Digital TV, Networking Driving Accessories Biz

Two of the largest companies selling accessories into the United States are betting their bottom lines that the digital age of television will create an unprecedented demand for products that play a supporting, but critical, role in making the consumer’s viewing hours all the more enjoyable.

Both international giants, Thomson and Philips, bring lineups of accessories products to the U.S. selling table that are pointedly positioned for growth and have a legacy of brand names long associated with the accessories category.

Thomson purchased the Recoton family of accessories two summers ago — namely Acoustic Research, Discwasher, Ambico, Recoton and Spikemaster, among others — and Philips bought the Gemini accessories product stable one year later — including the Philips, Zenith, Magnavox and Southwest Bell brands.

Both companies are predicting positive selling results for the second half of the year.

“The accessories business is ideally positioned for further growth in 2005 due to opportunities created by the digital television transition and renewed consumer interest in home networking,” said Pierre Mureau, home networking accessories VP at Paris-based Thomson, which has its U.S. accessories marketing headquarters in Indianapolis.

Networking products that enable consumers to enjoy their PC content on other audio and video devices throughout the home is a category to watch in the second half of 2005, noted Mureau. “As consumers continue to build their digital libraries, they seek other ways to enjoy their content away from the PC. Products that have a seamless setup process and are easy to use will ultimately succeed at retail.”

HDTV continues to attract millions of new customers annually and is igniting the demand for accessories that further enhance the digital experience and deliver profit opportunities for retailers, said Mureau, who feels connectivity cables, antennas and speaker systems will be driving the growth of HDTV accessories this year.

“Our long-term objective is to serve as the systems integrator as the convergence of the consumer electronics and computer industries spawns the need for new products and technologies that we are developing,” summarized Mureau.

CE products, such as digital televisions and HDD devices, continue to drive growth in the business, said Michael O’Neal, CEO of Clifton, N.J.-based Philips Accessories and Computer Peripherals. “This creates the need for accessories that help maximize the experience in using these products. Digital television has revitalized the antenna business, while HDD has stimulated significant growth in the category of headphones and power adapters/cords.

“We believe accessories will continue to show strong growth as the year progresses, especially in those accessories that help consumers use their portable devices, including HDD devices, mobile phones, gaming devices and portable DVD players.” O’Neal determined key product growth categories will be power cords/adapters, portable speakers and headsets/headphones, and he expects strong category growth at retail for noise-canceling headphones.

“However, the growth in category sales of more traditional accessories has slowed in recent months as more consumers acquire portable products,” noted O’Neal. “We expect some of that to reverse, as consumers will be interested in connecting more of these products back into their in home components to gain the advantages of convergence.”