Home Audio, Game Mkts. Targeted By Altec Lansing

LAS VEGAS— After spending the better part of the last decade strictly focusing on the PC speaker market, Altec Lansing will launch itself in two new directions this year with a return to its home audio roots and with a move into the game console speaker market.

These moves are part of a top-to-bottom revamp of the storied audio company whose history dates back to the 1920s when it installed sound systems in movie theaters, said CEO Mark Lucas. At the same time Altec is looking forward to taking advantage of the exploding game console market with the introduction this week of a surround sound system for gamers.

"We have created a new mission for the company and want to leverage our history so we will be getting back into the theater, home theater, and home and professional studio markets," he said, adding the release of the xBox and GameCube make that market the place to be this year.

While these changes are being implemented Altec will continue its PC speaker efforts and this category will remain the company's No. 1 priority for the next several years with the gaming speakers as a subset. Several new PC speaker models are being introduced this week at CES. However, with PC sales flattening and not expected to grow, Lucas sees multimedia speakers and the game console market slowly merging into one new product category as the latter gains in importance and speakers decrease in importance.

The game speaker family is being designed from the ground up to appeal to gamers with tons of bass, a feature gamers love, Lucas said. The family will include 2.1 (two speakers and a subwoofer) to 5.1 systems and be priced comparatively with the game systems themselves.

"Consumers are not going to pay $500 or $600 for a surround system when the game itself costs $299," Lucas said.

Altec Lansing is talking with a range of retailers for the gaming speakers, including Toys 'R' Us, the consumer electronics superstores and the smaller software chains like Babbages etc.

In the same manner that Lucas sees the multimedia and game console speaker segment slowly combining, he believes the gaming speakers could slowly meld with traditional home theater speaker systems. Although this would not happen for quite some time, Lucas said.

Part of Altec's preparation for this is its interest in jumping back into the home theater market sometime during the second half of this year. Lucas foresees a successful re-entry into this market because the company retains a strong following of consumers that remember Altec from its days as a player in the audio field.

"There is something of a cult following with Altec, sort of like Apple's," he said.

Altec Lansing will aim high with its home theater products looking to compete with all the big Japanese players and with systems produced by Bose, Lucas said. "We are going to take it [home theater] to a much higher level from where it is today."

Plans for the company's professional level products are not clear at this time. Car audio, an area that Altec had played in during the 1980s with its Sparkomatic products, is not part of the company's revival plans, said Lucas.

Lucas is matching the product changes to a new corporate branding and marketing campaign that will play off of Altec's audio industry image. "Some look at Altec Lansing as having a rich heritage, but people say we have lost some of our shine so we want to bring a fresh new look to it," Lucas said.

This may possibly include a new company logo and tag line along with a new look for the products and packaging.

The company is also expanding its international presence. Altec recently entered the Latin American market and is set to open an office in Europe this year. This will lead to a 20 percent increase in the company's workforce in 2002, Lucas said.