Analyst Says Coinstar Should Up CE Recycling Position4 Feb, 2013 By: Erik Gruenwedel, Chris Tribbey
Redbox owner Coinstar also owns stakes in coffee and consumer electronics recycling kiosks
Redbox owner Coinstar should consider acquiring a majority stake in a kiosk company accepting used tablets, mobile phones and related portable consumer electronics, an analyst said.
Coinstar, which generates the bulk of its revenue from kiosk disc rentals (and soon SVOD platform Redbox Instant), is diversifying its product portfolio to include coffee and consumer electronics, in addition to its namesake coin trading business.
Eric Wold, analyst with B. Riley Caris in Los Angeles, believes Coinstar should acquire ecoATM, which last week said it would begin accepting used tablets in addition to cellphones at its 300 kiosks nationwide — with another 600 to 700 kiosks reportedly slated for installation this year.
Recycling is a burgeoning business in consumer electronics with third-party vendors flipping refurbished products through major brick-and-mortar and online retailers.
According to a recent report by the Consumer Electronics Association, sales of smartphones are expected to reach 130 million units in 2013 (up from 111 million last year), with tablet sales reaching 116 million units (up from 80 million last year).
Wold said a large percentage of these purchases represent upgrades requiring consumers to look for recycling or monetization options for their older devices.
“We continue to believe that ecoATM can provide an attractive path to revenue diversification and growth acceleration for Coinstar and expect that the company will move to take a majority ownership position in ecoATM this year (en route to acquiring the entire company),” Wold wrote in a Feb. 4 note.
Coinstar reports fourth-quarter (ended Dec. 31) fiscal results Feb. 7.