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Component Audio Sees Major Changes In Forms, Functions

1/06/2005 02:00:00 AM Eastern

Home theater receivers are changing their function in home entertainment systems, and component speakers are changing their form.

Receivers are morphing into the hubs of home entertainment and distributed-audio systems, while speakers are assuming more stylish shapes to complement new flat-panel video displays and a home's decor and will be seen here this week, during International CES.

Combined, the changes could help maintain the forward momentum that the component industry enjoyed in 2004, when factory-level dollar sales snapped back sharply from 2003's 18.4 percent decline and ended an eight-year string of declining sales.

For the January-October 2004 period, factory-level component sales rose 38.1 percent to $1.045 billion, following eight consecutive years of decline.

Suppliers cite multiple reasons for the turnaround, including more aggressive component marketing by retailers, growing demand in the custom-installation channel, products that simplify the operation and setup of home theaters, and products that look as good as they sound (see roundtable discussion on p. 149-150).

Definitive Technology's president Sandy Gross said, "The base has been set for a component-audio resurgence lasting a few years."

The base includes receivers that have morphed into what Harman Consumer Group president Gina Harman called the “hub of today's and tomorrow's home entertainment system." More A/V receivers, she said, “are including features that enhance video performance and make easier the integration of set-top boxes, DVD players/recorders, and other related devices."

Phil Abram, Sony Electronics VP of home audio/home video marketing, agreed. Consumers are "looking for a product that can ensure some form of device-to-device compatibility," in part through video upconversion to allow for a single video-cable connection to a TV, he said.

To capitalize on components' momentum:

  • Boston Acoustics and Samsungare showing their first home theater receivers, all at the high end.

  • Akaiwill enter the component audio market.

  • Denon and Samsung will tap the top in multizone home theater receivers. Samsung plans to show a $4,999-suggested retail model, and Denon will show a new model priced above a suggested retail of $3,000 to bridge the gap between its top-end $6,000 model and a $1,200 model. They'll join a $6,995 Lexicon model available since last September and a handful of models priced up to $4,500 from several other companies.

  • Companies such as JVC and Boston Acoustics will show their first receivers with USB connections to play back PC audio. JVC will offer two models with wireless connections to a PC.

  • JVC, Marantz, and Panasonic will show their first receivers with HDMI outputs; Denon will show its second. All but the Panasonic versions will upscale video to high definition.

  • Component-video up-conversion will appear in a greater selection of receivers at price points down to a suggested $399 from Sherwood.

  • Several companies will show new speaker solutions that deliver three or more surround-sound channels from a single-front cabinet that mounts on a wall or shelf. They're from Definitive, Samsung, and Yamaha (see p. 144).

  • Quad and Wharfedale will show their first flat plasma-display-friendly speakers.

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