Home theater in a box (HTiB) sales dropped in 2005, but suppliers are doing their utmost at International CES to encourage replacement sales and expand penetration.
In large part, suppliers are trying to make their systems less visually intrusive and less challenging to set up, in some cases turning to virtual surround technology and wireless surround speakers to increase the maturing category's penetration. Systems are also expanding their appeal by controlling products in the high-growth MP3 portable (see story on p. 7.) and satellite radio categories.
The shrinking stereo shelf system market is looking to similar capabilities, including MP3 player and satellite radio links, to expand their appeal (see story on p. 74).
To expand HTiB penetration, Sharp is unveiling its first HTiB with virtual surround technology to deliver a 5.1-channel soundfield from a single speaker-equipped set-top component and an outboard subwoofer. Samsung will show a two-speaker version with subwoofer. They're intended as second systems in bedrooms or other small rooms, for people intimidated by hooking up a multi-speaker system and for people whose rooms don't easily accommodate multi-speaker systems.
Companies such as Denon, JVC and Sherwood already offer two-speaker home theater systems using virtual surround technology.
Pioneer hopes to expand the market's potential to consumers turned off by component clutter by expanding its selection of systems that pack all electronics and amplification, save for a small display panel, into a tucked-away subwoofer enclosure. Audiovox's Acoustic Research brand will try to make speakers disappear with home accent pieces, such as wall sconces, that will hide speakers.
Panasonic and LG Electronics want to lower the barrier to buying HTiBs by eliminating the need to run speaker cables from the system's main chassis to the surround speakers. Panasonic will make wireless surrounds either standard or optional in all of its models. LG will offer its first two HTiBs with wireless-surround option.
To expand their utility and appeal, HTiBs will make connections to other types of devices, including Connect-and-Play XM Satellite Radio tuner/antennas. Audiovox, LG and Samsung will show their first such models at prices down to a suggested $249.
Other companies — including JVC, LG and Pioneer — will show their first HTiBs with USB host connectivity to play back music and video stored on USB drives or on USB-equipped media storage devices such as MP3 players. Samsung will expand its selection with USB Host. (See story above for details of the introductions.)
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. (See story on p. 74 for details of the introductions.)
Suppliers of shelf and home theater systems hope these features will make their products more relevant and reverse serious 2005 sales drops. During the first three quarters of 2005, factory-level HTiB sales dropped 23 percent in units and dollars to 2.55 million units and $489.7 million, Consumer Electronics Association statistics show. Compact two-channel system sales fell only 6 percent in units to 4.42 million during that time, but a massive 29 percent in dollars to $430.6 million.