By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Sales of iPod-docking speaker systems held up far better during the recession than sales of other home audio products, given the continued rise in household penetration of i-Pods and iPhones, the growth of multi-iPod households, the constant need to charge battery-draining iPhones, and the affordable prices of most models, at less than $199, marketers told TWICE.
The market's strength attracted new players in 2009, including traditional audio suppliers Yamaha and Pioneer. And it will persuade suppliers to introduce new models at next month's CES.
At the show, suppliers will expand the selection of docking speaker systems certified by Apple with the Works With iPhone designation, and they'll add iPod and iPhone docks to more and more home audio products, such as tabletop Internet radios, sound bars, and CD-equipped microsystems. One brand will show its first DVD-equipped iPod-docking microsystem.
Included docks have proven so popular with consumers that, in its revised July forecasts, the Consumer Electronics Association (CEA) projected that 90 percent of receivers would ship in 2009 with the ability to control a docked iPod or MP3 player, 49 percent of all-in-one compact stereo systems would ship with included docks, and so would 48 percent of HTiBs. CEA also expects 44 percent of home radios and 74 percent of clock radios to ship in 2009 with docks.
At CES, such suppliers as Altec Lansing, iHome, iLive, Acoustic Research, Philips Consumer Lifestyle, Stillwater Designs, the Alco-marketed RCA brand and the Audiovox-marketed RCA brand will show new iPod-docking products, whether speaker systems, clock radios, tabletop radios, microsystems or sound bars.
Also at CES, at least one docking-speaker supplier will add its first iPhone-certified one-piece and three-piece microsystems with CD player and its first iPhone-certified portable speaker systems (ilive).
At least two companies (Alco and iLive) will show their first speakers system to display iPhones and iPod Touches in landscape or portrait mode.
At least one brand (AR) will offer its first docking speaker system with built-in rechargeable battery and boombox-like handle for mobility. It will join currently available boombox docks from such companies as iLive.
And at least one company will tap the top in the speaker-dock market with a $499-suggested model.
Such companies see opportunity in a docking-speaker market expected to emerge in 2009 as the largest home audio category in factory-level dollars. In its mid-2009 forecast, CEA forecast 2009 docking-speaker volume would grow to $1.09 billion (excluding iPod-docking clock radios, home radios, HTiBs and compact stereo systems) compared to a forecast $943 million in home audio component sales, $937 million in home system sales (two-channel compact systems and home theater in a box systems), and $240 million in tabletop home and clock radios, including docking models. If those forecasts hold up, docking speaker systems will account for 34 percent of factory-level home audio sales in 2009, exceeding component-audio sales for the first time, exceeding HTiB sales for the second consecutive year, and exceeding total system sales (HTiBs and compact stereos combined) for the first time.
Despite the influence of docking speakers in the home audio market, several years of double- and triple-digit dollar gains have come to an end because of high household penetration rates, but there's still room to grow because much of the total addressable market is still untapped, marketers said. The household penetration of MP3 players stood at 46 percent in January 2009, well ahead of docking speakers' 30 percent, CEA consumer surveys show. And that doesn't include the potential for additional sales to multi-iPod homes.
High household penetration and the recession combined to slow unit sell-through growth to low-single-digit rates during the first three quarters of 2009, with dollars falling about 5 to 6 percent as suppliers and retailers reduced prices to combat the recession, marketers said. But suppliers expected growth to return in fourth quarter, perhaps as much as 10 percent in units compared to a flat year-ago quarter, with dollars up at a lower percentage rate. Even if unit sales grow as much as 10 percent in Q4, however, dollar sales for the full year would likely be flat to down 3 percent, marketers said.
Sales of MP3-docking speaker systems held up better in 2009 than any other major home audio category and will do so again in 2010, marketers contend as they refresh their docking-speaker lineups here at International CES.
For 2010, retail-level sales could grow as much as 5 percent in both units and dollars, with high-end devices at $299 and up enjoying about the same growth rates, suppliers said.
Sales have remained robust because of the continued rise in household penetration of iPods and iPhones, the growth of multi-iPod households, the constant need to charge battery-draining iPhones, and affordable prices (mostly less than $199), marketers told TWICE.
Docking-speaker sales have been so strong, and sales of other home audio products so weak, that docking speakers were expected to emerge in 2009 as the largest home audio category in factory-level dollars. In its mid-2009 forecast (see table on p. 66)), CEA forecast 2009 docking-speaker volume would grow to $1.09 billion (excluding iPod-docking clock radios and home radios) compared to a forecast $943 million in home audio component sales, $937 million in combined systems sales (two-channel compact systems and HTiB systems), and $240 million in tabletop home and clock radios, including docking models. If those forecasts hold up, docking speaker systems will have accounted for 34 percent of factory-level home audio sales in 2009, exceeding component audio sales for the first time and, for the second consecutive year, HTiB sales, CEA's statistics show.
Nonetheless, the market is maturing. Several years of double- and triple-digit dollar gains have come to an end because of the segment's high household penetration rate, but there's still room to grow because much of the total addressable market is still untapped. The household penetration of MP3 players stood at 46 percent in January 2009, well ahead of docking speakers' 30 percent, CEA consumer surveys show.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.