$99 Head Units Tempt Suppliers

By Amy Gilroy On Jan 26 2004 - 8:00am

Suppliers are developing a love/hate relationship with the new $99 price points seen in 2004 head-unit lineups, including those of JVC and Panasonic.

"Ninety-nine dollars will be a huge part of the industry going forward," noted Sony mobile general manager Bill Lee. But Sony and several other suppliers say they are resisting the trend.

Alpine product promotion manager Todd Van Zandt said $99 doesn't make sense in light of broader market issues. "CD players are coming standard with new cars, so why would you want to replace a factory radio with a $99 one?"

"If it doesn't scare the heck out of retailers it should," Eclipse market and sales VP Ray Windsor said frankly. "It's the commoditization of the category that has driven retail for the last nine years or longer. We are resisting the tug of gravity," he continued.

To stem the tide, suppliers are offering the best deals possible mid-line to make it more enticing.

Sony brought down its FL display to the $249 segment this year while Pioneer is offering OEL at $260 and both MP3 and WMA at $200.

Even those companies offering $99 say they are trying to push the mid-line. Panasonic is touting motorized face with multiple-angle capability at $199, and JVC is offering full-motorized face with multiple-angle capability starting at $199. Last year, the feature began at $399. The aim is "to make the mid-level extra appealing," said national product planning supervisor Aaron Novak. Rockford Fosgate is pushing MP3, CD-R, CD-RW capability and flip-down face at $199.

At the low end, Sony's 2004 leader piece, the CDXR300 at $139, has a new "Motion Blade" CD-loading mechanism and a new MOSFET power chip with 120dB S/N radio, said the company. An MP3 version will also be available at $169. They ship in February.

New $99 models include the CQ-C1100U from Panasonic. It has full detachable face, 45x4-watt power, one preamp output and CD-R/RW capability. JVC's unit is the KDS5050 with detachable face and a single set of line-output terminals.