Audio Components Adapting To Hi-Def, Flat-Panel World

By Joseph Palenchar -- TWICE, 1/8/2007

LAS VEGAS — Component home audio roared back in 2006, and although it's unlikely to relive its glory days, it's getting more respect from dealers and consumers, based on factory-level sales statistics compiled by the Consumer Electronics Association.

Factory-level sales rose 19.7 percent during the first 10 months of 2006, to $918 million, in sharp contrast with 2005's 20 percent full-year decline. Industry sales in 2006, nonetheless, weren't expected to come close the industry's full-year peak of $1.93 billion in 1990.

In 2006, one of the main drivers for audio components sales was the emergence of A/V receivers as the hub of a consumer's high-definition home theater system and multiroom audio system, suppliers said. Key features included HDMI connectivity to HDTVs, video up-conversion to enable a single-cable connection to an HDTV set, and built-in high-definition 720p/1.080i video scalers, which could theoretically outperform the scalers built into many HDTVs.

Connections to new sources of music also proliferated in 2006, with more components controlling satellite-radio tuners and connected iPods.

In 2007, dealers will find a greater selection of A/V receivers with satellite radio controls and the growing influence of new high-definition disc formats and new 1,080p high-definition displays on the functionality of A/V receivers.

Here at CES, for example, dealers will find:

A/V receivers in Sherwood's Newcastle series at a suggested $1,000 and $1,500 with built-in 1,080p scalers, joining a $1,500 Sony model and $2,899-suggested ADCOM model introduced late last year.
The first A/V receivers with internal native decoding of all surround sound codecs that are optional and mandatory in the HD DVD and Blu-ray Disc high-definition movie-disc standards. They're from Sherwood Newcastle at a suggested $1,000 and $1,500, and they feature HDMI 1.3 inputs, which are capable of receiving all HD DVD and Blu-ray surround formats in native form for internal decoding. Earlier versions of HDMI can't transport losslessly compressed Dolby True HD or DTS HD Master Audio in native form, although those versions can transport the formats if the player first transcodes them to PCM.
Native Dolby True HD and DTS HD Master Audio can be transferred through HDMI 1.3 only if the disk player supports playback of the two formats and a disc's soundtrack is encoded in one of the formats.

HDMI 1.3 connectors are also capable of transferring improved high-definition video if the source produces the enhancements and the display is capable of rendering the enhancements. The enhancements include accelerated refresh rates to 120Hz from 60Hz, deepened color bit depth to 48-bit RGB from 24-bit, and more viewable colors to include every visible color that the eye can see.

The first A/V receivers that are simultaneously XM- and Sirius-ready. They're from Pioneer at prices starting at a suggested $299.
A/V receivers with 1,080p HDMI passthrough down to a suggested $399.

"There are increased opportunities with home theater components that feature improved HDMI 1.3, advanced calibration systems, portable audio connectivity, distributed audio via custom installation, as well new IP-based music distribution via clients and servers," said Pioneer marketing manager David Bales. More consumers may avail themselves of those advantages now that flat-panel high-definition television prices continue to decrease, leaving more money on the table to upgrade their audio components, he said.

See story below for details on component developments at CES.