Vendors: Bluetooth Kits Could Surge Again In Q4

By Amy Gilroy On Oct 13 2008 - 6:00am

Bluetooth kit makers are hoping for another surge in sales in the fourth quarter, following a boost this summer as hands-free-driving laws took effect in California and Washington.

Parrot said its sales spiked threefold in June and July while Scosche said sales increased by double digits. By August, however, the market was overstocked with kits and sales trailed off, suppliers said.

Now much of that inventory has sold through, and Parrot claimed sales are picking up once again. The company is planning an ad campaign to launch in mid-November, following a summer campaign.

Scosche said it believes the fourth quarter "will be one of the best we've seen in a long time," said VP Kas Alves.

Approximately 28 million drivers were affected by the July implementation of hands-free laws in California and Washington. Parrot claimed the increased attention helped generate sales in other areas of the country as well.

The Consumer Electronics Association (CEA) estimates Bluetooth car kits sales totaled $30.3 million, or 533,000 units, in sales to retailers year-to-date through July. The CEA did not track the category in 2007 so last year's figures are not available for comparison.

Some said the category is bringing consumers into the stores, but consumers are also confused about Bluetooth kits and salesmen may not push the product as aggressively as they should.

"We learned that there needs to be quite an education program with Bluetooth itself," said Parrot marketing VP Mike Hedge, explaining that many consumers think Bluetooth refers to a headset. "They're not aware of all the alternatives [and that] car kits are often better solutions," said Hedge.

In New York, New Jersey and Connecticut, where hands-free laws have been active for a while, many drivers purchased headsets initially, only to stop using them, said Hedge. "They found them to be uncomfortable, with poor audio and a short battery life. So they might even have the device in the car but aren't using it." As a result, Parrot "made an effort to educate consumers and the media that, yes, there's a headset but there are … professionally installed integrated kits, and if you are a serious commuter, and the average commute in California is 75 minutes, it is better to have an installed device."

Training salesmen is another industry hurdle. Seattle-based Car Toys claimed it is one of the better retailers for pushing Bluetooth because it sells cellular phones as well as car stereo. "Our guys are used to [Bluetooth] and it's part of a normal conversation for our guys. For the typical car audio specialist, it's not a normal conversation. We know the pitfalls. I think you'll see another [sales spike] at Christmas, but not as much as this summer," said Dan Jeancola, Car Toys senior merchandising VP.