Hardware Demand To Fuel Strong 2nd-Half Sales, Execs Say
By John Laposky -- TWICE, 7/3/2006
New York — The stage is set for strong second-half sales of accessories, according to some key manufacturing executives, as they ride the wave of emerging technologies and new hardware categories.
Rapidly growing consumer demand for flat-panel TV, the explosion of the portable devices category and the dawning of the high-definition video recording revolution were cited as just a few marketplace drivers for increased add-on purchases.
“Sales are up. As long as you attach to the right technologies, your sales are going to be up,” said Brett Allsop, president of Bellingham, Wash.-based Allsop. “We’ve always felt that as an accessory company we get the best of both worlds. When the economy is booming, consumers are making big purchases and buying new accessories to match. When the economy slows,accessories spruce up an existing home theater, sound system or computer station.”
“I dare say the optimism we feel in the second half is always greater than in the first,” Allsop continued. “The products we launched at CES have been on the market for a few months and we are getting sell-through data, which fuels more sales and gives us a chance to fine tune our assortments.”
Thomson is slating product introductions “that directly support some of the industry’s fastest growing categories — MP3 players and flat-panel digital TV. These products should further expand on first-half sales growth,” said Sharon Vernon, accessories businessgeneral manager.
Bill Otte, VP/business line manager at Philips, concurred. “Optimism remains high for the second half as sales of flat-screen TVs, and portable audio devices are expected to continue to rise through Q4.”
Jasco’s strategic marketing VP Kent Shiplet identified the ongoing consumer conversion from analog to HDTV as a prime driver of accessories sale. “It has provided a strong lift in midlevel to high-end A/V connectivity, HDTV antennas and home theater accessories,” he said. “On balance we project retailers will experience [second-half] increases in the area of 8 to 9 percent.”
And the second half has the calendar on its side, said TDK VP Bruce Youmans: “The back-to-school period always brings strong demand for recordable media as students head back to campus [and] the holidays are our strongest selling season.”
Portable devices, in particular, have spawned an entirely new and very profitable market for accessories vendors in a few short years. A plethora of portable power packs designed for today’s increasingly high-tech — and high-drain — cellphones, handheld gaming systems and portable MP3 and satellite radio players have hit the market recently from companies such as Energizer, iGo and American Power Conversion.
Protective cases for those same devices, in every color, texture and style imaginable, have flooded the market, as have hundreds of headphone, headset and keyboard options from virtually every full-line accessories maker and a host of new brands.
Bluetooth accessories have also been a boon at retail as the wireless technology continues to proliferate on the hardware side.
Some challenges remain though, according to Don Patrican, Maxell’s executive VP. “As an industry we have a huge opportunity to energize sales by cultivating the potential of the high-definition television experience through HD DVD and Blu-ray. From the beginning manufacturers and retailers need to work together to educate the consumer about what the two formats are, why they are different and what the features, benefits and applications are.”
Format confusion aside, Patrican is as optimistic as the others. “On the care and maintenance and headphone side, the incredible growth of iPod players and increasing excitement about large-screen and flat-screen televisions and monitors have energized accessories sales in those areas.”
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