Some Product Categories Still Thriving In Downturn

TWICE: Are any product categories faring particularly well during the downturn? Which have been harder hit? Are you seeing any impact of the proposed digital transition?

Tim Coakley, DBL: During downturns, people tend to stay at home vs. spending money on vacations, more expensive entertainment or home renovations. This recent trend is reinforced by growth in the TV and video gaming product segments. These segments continue to experience growth over the last month and the previous year.

Our most challenging segment continues to be custom install. This product segment has been most affected by the soft new-housing market.

DBL has seen a positive impact from the proposed digital transition. Our TV and converter-box sales continue to grow at an aggressive rate. As a one-stop shopping source, we will continue to promote the importance of the digital transition to our customers in the coming months and beyond.

Mike Cost, Brightstar: At Brightstar, we’ve observed a true bifurcation of the market with two categories over-performing the rest of the category: prepaid phones (low end) and smartphones (high end).

Lower-cost prepaid phones are still moving well. Yet we haven’t seen softening with the higher-cost smartphones. Consumers and businesses have either decided that a smartphone is something they can’t live without or they are consolidating their devices and services with smartphones as a cost-cutting measure.

Jonathan Elster, SED: The netbook category is very strong for us. These “mini notebooks” are growing as consumers are looking for less-expensive ways to add to or replace their current computing platform.

Although we saw some uptick in digital transition-related products, we believe there will be a strong wave of demand for digital TVs, tuner boxes and antennas after the June deadline passes.

Steve Honig, Volutone: Video products and mounts have been consistent. We have experienced a definite slow down with multi-room audio and whole house speaker sales.

Converter-box sales are through the roof and that has encouraged more flat-panel sell-through.

Ray Navarette, ArchBrook Laguna: TV has, as in prior recessions, continued to be a strong category. Many electronics categories, such as TV, computers, printers, digital music players and mobile phones, fall into the category of needs vs. wants — [much like] a major appliance: If it breaks, you need a new one and quickly.

Although the digital transition was delayed until June, a majority of customers in the major markets are all aware of the upcoming transition and continue to purchase digital TVs and associated converters.

Brett Neiderman, Edge: We’re seeing strong sales in categories such as mounts, surge protection, power management, automation and control, wire and interconnects. Accessories in general are doing well.

Video is tough based on the fact that it’s all about price and not quality these days.

There hasn’t been a recognizable impact yet based on the proposed digital transition, but we expect to see some bump as the timeline progresses.

John Soumbasakis, AVAD: Lighting and remote controls are two examples of categories that have experienced increased attention by dealers, and as a result, sales velocity has been good in these categories.

Entry-level audio and distributed audio have experienced the greatest challenge. Sales were driven by new construction so the building downturn has had a significant impact on those categories.

Our overall audio business has been keeping pace as we are seeing increased sales at higher price points. Video has also maintained its traditional share in our business.

The awareness created by the transition has had a positive impact on video sales. Our customers’ clients are not those still watching off-air signals but all the benefits of HDTV are driving consumers to upgrade now.

Bill Stewart, Petra: Our converter-box business has been phenomenal over the past several months.

On top of that, our retailers realize that it is vital for them to also offer their customers omnidirectional antennas to go along with every converter box sale — something the customer needs and the retailer can profit from. We are doing very well with gaming — an industry that remains strong.

Fred Towns, New Age: Notebooks are still doing well during the economic downturn. TVs are also selling well, although the market has been very competitive. I would say that PCs and monitors have been hit the hardest and, fortunately for New Age, we were able to shift product into non-traditional retail channels of our business such as Enterprise, to not get stuck with excess inventory. As far as the digital transition, the consumer is well-educated and has a more thorough understanding of the high-definition technology which has been accelerating the interest in Blu-ray.