Home Storage Sales Gains Tie To MP3 Players, DVDs

Santa Fe Springs, Calif. — The direction of accessories storage in the second half of 2005 should have major ramifications on this portion of the consumer electronics business, said Leo Dardashti, president of Atlantic.

“With the introduction of new consumer electronics, such as MP3 players, we see the trend in media storage moving toward home storage and away from portable storage.

“The portable media storage segment will start to shrink as consumers upload more music on MP3 players instead of carrying CDs. However, home media storage will continue to show growth because consumers need to continue storing CDs at home for uploading to their MP3 players.”

Additionally, Dardashti noted the rapid growth in DVD sales will further increase demand for multimedia home storage units, and with the eventual market shift to plasma and high-definition TVs, consumers will be looking to upgrade their current home media storage systems to complement the more modern look of their new entertainment centers.

“This will result in increased demand for more upscale style home storage units as consumers replace their older media storage units. Overall, we believe multimedia home storage (DVDs and CDs) will be a growth sector for a number of years to come.”

An emerging trend in the industry, said Dardashti, is products that bridge the gap between home and portable storage. One example is Atlantic's Rondo Collection that makes home and portable storage units compatible with each other. This collection has removable sleeves for CDs, where the entire CD sleeve can be removed from the home storage unit and easily inserted into any one of four different styles and sizes of portable storage units. “The timing is right for products that bridge the gap between home and portable storage,” he said.

As for the future, Dardashti anticipates accessories will be a large and growing market. “The explosion of new technologies, such as MP3 players, will require new and innovative accessories to support these products. While consumers spend time to make informed decisions on their consumer electronic product purchases, accessory purchases are impulse items where style is the key, and where media storage products generate impulse sales and profits for our retailers.”

Atlantic, which this year is celebrating its 20th anniversary, and has just moved into a new 150,000-square-foot state-of-the-art facility, reports sales figures are at an all-time high for home storage-related product categories.

Specifically, the company said unit sales for CDs are projected to grow by 21 percent in 2005 and are expected to move up an additional 80 percent by 2008, based on information from the CE Future Forecast database.

Using the same source, Atlantic said DVD player sales are expected to grow by 41 percent in 2005 and are projected to climb an additional 46 percent by 2008.

This growth is expected to drive increases in media storage, both in home and portable storage, through 2008 and beyond, said Atlantic.