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Docking-Speaker Market Adjusts To New OS Realities

1/10/2012 12:01:00 AM Eastern

LAS VEGAS — A maturing iPod/iPhone-docking speaker
market is prompting suppliers here at International CES to
shift gears to accelerate sales.

Many docking-speaker suppliers are adding Apple’s
wireless AirPlay technology to spur
repeat and step-up sales, and others
are adding stereo Bluetooth and
MicroUSB charging ports to tabletop
speakers to expand the total
addressable market to owners of
Android, BlackBerry and Windows
smartphones.

The iPod/iPhone-docking speaker
market struggled to grow in 2011
because of market maturity, iPod
sales that are falling as sales of music-
storing smartphones rise, and
growing iPhone competition from
Android-based smartphones, suppliers
said. Android smartphones
increased their share among smartphones
users to 43 percent at the
end of the third quarter from the
previous quarter’s 39 percent, the latest Nielsen statistics
show. Among smartphones users, Apple’s share remained
stagnant at 28 percent in the third quarter compared
to the second quarter.

Some retailers have scaled back their docking-speaker
selections in response to perceived market maturity, added
Spectra Merchandising president Patricia Schoenberg,
whose company markets Jensen-branding docking
speakers.

Through September of 2011, retail-level sales of docking
speakers slid 7 percent in units and dollars, mainly
due to softness in the clock radio and boombox/radio segments,
said Roy Carpenter, Philips Consumer Lifestyle
marketing director.

One way to turn things around is to expand the market’s
potential customer base, suppliers said. “Historically, iOS
devices have driven this market segment,
and now over half of the market
[for mobile devices] is Android
and other smartphone platforms,”
said Raleigh Wilson, Altec Lansing’s
sales and marketing executive VP.

To fill the void, suppliers here are
expanding the industry’s selection
of Bluetooth speakers, designed to
stream stereo music from any smartphone
or tablet equipped with stereo
Bluetooth.

Some suppliers — including Philips,
iLuv and startup Soundfreaq —
are combining stereo Bluetooth with
MicroUSB ports that charge non-
Apple smartphones while streaming
their music via Bluetooth.

Eventually, an expected Android
upgrade allowing an Android phone’s audio signal to
pass through the phone’s MicroUSB port “could limit the
need for Bluetooth connectivity as newer Android devices
could dock, play and charge just as Apple products do,”
Philips’s Carpenter said.

In the meantime, tabletop speakers that “dock” via wireless
Bluetooth or Apple AirPlay will gain traction among
consumers who want to keep their smartphones and
tablets close at hand while listening to music through a
tabletop speaker, suppliers said. AirPlay will also appeal
to iPod and iPhone owners who want to stream music to a powered speaker from a networked PC’s
iTunes application, they said.

“We expect that as awareness grows, iOS
audio accessories will begin to shift to AirPlay,
and simple hard-docking speakers will shrink
on all but entry-level price points, as consumers
look for a charging and listening solution,” said
Altec’s Wilson.

To tap into potential demand for new types of
docking speakers:

• Klipsch’s Energy brand, Westinghouse,
Eton and Spectra’s Jensen brand are launching
their first stereo-Bluetooth speakers;

• Pure Audio and VOXX’s Acoustic Research
brand are launching their first AirPlay speakers;

• Klipsch and iHome are expanding their Air-
Play selection;

• Sharp (see page 17) is launching its first
two AirPlay-equipped micro systems, which
also feature iPod/iPhone/iPad dock; and

• iLuv is pairing stereo Bluetooth for the
first time with a charging MicroUSB port in a
speaker system to dock, play and charge smartphones
other than iPhones (see p. 4).

In other docking speaker developments,
iPad-docking speakers are proliferating as
Coby and newcomer Behringer launch their
first, Sharp launches its first two iPad-docking
microsystems, and Soundfreaq and Spectra’s
Jensen brand expand their selections. (See stories
on this page and p. 116 for a closer look at
what these and other suppliers are launching.)

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