2-Way Radio Market Awaits 2-Watt, 22-Channel GMRS
By Amy Gilroy -- TWICE, 2/11/2002
At least three suppliers — Audiovox, Cobra and Motorola — were awaiting FCC approval at press time for the first two-watt, 22-channel GMRS radios, which will give increased power and range, as well as channel flexibility, to the fast growing GRMS category.
All three suppliers displayed new two-watt, 22-channel models last month at the Consumer Electronics Show with Cobra and Motorola hoping for approval in the near term and Audiovox expecting the FCC go-ahead by April. BellSouth, Topaz 3 and Uniden also said they plan to submit two-watt, 22-channel GRMS units to the FCC.
Motorola pioneered the shift to 22-channel GMRS (from 15 channels) late last year when it received type acceptance for the T6400 at a 1-watt power rating.
"The 6400 was really an interim piece in advance of the 7200 which is a full two watt radio. We're waiting to get approval for the technology and for our radio," Randy Schiff, Motorola director of marketing for the Consumer Products Division said. "We're doing both, and, I presume, Cobra is as well."
Cobra, which showed the two-watt PR950DX and PR1100WX at CES is "hopeful and encouraged by some of the things we hear. We're confident that we will receive FCC approval," senior VP marketing and sales Tony Mirabelli said.
By June, Audiovox said the bulk of its line will be 22-channel GRMS with 38 subcodes and much of that will be switchable to two watts. VP consumer goods Ralph Etna claimed, "The old GMRS could only communicate on seven FRS channels and with these you can communicate on 14. So compatibility with existing FRS units, combined with power, is a big factor," he explained.
All 22-channel GMRS radios include shared FRS/GMRS channels 1-7; FRS-only channels 8-14 and GMRS-only channels 15-22.
The rapid rise in GMRS sales, and its higher profitability in comparison with FRS, has caused some suppliers to wonder if GRMS will quickly overtake FRS, especially now that GMRS radios incorporate seven dedicated, and seven shared FRS channels. "We're beginning to wonder what this will do to FRS. A lot will depend on where the prices go," Topaz 3 national sales manager Steve Koch said.
Unwired president Larry Richenstein said he doubted that GMRS will replace FRS in the near term.
GMRS has become an increasingly important segment of the FRS market in the past 12 months, expected to win 20 to 25 percent of dollar volume this year. Overall, FRS/GMRS are forecast to hit 12 to 15 million units in 2002, up approximately 10 percent from last year.
Cobra, offering the most optimistic figures, sees total FRS/GMRS sales hitting 15 million, up from 13.5 million to 13.6 million in 2001. At the conservative end is Midland, which projects 2002 sales at 9 million FRS units and 1.2 million to 1.3 million GRMS.
Several suppliers say the year will be challenging as prices hit rock bottom. In addition, new suppliers Kash 'N' Gold, under the AT&T brand, and Garmin are entering the market this year, both with units incorporating GPS. However, several suppliers say the newcomers do not pose a significant threat.
"Garmin is coming in at the extreme high end of the market at $149 or $249. At those prices you are not in the 20 to 30 percent market category, you are in the one percent category. Also you can buy a $99 GPS and a $49 GMRS and be in the same position, " Midland senior VP John Chass said.
Audiovox's Etna, however, says retail buyers are showing interest in combination GPS/two-way radio products. He also adds, "AT&T is going after the high end of the market, which most suppliers have not gone after. But time will tell."
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