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Docking-Speaker Market Making Wireless Shift

1/07/2013 07:00:00 PM Eastern

LAS VEGAS – Sales of tabletop digital-media speakers with wireless Bluetooth and Wi-Fi are on the rise even as tabletop speakers with docking-pin connectors are on the decline.

The reason is the rise of the MP3-playing smartphone, the dominance of Android in the smartphone market, Apple’s promotion of wireless AirPlay, and Apple’s own shift to a new eight-pin Lightning connector, which replaces the 30-pin connector of previous generations of Apple mobile devices, analysts and marketers said.

“While iPod users have traditionally been happy to dock their device when listening to music, smartphone owners generally prefer to keep the device in their hand or pocket,” said Futuresource Consulting analyst Jack Wetherill of the shift to wireless. “Such consumers are now more open to streaming via Bluetooth or Wi-Fi instead of physical docking, although this has the important drawback of draining instead of charging the device.”

As a result, Wetherill said, “consumers will increasingly turn to docks and speakers that can stream – and those that can both stream and offer a physical dock with which to charge – will offer the best allround, flexible option for consumers.”

Although Apple’s shift to the Lightning connector “represents an opportunity to sell a new generation of eight-pin dedicated speaker docks,” Wetherill noted, “the real beneficiaries will be vendors of networked devices that can offer streaming whether via Wi-Fi or Bluetooth.”

Many suppliers agree with that assessment, based on the number of Wi-Fi and Bluetooth-equipped tabletop speakers launching here at International CES. Bluetooth “is a safe option that not only works with iOS units but also works with Android phones/ tablets and other Bluetooth devices,” said Ron Shulda, Spectra Merchandising’s design and product manager.

With that in mind, Futuresource estimates that 24 percent of the 12.9 million speakers with docking pin connectors sold to dealers in 2012 offered the ability to stream via Bluetooth or Wi-Fi, up from 12 percent in 2011. The share of docking speakers with included wireless will grow “rapidly” in 2013, Wetherill said.

Unfortunately, the docking-speaker market as a whole (including docking clock radios but excluding wireless-only speakers), shrank in 2012, according to multiple sources, including Futuresource and NPD.

In the U.S., Futuresource Consulting estimates, 2012 factory shipments of docking speakers in the U.S. slipped 19 percent to 12.9 million units, and factory-level dollar sales fell 16 percent to $1.21 billion. Those numbers include docking clock radios and docking speakers that combine multipin connector with a wireless technology. The statistics exclude wireless-only speakers.

NPD’s statistics show a 6 percent dollar decline and 10 percent unit decline in docking speakers through October, including those that combine docking pins with wireless Wi-Fi or Bluetooth.

When wireless speakers without docking pins are included, however, NPD shows the total digital-media speaker category was up 20 percent in units and 5 percent in dollars.

Toshi Hokari, Imation’s global product management executive director, agreed that harddocking speakers are on the decline. “Wireless speakers such as the TDK Life on Record wireless boombox and XtremeMac Soma BT have seen growth, while harddocking speakers have seen decline,” he said. “We anticipate the same trend to continue in 2013 due to (1) higher penetration of audio content into non-iPhone smartphones, and (2) the use case where people do not want to leave their smartphones hard-docked, unlike MP3 players, with which they were willing to do so.”

Here at CES, some companies are combining connectivity options to offer broad appeal, with new models from LG, iLuv, and NYNE combining Bluetooth and Lightning dock connector.

Also reflecting the shift to wireless at CES, companies such as Braven, iHome, Spectra and Monster are expanding their selection of Bluetooth speakers, iHome is showing its first Bluetooth boombox, and Definitive Technologies and Klipsch are showing their first Bluetooth speakers. Sony is showing its first Bluetooth speakers after an absence of several years.

Voxx’s RCA brand is unveiling a new technology that amplifies smartphone sound without a physical or wireless connection.

Pure Audio, Acoustic Research, Polk Audio and Klipsch are showing Wi-Fi speaker systems. Polk’s first streaming speaker uses Wi-Fi for AirPlay but also features stereo Bluetooth, Apple-certified USB port and wired connectivity to music sources.

Pure’s system streams music via Wi-Fi from Android and Apple mobile devices as well as from PCs.

Klipsch’s Wi-Fi speaker features AirPlay, Wi-Fi streaming from Android devices, and Bluetooth at an expected price in the $2,000 range.

To their Bluetooth speakers, suppliers such as iLuv, LG and Sony are adding nearfield communications (NFC) technology that speeds up initial Bluetooth pairing by enabling users to tap an NFC-equipped smartphone against the speaker.

Suppliers, however, aren’t ignoring the potential for speakers with eight-pin Lightning connectors. iLuv, Spectra, iHome, and Nyne are launching their first Lightning-equipped speakers, joining models from JBL, Bang & Olufsen, Bose and Philips. Sony is expected to join them later in the year.