. By 1999, Saunders realized that it needed to explore new markets in order to maintain growth, and found a small startup company named Rhinoskin that was manufacturing metal cases for PDAs.
Rhinoskin appealed to Saunders, says Stanga, because there was little competition in the protective cases market. The company's use of aluminum and other metals also matched Saunders' reputation as a metal products specialist. Saunders bought Rhinoskin in late August of 2000 for an undisclosed amount, moved the company's headquarters from Jackson, Wyo., to Readfield, and integrated its distribution, product development and customer service departments into Saunders' operations. (While Saunders' aluminum office products are manufactured in Readfield, Rhinoskin cases are produced in China.)
The irony of manufacturing protective cases for the devices that are helping reduce
demand for Saunders' traditional paper-holding products is not lost on Stanga. But for each product that becomes obsolete, Stanga feels Saunders can find a profitable replacement. "As far as some of our core products being replaced by technology, it may create a need for an aluminum case to protect a [police] officer's cell phone," he said.
Although the company has seen sales decline for its traditional aluminum form holders, and flat growth rates for its hardboard clipboards and adhesives, Saunders still has to protect its market share within those categories. As with its Rhinoskin cases, the company relies on rugged aluminum products to set itself apart from lower-cost competitors. That quality is one reason why Warren Roberts, owner of Warren's Office Supply in Springvale and The Paper Clip in Skowhegan, only stocks Saunders' aluminum form holders on his shelves. "We never have any issues from customers with the performance of the product," said Roberts.
At the same time, Saunders is still finding growth within its office products market. Sales of the company's portable desktops ˆ which were introduced in 2004 and are a combination storage unit and writing surface ˆ are up roughly 40% so far this year, said Stanga. That's why, even as Saunders looks to the electronics market for growth, Stanga said the company will remain the "clipboard company" at its heart into the foreseeable future. "I've heard for many, many years that we're moving to a paperless society," said Stanga. "I can attest that I have a smart phone, a laptop and a cell phone and I use more paper than ever before."
Readfield-based office products manufacturer Saunders Manufacturing offers a solution to that problem in form-fitting aluminum cases that protect mobile devices. Since 2000, when Saunders purchased Wyoming-based case maker Rhinoskin, the company has been shipping protective cases for PDAs, smart phones, mp3 players and Nintendo's Gameboy SP. That business got a boost in August, when Saunders expanded its two-year-old relationship with Round Rock, Texas-based computer retailer Dell Inc. by creating three new aluminum and titanium cases for Dell's line of Axim PDAs.
But besides helping consumers guard their valuable gadgets, the Rhinoskin line also is helping 58-year-old Saunders offset slowing growth from its traditional product lines, such as clipboards and aluminum form holders. Thanks in part to the agreement with Dell, say company officials, Rhinoskin sales are up 30% so far this year, compared to the company's estimated overall growth rate of eight percent to 10% for 2005.
Still, Rhinoskin cases only make up 15% of Saunders' approximately $30 million in revenues ˆ meaning Saunders' traditional markets account for too much revenue to be ignored. The company's challenge, then, is balancing its focus on new markets with continued innovation in its maturing product lines. "Because the traditional portion of our business is such a large percentage of our business, it is absolutely critical that we find new ways to either introduce new products or modify old products," said Michael Stanga, Saunders' vice president of marketing. "At the same time, we have to export our expertise about forming aluminum and light-weight metals to a larger audience."
By Stanga's estimate, the PDA protective case market is the kind of larger audience the company is looking for. He estimates PDA case sales to be worth $200 million annually, compared to Saunders' mainstay clipboard market, which Stanga valued at roughly $45 million. Moreover, most electronics accessories offer higher profit margins than traditional office product lines, says David Thompson, vice president at Lake West Group, a Cleveland, Ohio-based retail consulting firm.
Expanding into consumer electronics has been challenging, though, for a company that specializes in the slower-paced, traditional office products industry. For starters, rapid product development and fierce competition make it difficult to make accurate predictions on future products, says Stanga.
And for companies supplying accessories to the consumer electronics market, there's always the risk of gambling on the wrong products, according to Thompson. With manufacturers launching new products at least once a year, supporting the wrong one can leave a company with a lot of unused inventory on its hands. "You don't want to be the company like Kodak whose whole business was centered around film, and suddenly everybody has converted to digital cameras," said Thompson.
From clipboards to hand-held computers
At one time, paper was the only game in town for businesses, making for an ever-present need for Saunders clipboards, form holders and the like. Harry Saunders and his son Joe founded the company from their Winthrop home in 1947 to make carbon-paper form holders for the oil delivery industry. (There is no relationship between Saunders Manufacturing and Saunders Brothers Co., a wood working company in Westbrook.) For more than 50 years, Saunders has continued to specialize in aluminum paper-holding and writing surfaces for customers like truck drivers and police officers, who do most of their work away from a desk.
But in the 1990s, new technology emerged that gradually replaced the need for paper forms out on the road, said Stanga. By 1999, Saunders realized that it needed to explore new markets in order to maintain growth, and found a small startup company named Rhinoskin that was manufacturing metal cases for PDAs.
Rhinoskin appealed to Saunders, says Stanga, because there was little competition in the protective cases market. The company's use of aluminum and other metals also matched Saunders' reputation as a metal products specialist. Saunders bought Rhinoskin in late August of 2000 for an undisclosed amount, moved the company's headquarters from Jackson, Wyo., to Readfield, and integrated its distribution, product development and customer service departments into Saunders' operations. (While Saunders' aluminum office products are manufactured in Readfield, Rhinoskin cases are produced in China.)
The irony of manufacturing protective cases for the devices that are helping reduce
demand for Saunders' traditional paper-holding products is not lost on Stanga. But for each product that becomes obsolete, Stanga feels Saunders can find a profitable replacement. "As far as some of our core products being replaced by technology, it may create a need for an aluminum case to protect a [police] officer's cell phone," he said.
Although the company has seen sales decline for its traditional aluminum form holders, and flat growth rates for its hardboard clipboards and adhesives, Saunders still has to protect its market share within those categories. As with its Rhinoskin cases, the company relies on rugged aluminum products to set itself apart from lower-cost competitors. That quality is one reason why Warren Roberts, owner of Warren's Office Supply in Springvale and The Paper Clip in Skowhegan, only stocks Saunders' aluminum form holders on his shelves. "We never have any issues from customers with the performance of the product," said Roberts.
At the same time, Saunders is still finding growth within its office products market. Sales of the company's portable desktops ˆ which were introduced in 2004 and are a combination storage unit and writing surface ˆ are up roughly 40% so far this year, said Stanga. That's why, even as Saunders looks to the electronics market for growth, Stanga said the company will remain the "clipboard company" at its heart into the foreseeable future. "I've heard for many, many years that we're moving to a paperless society," said Stanga. "I can attest that I have a smart phone, a laptop and a cell phone and I use more paper than ever before."
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