iPod-Docking Systems Dominate Sales Of Home Stereo Systems

NEW YORK — Speaker systems that dock with MP3 players in general and iPods in particular are outselling traditional shelf systems by ever-widening margins as portable MP3 players become a key source of music content for the home, suppliers and analysts said.

As a result, the iPod speaker market is attracting new suppliers and generating line expansions. It's also encouraging suppliers to launch speaker systems with multi-pin connectors designed specifically for other-brand MP3 players, notably Microsoft's Zune players and SanDisk's Sansa players. SanDisk and Microsoft are among the top five MP3 player bands in retail-level unit shares, posting shares of 10.7 percent and 2.3 percent, respectively, in the third quarter compared with Apple's 72.2 percent, according to The NPD Group.

During the first three quarters of the year, NPD also found, retail-level dollar sales of amplified speaker systems, table and clock radios, and shelf systems with embedded iPod docks outsold traditional shelf systems (mini and micro combined) by about 2-to-1, NPD statistics show. (Shelf systems packaged with separate iPod docks are counted by NPD in the traditional shelf-system category.)

During the third quarter of 2007, NPD also found, iPod-docking devices accounted for 67 percent of combined sales of iPod-docking shelf systems, iPod-docking speaker systems and clock radios. That's up from full-year 2006's 63 percent of combined sales, NPD said.

For the year through August, retail-level unit sales of iPod speaker systems and clock radios grew 34.7 percent to 1.95 million, but with the influx of new suppliers and products, dollar sales rose only 4.4 percent to $216.6 million, NPD said.

For its statistics, NPD tracks sales in the ecommerce channel and at brick-and-mortar stores, excluding Wal-Mart, Sam's Club and Costco.

With those numbers in mind:

• Netherlands-based Boynq entered the U.S. iPod speaker market with two models in recent months.
• XtremeMac is expanding selection to three from two.
• Australian company VAF Research launched its first docks dedicated to iPods and Zunes.
• Altec Lansing launched its first speaker system for Zunes and its first speaker system for SanDisk Sansa players.
• Car stereo supplier Stillwater Designs is developing its first home and portable audio products. They'll include iPod- and Zune-docking products among other devices in 2008, the company said.

In all, Microsoft expects Zune-allied suppliers to offer 10 to 12 Zune docks in 2008, up from 2007. So far, Zune-dock suppliers include Altec Lansing, iHome and Australian company VAF Research.

The growth trend will also encourage major CE brands, not just accessory brands, to beef up their iPod-docking presence in 2008, suppliers told TWICE. At least one company confided that almost every one of its new music systems for 2008 will come with an iPod-dedicated dock in one form or another.