Household Clicker Clutter Problem Gets An Answer: Universal Remote

The digital living room is clicking for Universal Electronics. (NASDAQ:UEIC)
The Cypress, Calif.-based maker of universal remote controls is seeing growing demand for its products as people's homes get more cluttered with electronics.
Universal Electronics UEIC supplies remotes that aren't "universal." These remotes simply control a customer's product, such as the set-top boxes of cable firm Comcast CMCSA or the set-top boxes of satellite TV firm DirecTV DTV. Those remotes often do have some ability to consolidate functions from other remotes, but usually that's limited.
So Universal Electronics also makes high-end universal remote controls, led by its Nevo family. It calls these products intelligent remotes or smart remotes. Nevo features a touch-screen display with simple icons for activities like watching a DVD or listening to music. With it, users can wirelessly control PCs and other consumer electronics throughout the home.
Universal Electronics has been posting strong sales and profit growth. This quarter, analysts polled by Thomson Financial expect UEI to earn 30 cents a share, up 76%, on sales of about $69 million, up 32%. The stock hit an all-time high intraday Friday before closing down 3%.
IBD recently spoke with Ramzi Ammari, vice president of product development at Universal Electronics, about the state of the business.
IBD: What's Universal Electronics doing to solve the problem of too many remote controls crowding living room coffee tables?
Ammari: It's funny, because the more remote controls consumers have on their coffee table, the more of a market it represents for us. The average consumer has 13 to 15 remote controls scattered throughout the home, mostly in the living room. More and more consumer electronics devices come with remote controls. Essentially the home is getting cluttered with all these remotes. And the value proposition that a universal remote control brings is that you can eliminate all the remotes on your coffee table and use a single universal device.
You also can have buttons on that remote control that are specifically designed to give you access to activities within your CE (consumer electronics) equipment. So if you want to switch from watching a DVD to watching a TV show or listening to music, that experience is facilitated through a universal remote control through patented technology that's called "macros." One-button press will initiate a sequence of infrared codes that will control your television, your DVD player, change the input on your TV and audio video receiver.
IBD: What motivates people to buy universal remotes?
Ammari: The primary reason consumers buy a universal remote control is replacement. The Sony (NYSE:SNE) TV remote control broke, or they lost the remote control.
The second one is consolidation. The idea is that you have three or four devices that you want to put into one remote control.
IBD: Where is remote control technology headed?
Ammari: Touch-screen remote controls are becoming popular. They're a little bit more expensive.
IBD: What's the low end of the price range for touch-screen universal remotes?
Ammari: Right now you can buy touch-screen products maybe for $300 to $500 on the low end.
IBD: Why get a touch-screen remote?
Ammari: The beauty of a touch screen is that you can offer all the functions (of the remotes you're replacing). The touch screen will reveal eight or 10 functions at a time and the user can scroll through them to access the specific function. So you don't get the button clutter (of other remotes).
The Nevo is our flagship product. It's the culmination of a lot of different technologies bundled into a single device. The product offers universal remote control of any (audio-video) device. It's got a color, touch-screen display and built-in Wi-Fi. It connects to your home network so it can access and control the digital media content on your PC.
IBD: Any other trends?
Ammari: Remote controls are starting to get more interactive. Nevo is an example of interactive remotes that display and have intelligence built in that can give consumers a lot more information than the traditional universal remote does. That interactivity is being powered through a lot of new (radio frequency) technologies entering the home. The initial value of RF is "nonline of sight." With RF, you can be in another room, the device can be inside a cabinet, and the RF in the remote will send the signal wirelessly without having to point 20 the device.