OEM Integration Slow Out Of Gate

By Amy Gilroy -- TWICE, 10/9/2006

New York — The branded OEM integration device, expected to become a new frontier for car audio, is hitting some initial speed bumps.

Suppliers say the category is seeing only moderate sales at present. Rockford's 3Sixty is selling slightly below expectations. Kenwood said while initial sell-in for its KOS-A200 was strong, reorders have been slow.

According to Keith Lehmann, Kenwood senior sales VP, “These devices are not sexy. They are not like a DVD player with a screen. This is a solution device that becomes a necessity, so the dealer needs to merchandise it.” Kenwood is currently working on a merchandising program.

Rockford said its higher end 3Sixty, which combines a sophisticated sound processor at $599, has been selling better than the $299 lower end integration device. Both products shipped in March.

“It's going to take some time for OEM integration to move from being an important niche category to becoming a mainstream category,” according to Manville Smith, JL Audio marketing VP. “As with any new way of doing things, there are those retailers who adopted early. A small percentage of retailers are absolutely kicking butt in this category and have grown their business because of OEM integration, so it's an early sign that the whole thing has traction. A much larger percentage of dealers have dabbled in it but have not worked hard on making it an everyday sale in their store. Another percentage doesn't want to have anything to do with it.”

JBL said it postponed its MS-8 OEM integration device launch until early next year while Alpine has postponed its PXE-H650 launch until a date some time before year's end at $400 suggested retail price.

JBL's MS-8 (formerly called the Fix8) will connect to an OEM radio to apply sound processing and amplification. The company will show the product in a BMW 3 series car at International CES because “a lot of retailers are afraid to work on late model BMWs with iDrive,” said product marketing manager Andy Weymeyr.