Navico homes in on a lofty bottom linePosted on Written by Chris Landry
With a suite of new products across its Simrad, Lowrance and B&G brands, Navico aims to increase revenue this year by nearly 200 percent.
“We’ve looked ahead three years, and within that time we would like to become about an $800 million company,” says executive vice president and COO Louis Chemi. “We are about $275 million right now. That goal is backed up by a clear strategy of how we intend to take our strong base in the recreational and light professional industries and move that across to a deeper presence in the professional market, as well as to expand on our freshly minted [social] content division.”
Since 2009, Navico has gained about 6.5 percent in global market share in recreational marine electronics, and revenues are up 60 to 70 percent, Navico president Leif Ottosson says. “Our profits are up several thousand percent,” he says. “We have worked very methodically, and that has resulted in improvements in sales, in margins, in service and warranty — in many different financial areas.”
Navico was formed in 2006 through the merger of Simrad Yacht AS and Lowrance Electronics Inc. The company acquired B&G in 2007. In late January, Navico hosted a media introduction in the Florida Keys at Hawks Cay Resort that gave two dozen journalists, including me, an opportunity to try its products on 11 boats and speak to Navico engineers, marketing experts and managers about the three brands.
“We had a ton of new products and technologies at the event,” Chemi says. “At the high end of the spectrum we had our Simrad NSO evo2 display and processor. These are touch-screen, sunlight-viewable displays with up to a 24-inch screen in size. This is the pinnacle of this market.
“With our B&G brand, we had our H5000 instrument system, which is aimed at the upper-middle part of the market to the high-end and [sailboat] racing community,” he says. “There are a number of components to that system — displays, wind systems, the whole nine yards. And under the Lowrance brand we had a number of products and technologies, including the SpotLightScan, which allows you to move a transducer mounted on a trolling motor and actually look at different segments of the water.”
The Simrad NSO evo2 Glass Bridge system debuted at last year’s Fort Lauderdale International Boat Show. The NSS evo2 made its first public appearance at the Düsseldorf Boat Show this year and was introduced to U.S. consumers at the Miami International Boat Show. “Both the NSO evo2 and NSS evo2 are multitouch,” says Andrew Golden, a spokesman for Simrad. “The major difference is one — the NSO evo2 — is a black box that can run up to two multitouch Glass Bridge monitors independently on one processor, and the other — the NSS evo2 — is an all-in-one MFD.”
The Simrad units have “walk-up usability,” says Simrad global brand manager Dennis Hogan. “In the retail environment, people can walk up and easily figure out how to use the product. And as they get used to it, they learn more advanced features.”
Navico holds plenty of focus groups and gathers feedback to find out what its consumers and installing dealers want, Hogan says. Sometimes there’s no black-and-white solution, though. “We always try to make things super-easy to use,” Hogan says. “But there is always the question of do you design something for the beginner or for the intermediate? If you design it for a beginner, how long is the beginner going to stay a beginner? Not that long.”
Hogan says Navico has focused on the development of screen icons for its new products. “Everyone is used to touch screens and icons,” he says. “When you can have color recognition and symbol recognition, it makes operation so much easier.”
The company also tries to simplify installation by using the latest cabling and keeping its processor size small, which looms large when it comes to smaller boats, such as center consoles, Hogan says. “They have a lot of stuff [in the console] — there is no room,” he says. “So we need to keep the computer smaller. Look at what Apple is doing with the Mac mini. There is no reason for a processor box to be big.”
Developing and marketing these components under the three brands has been no easy matter, Chemi and Ottosson say. “We have a structured team working on product management, R&D and marketing,” says Chemi. “On the marketing side, we are polling our trade customers to find out what they want, what they see, what are the unmet needs. On the other side of the house, we have the product management team and the R&D team coming up with technology road maps and asking, what is wireless doing, or LCDs or processors?”
Navico launched 52 products in 2013 at a pace of one new product every 20 days, Ottosson says. “With one single product there are so many different plans, it is a challenge,” he says. “There needs to be a product road map — marketing plans, manufacturing plans, development plans and plans for the life of the product it replaces. You really need to make this process a machine in itself.”
And the machine must work within a global business operation, Ottosson says. “In Norway, we develop our autopilots,” he says. “In the U.K., we have our B&G brand, and we develop our instruments. In Auckland, New Zealand — the antipole to Norway — we develop our radar and our multifunctional displays. In Tulsa, Okla., we have our sonar content center, and in Mexico we have an engineering center where we carry out our LCD technology and some mapping.”
Another R&D center in Auckland is thriving, Ottosson says. “We have our largest R&D segment here,” he says. An engineer in New Zealand costs the company 40 percent less than the same engineer in the United States, he says.
As competition heats up in marine electronics, the consumer reaps the benefits, Ottosson says. “In marine electronics, we see more functionality, and at the same time the prices have been coming down.”
What does the future hold? One of the focuses will be how to get data from the boat and to the boat, Ottosson says. “We are talking about remote monitoring of the boat, checking to see if there are operations or equipment malfunctions on the boat — battery systems or power systems. We are looking at new product and technology to meet these goals. Expect more Wi-Fi communication with the boat.”
The ultimate goal: “How do we make boating easier and safer and more fun?”
This article originally appeared in the March 2014 issue.