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By Frederick H. Lowe
NCR Corp., Wincor Nixdorf AG and Diebold Inc., the world's three largest ATM manufacturers, traditionally have not disclosed their worldwide shipment data for competitive reasons. Last week, Paderborn, Germany-based Wincor Nixdorf broke the mold to signal—and perhaps even to boast—how much its business is growing.
Whether Wincor Nixdorf's action will compel NCR or Diebold to release their shipment data is unclear, though some observers doubt they will.
Wincor Nixdorf shipped 76,041 ATMs worldwide in 2008, up 24.3% compared with 61,170 machines in 2007, Patrick Wright, president of Wincor Nixdorf USA, said in his opening remarks at a forum in Chicago last week sponsored by Wincor Nixdorf and SourceMedia, publisher of ATM&Debit News. The company's workforce also continues to grow, to nearly 10,000 workers worldwide from about 9,000 a year ago, Wright says.
The numbers have become a matter of pride for Wincor Nixdorf, says Gil Luria, an analyst at Wedbush Morgan Securities in Los Angeles. "At one point, their shipment numbers were not big enough to talk about," he says, explaining that Wincor Nixdorf's efforts have focused on selling ATMs in emerging regions, where the company's price points are much lower.
Those regions, which include the Middle East and Africa, Southern Asia Pacific, Northern Asia Pacific, Caribbean and Latin America and Eastern Europe, will continue to grow, according to information compiled by NCR through an internal analysis and data developed by The World Bank and London-based Retail Banking Research Ltd.
"The market in emerging regions has the potential for another 1.4 million ATMs," Bill Nuti, NCR chairman and CEO, told analysts in December.
Wincor Nixdorf did not provide shipment numbers by region. The shipment data includes all models, ranging from cash dispensers to envelope-free ATMs, says Chad Wagner, Wincor Nixdorf USA's marketing director.
At the insistence of Wincor Nixdorf, Retail Banking Research, which produced an industry ATM-shipment report paid for by the ATM maker, announced last June that Wincor had passed North Canton, Ohio-based Diebold as the world's No. 2 ATM maker based on 2007 shipments (ADN, 6/5/08). Wincor did not release specific shipment at that time.
Wincor Nixdorf had been catching up with Diebold for more than a decade, says an industry insider. In 1994, the company was the world's 12th largest ATM manufacturer, company officials say. Wincor Nixdorf said it controlled 21% of worldwide ATM shipments in 2007, which was up from 18% in 2006 (ADN, 6/5/08).
Last September, Eckard Heidloff, Wincor Nixdorf president and CEO, told ATM&Debit News the company passed Diebold in worldwide shipments, though Wincor Nixdorf did not have a strong presence in the United States (ADN 9/11/08).
According to the 2009 edition of the EFT Data Book
ATM&Debit News' 2009 EFT Data Book, Wincor Nixdorf shipped an estimated 5,269 machines in the U.S. in 2007. The ranking placed Wincor Nixdorf sixth behind Diebold, NCR, Nautilus Hyosung Inc., Triton Systems of Delaware Inc. and Tranax Technologies Inc.
Before the EFT Data Book's release, Wincor Nixdorf announced a 10-year goal of capturing 20% of ATM shipments sold to U.S. banks. However, that market share figure does not include the installed base of ATMs in the U.S., where Diebold controls a 55% share, Thomas Swidarski, Diebold president and CEO, told analysts during a fourth-quarter earnings conference call last week.
Wincor Nixdorf controls less than 5% of the installed base of U.S. ATMs, say industry observers.
Recent U.S. bank mergers, however, may favor Wincor Nixdorf, though banks traditionally buy their ATMs from NCR, Diebold and most recently Korea-based Nautilus Hyosung.
Two of Wincor Nixdorf's biggest customers—Wells Fargo & Co. and JPMorgan Chase & Co.—have expanded their ATM networks through the purchase of rivals. Chase last year bought Washington Mutual Inc. of Seattle, and Wells Fargo bought Charlotte, N.C.-based Wachovia Inc.
In recounting which banks are buying envelope-free ATMs, the industry's hot market, Diebold's Swidarski's told analysts during the company's fourth quarter earnings call that "Wachovia wasn't rolling out deposit automation when Wells Fargo bought the bank." Swidarski implied that Wachovia may enter the "intelligent-deposit" market now that it is owned by Wells Fargo.
About 2,000 of Wells Fargo's 6,950 ATMs before it bought Wachovia did not require envelopes for deposits, Ramesh Arunashalam, Wincor Nixdorf U.S. senior product manager-deposit automation, told ATM&Debit News at the forum last week.
Wells Fargo could decide to move its entire ATM network to envelope-free machines. The bank certainly seems to be going in that direction. Last October, Wells Fargo announced that it was deploying 277 envelope-free ATMs in the Los Angeles area (ADN,10/2).
On the other hand, Chase, which began installing envelope-free ATMs in 2008, will replace its entire ATM network with intelligent-deposit machines, say bank executives.
As a result of the mergers, New York-based Chase operates the nation's second-largest ATM network with 14,272 machines, and San Francisco-based Wells Fargo has the third largest with 12,227 ATMs.
ATM&Debit News asked Wright if Wells Fargo's purchase of Wachovia and Chase's purchase of WaMu was a good sign for Wincor Nixdorf. Wright smiled and referred the questions to the banks.
Others, who requested anonymity, were not as reticent; they said the mergers potentially represent very good news for Wincor Nixdorf.
Shelly Chandler, Wachovia vice president of service excellence, and Wright recently visited Jonathan G. Velline, Wells Fargo senior vice president of ATM banking and distribution strategies to discuss ATM uptime availability.
Velline has played a significant role in Wincor Nixdorf's success so far in the U.S.
In a deal with Wincor Nixdorf, Wells Fargo in 2006 became the nation's first major bank to deploy envelope-free ATMs under Velline's leadership, giving Wincor Nixdorf a foothold among the nation's 20 largest financial institutions in the U.S. bank market.
