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Some suppliers are focusing on entry-level, step-up head units because of a new trend in CD receivers: Consumers are choosing $130 CD receivers over the price leaders at $99.
In 2005, the Pioneer DEH P3700 became the best-selling CD receiver in the industry through October, according to the NPD Group, Port Washington, N.Y. The unit had an average selling price of $133.95, with MP3/WMA/WAV, and outsold $99 CD players, said NPD.
This fact has lead Sony and other suppliers to focus on products in a similar price range. Sony mobile electronics marketing director Andrew Sivori noted, “2005 was the first time in five years that an opening-price-point CD player was not the class leader.”
Pioneer marketing VP Mike Townsen acknowledged, “What we saw last year was the entry-level fell below expectations while the midpriced product like the 3700MP exceeded expectations.” He said the trend was likely due to the high penetration of CD players in new cars, “so people who are replacing those are going to upgrade to get more feature content like MP3/WMA playback.” He suggested another reason: “We think that other devices are competing for discretionary income at that entry-level price point. So perhaps someone bought an iPod instead of a $100 CD player.”
This year, suppliers are responding by packing high-demand features in step-up models price at approximately $129 and above.
Sony is shipping the CDX-GT300 this month, which offers satellite radio control (XM and Sirius), rotary encoder, fold-down faceplate and second preamp output at a $149 suggested retail price.
Panasonic is now offering Bluetooth, satellite radio, iPod and MP3 capability starting at $139 suggested retail price.
Pioneer said its low-end price point will remain at $99 with MP3 units starting at $125. Panasonic will offer MP3 units starting at $99, it said.
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