Distributors See Hopeful 1st-Half Signs

By TWICE Staff -- TWICE, 3/7/2011

TWICE: What is the current condition of the CE retail market? What does the first half look like?

Warren Chaiken, Almo: Currently, the CE retail market appears to be a little soft. This is not untypical as we go through the TV line transitions and work with our dealers to get their floors set with 2011 product. My guess is the CE market will be flat in the first half, with TV manufacturers working to get their arms around how their product is selling. The arrival of tablets will also create demand, but it is our perception that that this will be more of a second-half business as opposed to first-half.

Dennis Holzer, Powerhouse Alliance: The dealers aggressively advertising and promoting continue to do well. While profits are not where they should be, we have worked very hard with our factories to supply additional opportunities and products that will continue their momentum. As a result, our sales have also been good and we also expect them to get better as the economy strengthens and progresses.

Moving forward, sales will continue to be good for those who take advantage of the factory opportunities available and in conjunction continue pushing new and emerging technologies.

Consumers are spending and upgrading their homes with newer technologies, specifically video and Wi-Fi devices, such as iPad and tablets, and successful dealers are taking advantage of that.

Fred Towns, New Age Electronics: Most New Age Electronics customers reported having a better holiday selling season than expected, which is promising. They still have healthy inventory with great opportunities for selling current and new products. The consumer has had a tough winter season and is ready to get out shopping to see what’s new. The timing is good for selling tablets and the wide range of new mobility products in spring and summer.

Jeff Davis, D&H Distributing: Business for CE is holding up in retail, and business for TV is starting to revive. However, we have to sell more units to amount to the same dollars. That is why IPTV is compelling right now.

David Kaplan, DDG: Digital Delivery Group’s members target the custom integration (CEDIA) channel rather than retail, per se. After a tough couple of years, so far, the first half is feeling pretty good.

Dealers are learning to sell retro-fit and there are new products (and new vendors) responding to this trend. Value equations have changed and we are seeing more of our integrators selling new affordable solutions in areas such as security, content delivery and energy savings. I don’t want to jinx it by being overly optimistic as I had high hopes going into 2009, but the buzz I am hearing from the street is that things are picking up and seem to be getting better.

Tom Roper, SED International: The independent dealer is showing signs that the economy is starting to improve. The housing market is getting better, which is a good sign for the CE dealer. More new products like tablets, e-books and more Internet TVs will hit the market with a big splash in the first half. Also smaller LCD TVs — 32 inches and under — will see lower pricing, which will drive TV sales, while LED TV will be the driver by the TV and monitor manufacturers for profit for the dealers.

Jeff Kussard, Capitol: I’m leery of being too jubilant, though all indicators point to slow-but-sure growth over the next several months. No doubt this will be helped in a big way by the new generation of e-readers, tablets and, best of all, the related accessories that really add up to increased profits. Keep in mind, the tablet market will be as lucrative as the flat-screen business, i.e. big sales with razor- thin margins. But along with this relatively new category will come a tidal wave of accessories that will add up to a significant boost to the bottom line for retailers of all sizes.

Michael Flink, ADI: The custom-install A/V market has been flat, but is geared up for new growth as consumer confidence is improving and people are beginning to spend again. New media and technology, such as streaming video and music, will open up opportunity for dealers to call on their previous customers to offer these solutions.