Bluetooth Sales Look Promising

By Amy Gilroy On May 21 2007 - 6:00am

Some suppliers say that sales of Bluetooth kits are off to a good start with the attachment rate of kits to new high-end head unit sales, running higher than expected.

Eclipse, offering select aggressively priced Bluetooth add-on kit bundles for only $50, said the majority of consumers are opting to buy its navigation products with the kit. Sixty percent of Eclipse's AVN6610 sales, and 52 percent of its AVN5510 sales, include the kit, which is supplied by Parrot.

Kenwood, which offers a Bluetooth kit at the going industry price of approximately $199, said the attachment rate for Bluetooth kits to head units priced more than $300 is about 20 percent at key accounts and cutting-edge independent specialists. Senior VP Keith Lehmann said, "We expect that figure to increase as dealers learn how to demonstrate Bluetooth."

Fueling the Bluetooth market this year is growing consumer awareness as more cellphones with Bluetooth become available and as more states require hands-free operation while driving.

Hands-free laws are in effect in New York, New Jersey, Connecticut and Washington, D.C., and the state of Washington is awaiting the Governor's signature on new hands-free legislation that would take effect Jan. 1, 2008. A similar law will go into effect in California in July 2008, which is expected to be "a huge factor in the market" according to Parrot marketing VP Mike Hedge, who noted that the California law will affect 35 million people.

Parrot said its U.S. Bluetooth car-related sales (including kits and head units) are up this year through April by a factor of two to three times over the same period last year. The company is in a test program currently with Best Buy and claims that the larger retailers are now interested in Bluetooth.

Parrot said it sold about 3 million Bluetooth car kits worldwide last year. Its kits can be upgraded through a software update so that if a user buys a new cellular phone two years after he purchases the kit, he can be certain the kit will be compatible.

JVC mobile entertainment VP Bill Turner said, "According to numerous retailers, Bluetooth is emerging as one of the bigger "buzzwords" for 2007."

Alpine also called Bluetooth "one of the two big buzzwords right now on the sales floor," according to marketing VP Steve Witt. However, he noted that while consumers are aware of Bluetooth earpieces for cellular phones, most are unaware that Bluetooth can connect to car stereo system.

More suppliers are including head units in their lineup with built-in Bluetooth (with no kit required) at lower price points. Sony recently began shipping a CD receiver with built-in stereo Bluetooth at a record setting price. Called the MEX-BT2500, it carries at an estimated price of $180.

TRG estimates that 115,650 after-market head units with built-in Bluetooth will ship this year, increasing to 346,700 next year and hitting nearly 2 million in 2011.

Suppliers are also beginning to offer lower priced Bluetooth kits. Clarion will ship in June a stereo Bluetooth kit called the BLT-370 at a street price of $119 that will work with any of its head units from a street price of $109 and above.

Despite the "buzz" about Bluetooth, retailers report mixed sales.

Crutchfield senior director of mobile merchandising Carl Mathews said Bluetooth kits "are selling in small numbers in relation to the head units that control them for most brands. The Pioneer adapters are doing better than the rest."

Michael Cofield, president of Custom Sounds, Austin, Texas, said Bluetooth is one of the categories the company is targeting for growth this year. Sales are still barely getting off the ground, however, he said.

Hi-Fi Fo-Fum in St. Louis, Mo., said it installs a Bluetooth kit for three out of every 10 head units in the Alpine line. "It's catching on … You can pair the radio and leave your cellphone in your pocket. When it rings, it displays the name on the radio, and you just hit talk on the radio. People come in and ask for it," said installation manager Jimmy Traiteur.