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D&H Distributing predicts that industry sales will be driven this year by mass adoption of newer formats like HD DVD and Blu-ray and the increasing affordability of popular products like LCD panels.
The distributor of CE and computer products is basing its predictions on areas where it saw strong sales growth in 2006. D&H cited as an example a recent adjustment of Blu-ray pricing which it said resulted in an approximate 85 percent spike in sales of Blu-ray hardware.
According to the company, gaming products saw the most growth in 2006, with a 61 percent increase. Other categories with significant growth last year included distributed audio, LCD displays, home surveillance, vehicle navigation and portable entertainment devices.
"This year has had some surprises. DLP technology didn't perform as first predicted, while LCDs surpassed just about everyone's expectations and has raced ahead in sales," said Michael Schwab, purchasing VP at D&H. "LCD models have become more sophisticated in their designs, as opposed to just a flat box for the living room, making them an aesthetic winner for consumers who are looking to implement the digital lifestyle we've been touting. That trend-conscious, upscale customer base is just what our dealers, integrators and retailers should be targeting in order to truly take advantage of the current market."
As for the future, D&H expects the growing popularity of wireless connectivity to continue and it expects consumers to increasingly demand home media server capabilities in the wake of the launch of Microsoft Vista with Windows Media Center functionality.
"As high-def content becomes more ubiquitous, the next question is: How do consumers distribute it throughout the various settings of their lifestyle? Enthusiasts want to manipulate this media so that it's accessible from multiple points, ranging from the interior of the home, to the car or even to the hands of a friend they want to share files with," said Schwab. "This represents the next layer of value our dealers and integrators can apply to the consumer's environment. When technologies continue to provide interoperability between different entertainment devices, consumers will reap the benefits of a totally seamless digital experience."
In other news, the 85-year-old distributor has signed agreements with more than 35 new manufacturer partners in the past four months as part of an ongoing effort to increase its offerings for its customer base of dealers, integrators, retailers and resellers.
"D&H is constantly in negotiations with new partners whose technologies will further our value proposition," said Rob Eby, D&H's purchasing director. "It's never enough to be satisfied with the status quo — we want to offer a selection that continues to improve, delivering new opportunities and revenues to our customers."
Some of D&H's new partners include WiEx, maker of the zBoost cellphone signal booster; Wherify, maker of the Wheriphone GPS locator phone; WiLife, maker of the PC-based LukWerks Video Security System; and Auvi, maker of hardware for Skype and SIPTalk Internet phone services.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.