BUSINESS

InfoSonics seeking name recognition in U.S.

Unless you buy your smartphones and mini-tablets in Mexico, the Caribbean or Central and South America, chances are you've never heard of InfoSonics Corp.

The San Diego company designs, manufactures and sells wireless handsets and other devices, such as tablets, to other manufacturers, distributors and consumers.

Its research and development center is in Beijing. The company also maintains a small quality-control office in Shenzhen, China, close to its manufacturing facilities.

InfoSonics, which was founded in 1994 and began trading on the Nasdaq stock exchange 10 years later, has 103 employees.

In November, InfoSonics reported net sales for the third quarter of $9.9 million, up 84% from the same quarter in 2012.

Third-quarter net income was $34,000, or less than a penny a share, compared with a net loss of $1.2 million, or 8 cents, in the third quarter of 2012.

Over the years, the company has moved from fixed land-line products to cordless phones to smartphones and tablets, said founder and Chief Executive Joseph Ram.

"You have to be nimble. You have to be able to adapt," Ram said. "Now, we are trying to be prepared for the fact that tablets are going to be replacing a lot more of traditional computer functions."

The latest

This month, InfoSonics announced the release of its newest product: a 7-inch tablet called the KolorPad that comes with a 1.3-gigahertz dual core processor that works off the Android 4.2 operating system.

The new device is meant to distinguish itself from other mini-tablets by providing greater functionality with traditional USB port access that allows the connection of a keyboard and mouse.

Ram said that the tablet can be used as a mini-computer. It retails for $149.

Last September, the company launched its new brand-name "verykool" smartphone, which is geared toward pre-paid phone service uses because of its lower price.

Priced at about $229, the phone has a quad-core processor, a 4.7-inch screen and 8 megapixel and 2 megapixel cameras.

Accomplishments

Asked what he felt his company's biggest achievement has been, Ram didn't miss a beat: "It's been surviving in this industry for the past 20 years," he said with a laugh. "It is a very tough industry."

Ram said that the company has managed to position itself well with its biggest customer base — that is, in Latin America — and could be poised to take advantage of consumers in the U.S. who are growing weary of the sticker shock they receive when their monthly wireless phone bills arrive.

"It can feel like they have another car payment," Ram said. "People are looking for alternatives. A significant number of new subscribers are coming from the prepaid side. They don't want to pay those high prices."

Challenges

Ram said his company continues to fight for brand recognition and "building up trust with consumers. I think it is going to take us a while to have consumers trust our products."

Ram said that although his company makes high-quality phones and tablets, "there is that gap between a very good product and an unknown brand. Our task is to bridge that gap so that the customer can get a product from us and believe in its value rather than seeing it as a cheap phone or cheap tablet that won't work for them."

Another challenge has been the company's share price, which has dropped low enough over the last year to risk delisting of its stock.

On Jan. 9, InfoSonics said, it received notification from Nasdaq that the company would remain listed because the stock had maintained a closing price of $1 or more a share for at least 10 consecutive business days.

Analyst views

No Wall Street analysts regularly cover InfoSonics.

CNBC personality Jim Cramer, writing at the Street.com investing website, rates InfoSonics as a hold, seeing strengths in its revenue growth but also weaknesses in poor profit margins and weak cash flow.

ron.white@latimes.com

Twitter: @RonDWhite

Copyright © 2015, Los Angeles Times
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