Broad-line Accessories Execs Set '03 Sights

By Jeff Malester On Jan 9 2003 - 8:00am

Gauging accessories sales possibilities in the coming year makes for a tough forecast.

Broad-line manufacturers, who are involved in most all accessories category segments, were asked to offer their overall perspective, zeroing in on general industry direction.

Here, four key broad-liners take a look at what's ahead for accessories in 2003, and set their sights on generally positive expectations.

"The holiday season always brings a tremendous boost to the retail consumer electronics business. This year will be no exception," said Bob Borchardt, president/CEO of Lake Mary, Fla.-based Recoton.

"With the vast array of new technologies and affordable prices, consumers will be going to their local retail outlets to buy. Some of the key products they will be buying are large screen, flat screen and HDTV television sets; home theater receivers and five speaker systems to get 'theater-in-the-home' sound; and DVD players to receive incredible pictures (with the new TV sets) and sound.

"Others include MP3 portable digital audio players for great sound at home or on the go, and Jensen/Sirius Satellite Radio systems that enable people to have 100 channels of commercial free, digital radio with stations they never lose even when driving from coast to coast. And all of the above products can use accessories to enhance the installation process and help them perform even better.

"We see continued solid growth in consumer electronics. Today, more than ever, consumer electronics products represent some of the most incredible values for the consumer. You get more features, more functionability and years of highly reliable service from new, smaller, lighter and value-priced technology products.

"Today's youth are highly educated and proficient in using and relying on the many new technologies at school and play. Older folks have realized that they too must learn and start using these products in both their business and personal lives, and enjoy the benefits they provide. So it becomes a win-win situation for all — from the designers/manufacturers to the retailers and on to the consumers. Everyone shares the benefits.

"I've learned over many years that predicting future results is a difficult process. However, nothing can change my optimistic attitude toward life and business. Therefore, barring any major economic or other crisis. I believe that our consumer electronics industry will prosper, enjoying a solid year-end," said Borchardt.

"We believe the following categories will boost overall accessory sales during the first half of 2003," said Kent Shiplet, executive VP/marketing and sales at Oklahoma City-based Jasco Products.

"Audio/Video: Step-up cables and interconnects for digital equipment should reflect strong sales. This is, of course, being driven by continued growth in sales of DVD players, satellite systems and DTV/HDTV. Home Theater accessory sales also will remain strong, as market penetration continues to broaden demographically.

"Telecom: Accessories for wireless phones (cordless or PCS mobile) is positioned for solid growth. We are positioning our line to capitalize on the increased demand for head and ear sets. Sales are being fueled by the desire to have hands-free communication and laws requiring hands-free mobile phone usage while driving.

"Surge: Sales for multimedia surge protectors (provides surge protection for AC, phone line and video) should be particularly strong during the first quarter of 2003.

"Computer Accessories: The buyer intent for the purchase of PCs for the 2002 holiday season is 27 percent higher than last year. The pent-up demand for computers should bode well for computer accessory sales through the first half of 2003. Hot products in this category are optical mice, PC cameras, multimedia speakers, USB hubs and home networking," said Shiplet.

"With today's economic challenges, it is more important than ever to understand consumer lifestyles and habits," said Fred D'Angelo, manager of consumer communications at Itasca, Ill.-headquartered Fellowes Manufacturing.

"At Fellowes, we know that consumers continue to be drawn to, and motivated by, technology that helps keep them connected to friends, family and co-workers. Additionally, as the lines of work and play blur, many consumers use the same technologies for both office and home. Cellphones, PDAs, MP3 players, digital cameras and laptops all feed the motivation to stay in touch and up to date.

"Fellowes feels that while the economy remains soft, consumers will continue to focus on getting more out of the technologies they currently own. Protecting, organizing and enhancing technologies has become increasingly important. This creates opportunities in the accessories arena for products such as belt clips, PDA screen overlays as well as laptop, camera, PDA and CD carrying cases. Also, products like hands-free cellular ear sets and media labeling for CDs and DVDs continue to enjoy steady sales increases.

"Accessories that keep consumers connected — such as laptop, mobile phone and PDA power adapters for on-the-road or in-the-air — allow road warriors to continue a phone call or use their laptop to finish a movie. They also allow users to enter the finishing touches to a speech without the fear of a computer crash or disconnection.

"By understanding the lifestyles of today's consumers, retailers and manufacturers can maximize marketplace potential."

"To really understand the market, you must first understand the motivation for buying accessories," said Michael O'Neal, president/CEO at Clifton, N.J.-based Gemini Industries. "Consumers buy accessories to either make things work or to enhance their performance. In many ways, accessories associated with one need, can offset the other. Sure, folks may not buy a lot of new components, whether TVs, home theaters or the like, and therefore not need hook-up accessories. Instead they might buy that S-video cable needed to maximize the performance of the component they already own. We believe the accessory business will continue to be vibrant.

"In terms of specific product categories, we believe that the industry will continue to see tremendous growth in wireless products and those products that enhance the performance of digital component products. Consumers will want to maximize the performance of the products [DVDs, digital TVs] they have acquired over the last couple of years.

"The real challenge for manufacturers and retailers alike is to continue to make the use of new technologies more user friendly for the consumer. The industry has tended to overestimate the consumer's ability to use these new technologies and resultant products. Easy to understand packaging, instructions and point-of-sale materials will become a more important element of the overall product experience," said O'Neal.