Marine Still Climbing, Enticing 'Autosound Retirees'

By Amy Gilroy -- TWICE, 2/21/2005

Marine audio continues to gain in sales, offering suppliers and retailers a welcome growth niche.

New boat sales are beginning to rise, and, more importantly, marine audio components are improving in quality and igniting demand for an aftermarket, say suppliers.

In addition, the segment may be enticing “autosound retirees.”

Many boat owners are “the guys that were 16 in the mid-80s who upgraded their auto stereo then, who are now in their 30s and early 40s, and they are looking to do the same in the boats,” explained Todd Allen, VP sales/marketing for marine supplier and distributor, Prospec, Mt. Pleasant, S.C.

Allen estimates total marine audio head unit sales last year hit 100,000 units, and are expected to climb 10 percent to 15 percent in 2005.

One of the hot opportunities for marine audio is in wakeboard boats (wakeboarding being an extreme form of waterskiing). Of the roughly 70,000 wakeboard boats sold in the past five years, almost all of them are ripe for an aftermarket upgrade since factory wakeboard audio systems are prohibitively expensive at approximately $4,000, said Allen.

Wakeboard boat sales are not necessarily increasing annually, but the sport is attracting a demographic that is interested in audio, said industry members. “It's popular to have one of those boats with a system crankin' on it. It's for young people who like music and extreme sports. It's the same people who buy car stereo for the cars,” said Andy Bagwell, general sales manager for nine-store Audio Express of Richmond, Va.

Aftermarket companies such as JBL and JL Audio are just now offering specially designed tower speaker systems to attach to the wakeboard tower.

Said Infinity's mobile audio director, brand marketing, Chris Dragon, “Marine is exploding.” Dragon said the trend towards quality marine audio extends from wakeboarding to waterskiing and tubing. “All we know is that our sales are going up exponentially, double digits every year,” he said.

Other suppliers see the market growing more slowly, but steadily. “This has been another opportunity that has been in front of us all along. It's a market that has not been properly treated in the way of having product that truly performs,” said Kenwood's car electronics VP, Keith Lehmann. “The industry has been fraught with product that was borderline substandard. The industry should have done better a long time ago, and now it seems there are some remarkable products coming into the market. I think it's going to grow with good steady growth,” he added.

Retailers are also beginning to expand their presence in the market.

Al & Ed's Autosound, Van Nuys, Calif., experimented with the category last year and is now adding marine audio centers in each store. “We believe it's a growth opportunity for 2005,” said product manager John Haynes.

Crutchfield offered, for the first time in years, a special page devoted to marine audio in its latest catalogue. The company has “been in and out of the category over the years,” said merchandising senior VP Dan Hodgson. He added, “I don't know that it will be in every issue. That depends on the results.”

Car Toys agrees sales are increasing but voices a bit of caution. “Some of our vendors believe marine is possibly even the 'next big thing.' I'm not sure we're quite that excited, but for sure it's a growth category for us,” said merchandising senior VP, Jim Warren. Over the past couple of years the company added the ability to perform installations at a boat dealership or marina, and is stocking new SKUs. “We even stock stainless-steel screws now for better final installations,” Warren said.

Not all suppliers are convinced the market will see dramatic increases. Pioneer's product planning manager Keith Burnett said, “I see many, many manufacturers entering the marine industry, but overall, as an industry, boat sales actually declined over the last few years. The industry is a very fragmented one because you have everything from yachts to kayaks, but the boats like ski recreational boats, have actually declined in sales.” He said the segment is a stable business, “but we're not seeing major growth.”

According to the National Marine Manufacturer's Association, boat sales in general declined from 2000 to 2003, but saw a double-digit gain for the first nine months of 2004, over the year prior. Wholesale dollar sales of new powerboats were up almost 17 percent, and unit sales were up 5.7 percent for the first nine months last year. Traditional powerboats (outboard, stern drive and inboard) were up 18.4 percent in dollars and 10.6 percent in units, it said.

One of the most enthusiastic suppliers about marine audio is Infinity, which is now shipping its previously announced 6100M Wakeboard Tower Audio system that attaches to a boat's wakeboard tower with swiveling cast-aluminum brackets. The speakers contain dual 6-inch midwoofers and a 1-inch tweeter. The system also has a microphone so the boat driver can communicate with the wakeboarder. Suggested list price is $1,099.

JL Audio is introducing its first marine audio products and is focusing on the high end of the market. Shipping in the second quarter are two tower systems for wakeboard boats, three “cockpit” systems, a 10-inch subwoofer and five amplifiers. Not all pricing has been announced, but the M770-TCS tower component system with 7.7-inch woofer and 1-inch tweeter will ship at $449.95 per pair, and the 10-inch M101B5 subwoofer at $279.95. Amplifiers will range from $239.95 to $649.95 said JL Audio.

Clarion introduced a new marine CD receiver with a marinized front panel and water-sealed media access door. It offers 212 watt by four built-in power at $449.99.

Kenwood is shipping in April its first head units built from the ground up for the marine market (rather than marinized car stereo head units). The Sirius-ready CD receivers have dual-zone capability and the step-up model KTS-400MR adds MP3 and WMA. Suggested prices are $449 for the KTS-300MR and $499 for the KTS-400MR.

Also new are Kenwood marine speakers including a 6.5-inch two-way speaker with 120-watt power handling, called the KFC-1652 ($149), and two 10-inch woofers (one powered) at $149 and $249 with shipping in March and April.

New from Audiobahn are marine audio speakers including a 6.5-inch two-way coaxial model AMS60N with 120-watt RMS power handling. The company also announced a partnership with marine distributor UX Audio and boat manufacturer Nor-Tech. The latter now offers Audiobahn equipment in a premium upgrade package, said Audiobahn.