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Home Audio Suppliers Hope To Expand Appeal At CES

12/19/2005 02:00:00 AM Eastern


Home audio suppliers exhibiting at January's International CES hope to rekindle consumer interest in their mature categories — or at least grab more share for themselves if the market continues to shrink.

With home audio sales in apparent free fall as MP3 player sales rocket skyward (see table), home audio suppliers hope to get sucked up in the MP3 updraft by building MP3 player connectivity in more of their products. Likewise, satellite radio connectivity will also play a central role in audio introductions, largely with XM-ready products.

Suppliers will also use new technologies to expand the appeal of mature product categories to increase penetration. Such technologies include wireless surround speakers in home theater in a box (HTiB) systems, two-speaker surround systems and other types of systems that are less visually obtrusive in the home.

In systems and component audio, suppliers will expand PC connectivity to more models and add video/up-converting HDMI inputs and outputs to simplify connections to HDTVs. In component speakers, whose sales have grown in dollars though not in units, suppliers hope to keep the step-up momentum going with higher performance and design-oriented models that complement ever-popular flat-panel TVs and narrow-profile rear-projection TVs.

In portable audio, dealers will find the industry's first flash-memory boomboxes, which will be unveiled by at least two companies. The selection of video-storing flash memory and hard-disk-drive headphone stereos will grow as some companies introduce their first such models and others expand their selection. In addition, the first MP3 portables to record time-shifted satellite radio content when plugged into an XM-ready home docking station and Connect and Play antenna/tuner will be displayed publicly by Samsung for the first time.

Here's a category-by-category look at what to expect at CES:

Stereo, home theater systems: Sales dropped in both segments in 2005, but suppliers hope to expand penetration and encourage replacement sales.

At least three suppliers, including LG Electronics, will launch their first XM-ready HTiBs to control connected Connect-and-Play XM Satellite Radio tuner/antennas.

At least two companies, including LG, will show their first HTiBs with USB Host connectivity to control and play back music on USB-equipped MP3 portables. Other suppliers will expand their selections. In addition, other suppliers will add USB Host functionality to play back video and pictures stored on USB drives or on other media storage devices.

To fit home theater systems into more rooms in the home and in more rooms generally, at least one supplier will unveil its first HTiB to deliver a 5.1-channel soundfield from two speakers. Denon and Sherwood already offer similar systems, which are intended for bedrooms or other small rooms as second systems, for people intimidated by hooking up a multi-speaker system, or for people whose rooms don't easily accommodate multi-speaker systems.

Wireless surround speakers are another way to lower the barriers to buying home theater systems. At least one major supplier will expand its selection of HTiBs with wireless-ready surround speakers, and LG will offer its first such model. For its part, Pioneer hopes to expand the HTiB market to consumers turned off by component clutter by expanding its selection of systems that pack all audio electronics and amplification, save for a small display panel, into a tucked-away subwoofer enclosure.

With its Acoustic Research brand, Audiovox will try another tactic: offering home accent pieces, such as wall sconces and mantle clocks that camouflage small HTiB speakers.

In two-channel shelf systems, dealers will find more models equipped with DVD players, more that control connected MP3 players and more CD-ripping models bundled with MP3 portables. RCA will expand its selection of the latter. At least two companies will show their first XM-ready two-channel shelf systems.

The XM-ready phenomenon will also expand to an LCD TV and a satellite set-top box, both from one supplier.

Home components: At least three audio suppliers, including Sherwood, will show their first XM-ready A/V receivers, and at least two other companies will expand their selection. Companies such as Denon, Marantz, Onkyo USA in its Onkyo and Integra brands, Pioneer in its Elite series and Yamaha already offer XM-ready receivers.

Connectivity with MP3 players in general and iPods in particular will also command attention. At least two companies plan to expand their selection of iPod-controlling A/V receivers. Companies already offering such receivers include Denon, Onkyo USA and Pioneer in its Elite series.

At least one more custom install supplier will show its first docking station designed to integrate iPods into distributed audio systems, enabling consumers to play back their iPod's music from any room in the house. At least six companies already offer such products or have announced them: Audio Design Associates, Crestron, Niles, Oxmoor, Sonance and SpeakerCraft.

In component speakers, which escaped the fate of other audio components with only minor wounds, suppliers hope to keep the step-up momentum going in 2006 with more of what drove dollars up last year: higher performance and design-oriented models that complement ever-popular flat-panel TVs and narrow-profile rear-projection TVs.

At CES, therefore, dealers will find more suppliers launching their first speakers to complement popular leading-edge displays with long, narrow-enclosure, small-footprint speakers that are often suitable for wall-hanging. The suppliers include PSB. At least two other companies will expand their selection of speakers for these applications.

Other companies, including Infinity and Tymphany, will demonstrate completely new approaches to driver technology to complement the new video displays.

Taking a different approach to encourage step-up sales, Jamo will unveil a floorstanding, enclosure-less (baffle-less) cone-driver speaker that the company says raises performance beyond the capability of traditional cabinet designs. And start-up Avega will show active networked speakers that incorporate wireless and digital processors to stream and play back music from PCs or networked media servers.

Table radios: At least one more company — vintage-electronics supplier Crosley — plans to unveil a high-quality tabletop AM/FM radio that's XM-ready, joining Eton in that market. Boston Acoustics will show its two-box Recepter Radio HD with digital HD Radio technology at a suggested $499. It's shipping.

Factory-Level Audio Sales

January-September 2005

2005 2004 YoY%
RECEIVERS
Units 1,125,476 1,418,867 -21%
Dollar Value $292,510,584 $373,661,428 -22%
HTIB
Units 2,550,059 3,314,996 -23%
Dollar Value $489,735,115 $639,969,653 -23%
COMPACT SYSTEMS
Units 4,418,788 4,722,855 -6%
Dollar Value $430,616,534 $609,058,220 -29%
SPEAKERS
Units 4,238,888 4,600,157 -8%
Dollar Value $342,303,855 $319,360,820 7%
MP3 PLAYERS
Units 12,633,290 4,501,973 181%
Dollar Value $2,282,075,888 $735,159,217 210%
PORTABLE AUDIO*
Units 25,123,792 30,658,473 -18%
Dollar Value $731,146,923 $931,377,076 -21%
*excludes MP3 players

Source: CEA ©TWICE 2005