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Challenges Facing Headphones Reach All Avenues

3/12/2012 12:01:00 AM Eastern

TWICE: What are the current biggest challenges facing
headphones manufacturers? Is counterfeiting one of
them?

Noel Lee, Monster: In addition to the challenges inherent
to a competitive and thriving marketplace, today’s
headphone manufacturers are tasked with not only creating
products capable of standing out from the crowd,
but — in the case of companies like Monster that are
committed to dramatically improved sound quality — it
is a challenge to educate consumers about the very real
lifestyle benefits of better sound. To meet this challenge,
it’s imperative to work closely with retailers and help
them promote and demo ‘higher definition’ products in
the right ways.

The manufacture and sale of counterfeit consumer electronics
products is a major concern to all legitimate manufacturers,
retailers, and, of course, consumers. To combat
this problem, Monster launched a vigorous anti-counterfeit
and diversion program, and we’re working with federal
and state law enforcement not only here in the U.S., but in
the EU, China and Australia as well to stop the manufacture
and trade of counterfeit products globally.

Matt Engstrom, Shure: One of the biggest challenges
is that hearing can vary so much between people, and
everyone has a different preference when it comes to how
music should sound. At Shure our real challenge is to
identify a need and deliver a solution without compromising
customer expectations.

Akio Strasser, Phiaton: As with all categories in the
CE industry, retail space is limited. As the headphone
market continues to grow and diversify, it is more important
than ever for manufacturers to embrace and support
the retail channel. Developing creative ways to differentiate
your products, support dealers, and provide proof of
your product’s quality and value proposition is imperative
to overcoming challenges in today’s competitive marketplace.
Counterfeiting is a very real problem for many product
categories, and new precautions should always be
developed and utilized in order to protect both consumers
and manufacturers.

Val Kolton, V-Moda: As the old adage goes, “you must
be doing something right” if you are being copied. Counterfeiting
may seem like it is a huge issue, but I don’t feel it
is, in fact. It is only a concern for mostly a few companies
in America, namely Beats, V-Moda and Sennheiser. The
main danger for us is if consumers buy a counterfeit and
have a durability issue, especially on the fake in-ears like
Remix or Vibe ... The real challenge and extremely disturbing
trend in the industry is the intellectual property battles.
All of these legal battles are very bad for consumers, as it
occupies precious resources that could be used for product
innovation.

Lisa Phelan, Philips: Explosive category growth has
led to a proliferation of brands as more manufacturers
enter the space. Today, we see celebrity endorsements,
pure fashion brands and manufacturers with no history
or expertise in audio all trying to carve a niche for themselves.
This makes it more difficult to break through, even
when you have great products.

Fred Zecha, JVC Americas: A big challenge is staying
true to who you are as a brand, while at the same time
keeping up with market trends and providing the consumer
with a stylish, great-sounding and comfortable product. As
for counterfeiting, they say that imitation is the sincerest
form of flattery. If that’s the case, then we’ve been sincerely
flattered. There’s plenty of product out there with packaging
and product design that’s very similar to our own. It’s
not counterfeiting — they’re not using the JVC brand. But they mimic our design, and it’s a problem to the extent
that people might be confused about what they’re purchasing.

Cheryl Severini, Maxell: Counterfeiting has not
been an issue for Maxell in the headphone category. The
biggest challenge for us is in developing unique products
in a category with such a large number of suppliers.
Maxell’s main focus is in providing headphones and
ear buds that meet the needs of today’s users.

Suzann Taylor, Jasco Products: The toughest challenge
right now is raw materials pricing is on the rise.
As far as counterfeiting as an industrywide issue, yes.
If consumers are not buying headphones from a trusted
source, chances are they are a counterfeit version.

Judd Armstrong, Jaybird Gear: U.S.-based manufacturing
is not an option for headphone manufacturers
since all the resources have moved to China and
other developing countries. One of the largest threats
is increasing costs of production due to labor markets
in China, and the USD exchange rate. In time it will
force manufacturers to work closely with new suppliers
in other countries to ensure quality controls are appropriately
transferred.

Dan Levine, Skullcandy: Counterfeiting seems to
be a significant problem for relevant brands. It is always
shocking to see how quickly these knock-off artists
can bring a fake to market. We have a very aggressive
anti-counterfeiting strategy in place that begins
with protecting our intellectual property and extends to
targeting specific manufacturers and retailers that are
engaging in this disgraceful practice. With respect to
other challenges in the headphone category, brands
need to recognize that the consumer has become far
more demanding which has put the right pressure on
the market to bring innovative product to retail at great
speed. Of course, pricing is always a concern. The
promotional pressures on retailers during high-traffic
holiday seasons can have a lasting corrosive effect on
the category that is tough to unwind.