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Point-of-sale terminal prices are not likely to drop despite the recessionary economy, the leaders of two of the largest makers of the devices say. Executives from Hypercom Corp. and VeriFone Holdings Inc. recently told analysts in separate conference calls that they do not foresee a price war, despite slipping demand in many large markets, including the United States (CardLine, 12/17). The current economy does not reward companies chasing "the last dollar of revenue," Douglas G. Bergeron, CEO of San Jose, Calif.-based VeriFone, told analysts. Instead, VeriFone's goal is to bolster its gross margins, he said. "We are less than ever interested in the last dollar of revenue and a substandard gross margin," he told analysts. Meanwhile, Philippe Tartavull, CEO and president of Scottsdale, Ariz.-based Hypercom, told analysts during the company's third-quarter earnings call in late October that his company will be able to gain market share "without sacrificing too much [on] prices." Tartavull, too, is concerned with increasing the gross margin. "There will be large opportunities [in] certain countries that we may have to sacrifice a little bit [of] margin," Tartavull told analysts. But Hypercom is sturdy enough to do that and grow the company's market share, he contends. "So we may sacrifice a little bit of revenue for the moment, but we will drive that for [an improved] gross margin," he said.
