Economy Hits Audio Hard, Says NPD

By Joseph Palenchar -- TWICE, 12/15/2008

PORT WASHINGTON, N.Y. — Four of five major segments of the home audio industry, except for MP3-docking speaker systems, contracted at the retail level through October, according to The NPD Group's Retail Tracking Service.

That stands in contrast to the January to October 2007 period, when only two of the five categories declined. The five categories traced are receivers, home speakers, home theater in a box (HTiB) systems, shelf systems and MP3-docking speaker systems.

For the 10 months ending October 2008, unit sales of MP3-docking speakers rose 14 percent at the retail level to 3.3 million, although dollar sales rose only 2 percent to

$302.2 million. The statistics include iPod-docking clock radios and tabletop radios. Last year at this time, unit sales were up 41 percent on dollar growth of 8 percent.

The HTiB system, compact stereo and home-speaker segments, however, contracted at double-digit percentage rates in units and dollars, while A/V receiver sales contracted only at single-digit rates, according to the NPD service, which tracks sales through major brick-and-mortar and online retailers, excluding Wal-Mart.

Sales of A/V receivers fell 8 percent in units to 866,000 during the 10-month period, while dollar sales fell 6 percent to $308.1 million. During last year's first 10 months, receiver sales were 2 percent in units and 8 percent in dollars.

Sales of home speakers fell in the 2008 10-month period by 17 percent in units to 1.7 million, with dollar volume slipping by 16 percent to $419.2 million. In the year-ago period, unit sales were down 6 percent on a dollar drop of 1 percent.

In home systems, HTiB sales fell 16 percent in units to 1.3 million, but dollar volume was down only 10 percent to $456.5 million. That compares to the year-ago period, when unit and dollar sales were up 3 percent and 2 percent, respectively.

In compact stereo systems, sales plummeted 36 percent in units to 805,000 and 31 percent in dollars to $97.8 million in the most recent period, whereas sales were off only 17 percent in units and 21 percent in dollars during the year-ago period.

Within the tracked segments, NPD found that 1 percent of the HTiBs sold during the 10-month period were equipped with Blu-ray players and that 2 percent of the HTiBs were soundbar-type systems. A total of 29 percent of the HTiBs came with included iPod docks.