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ProSource Expects Steady Q4, Looks For Positive 2014

Denver – The balance of the year should be at least stable with 2012 levels, if the predictions of A/V specialty dealers, installers and system integrators attending the annual ProSource party at CEDIA Expo 2013 Thursday are any indicator. 9/27/2013 05:54:00 AM Eastern

Denver — The balance of the year should be at least stable with 2012 levels, if the predictions of A/V specialty dealers, installers and system integrators attending the annual ProSource party at CEDIA Expo 2013 Thursday are any indicator.

ProSource, which is a 500-member, $3.1 billion A/V and integration division of the BrandSource buying organization, celebrated a CEDIA Expo that many said appeared to present a rejuvenation in new audio and system integrations technologies that should help dealers drive new growth in the quarter and year ahead.

Dealers attending the reception who were informally polled by TWICE said they expect fourth-quarter business to be steady to up in some category pockets

Dave Workman, ProSource president and CEO, told TWICE: “The overall CE outlook at retail is probably going to be a little bumpy this holiday season. I think we still have some challenges, with the big categories of PC and the swapping of dollars that’s going on between technologies. All of the new introductions in the smartphone category come out now, so that’s going to do well, and it’s going to be a gaming Christmas. The overall numbers, I think, will show well, but it depends on the categories you’re playing in.”

Workman said there are “pockets of audio that are doing extremely well — Bluetooth audio is off the chart, soundbars are off the chart, and legacy audio, for our organization, is holding up very well.”

In video, Workman said the performance of recent introductions of new 4K Ultra High-Definition TV products “is anybody’s guess. A lot of manufacturers are declaring their positions now, so what we see with the promotional roadmaps is going to determine what happens with 4K. I don’t think we’ve seen the last story on that yet.”

Workman speculated that the industry “is motivated to do a setup play this fourth quarter for what will be their 2014 roadmap. They need to get a little momentum going, simply because where I think the industry is struggling is the consumer isn’t paying the premium for features, and they will pay a premium for performance. I think you are going to see an evolution of strategies where manufacturers are going to be taking the premium pieces in 2K and figuring out how to move that into a 4K story for 2014. If that occurs, what we will need is a setup play for the fourth quarter to build a runway into 2014.”

Workman said ProSource dealers will play an important role in providing a educated sale to the consumer.

“We recognize that we are not a volume player — Walmart and others will always have a bigger presence in the market –— but we do premium very well and we do best with emerging technology,” said Workman.

Bjorn Dybdahl, founder of the Texas-based Bjorn’s A/V specialty chain, said Ultra HD and new OLED TV introductions show promise — particularly the 4K Ultra HDTV products.

Regarding Samsung’s recent launch of an OLED TV (Bjorn’s is not an LG dealer) Dybdahl said, “I think people are looking at the price, period, and it’s discouraging to me because it’s worth the nine grand, but with the prices that are coming in now on some new 4K products..” people are holding off to see where the prices settle.

As for the fourth quarter, Dybdahl said Bjorn’s expects flat results compared with 2012.

“We’ll be OK,” he said. “I don’t think we are going to see sales go down. The [unilateral pricing policy] obviously helps. Sony’s SURE program helps. We can compete on an even footing with everybody else, so I think we are going to have an OK quarter.”

Dybdahl lauded Sony for its recent aggressive market posture that has supported smaller A/V specialty dealers.

“[Sony has] been a great supporter of us,” Dybdahl said, adding that Bjorn’s will have a launch event for Sony’s new TV products on Oct. 16.

As for the old TV technology favorite — plasma — Dybdahl said he still loves it and the value it offers the consumer, but he has been discouraged by Panasonic’s recent moves to cut down its direct distribution to smaller retailers. This is forcing Bjorn’s and other A/V specialists of that size to buy Panasonic-branded products through distributors, “so you can’t make money on it,” he said, adding that he continues to carry Panasonic’s products to serve his clientele.

Alan Guyes, Roanoke, Va.-based A/V installer Audiotronics A/V buyer and corporate secretary, said, “Business has been very good, particularly the custom integration portion of our business. It’s roared back to life. We are doing a lot of housing starts for 8,000-square foot and larger homes. A lot the commercial guys that have put projects off for years, are now spending money again.”

Guyes added: “The brick-and-mortar portion of our business is also doing well. We are an Apple reseller and that brings people in and sells itself. It’s hard to get excited about televisions anymore, but 4K may hold promise. Customers aren’t biting on it yet, but they get it. I think they are so conditioned now on waiting for prices to drop, but they are interested. Customers are coming into stores looking at it and talking about it. I think next year is going to be the year for 4K.”