Marketers, or at least the successful ones, are always on a relentless hunt for new product development, partnership or diversification strategies. Although these moves often can take companies out of their current comfort zones, they may well move the company into markets with favorable demographic trends and stronger long-term outlooks.
Amphenol is a global manufacturer of electronic and fiber optic connectors, cable and interconnect systems for markets from the aerospace to automotive, industrial to IT and data communications equipment, and from the military to mobile devices and wireless infrastructure.
Earlier this month, the Wallingford, Conn.-based company entered into a manufacturing and sales agreement with Universal Power Group,
a provider of third-party logistics and supply chain management services as well as a global distributor of batteries, security products and related portable power products.
The last part -- portable power products -- provided the juice that sparked this partnership. The deal is based around Amphenol's capacity to design, develop and manufacture safe and easy connectors for UPG's line of sealed lead-acid (SLA) batteries -- batteries that are used in a mobile medical device market that is expected to see unprecedented growth in the next few decades as the "baby boom" generation rolls into retirement age and beyond.
Outfitting UPG's SLA batteries with these connectors is expected to reduce the risk of injuries resulting from improper battery installation, as the connectors eliminate the need for specific tools typically required to remove and install the batteries. In addition, they will reduce the time required to change out the batteries, which is another major factor as the market moves toward home health care as an increasing part of affordable treatment regimens.
At A Glance
Primary Industry: Computers & Other Electronic Products
Number of Employees: 25,600
2006 In Review
Revenue: $2.47 billion
Profit Margin: 10.36%
Sales Turnover: 1.13
Inventory Turnover: 4.53
Revenue Growth: 36.68%
Return On Assets: 13.23%
Return On Equity: 35.1
Under the new agreement, UPG will be the exclusive provider of Amphenol connectors to the wheelchair and medical mobility markets during a base term of three years. The agreement is renewable for successive one-year terms after that.
Ken Beller, General Manager of Amphenol's North American Automotive Division, stated that his company's connectors are a perfect fit for making sure that consumers don't get injured by their own medical devices. "We believe that the medical mobility market currently lacks a solution to safely change out batteries, which can lead to injuries for the end-user. Our customized connectors, which will be marketed alongside UPG's SLA batteries, should address the need in the marketplace for improved product safety."
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