Broad-line consumer electronics manufacturer Coby is using International CES to expand its offerings in CD players, DVD and HTiB and cordless phones, according to VP of sales Richard Goldberg.
The company’s big push in 2003 represents relatively new ground for the manufacturer; with the exception of CD audio, the company made its first intros in the DVD and cordless telephone categories just this past year.
The strongest category for the now 13-year-old Coby in the last year was definitely portable CD players and boom-boxes, Goldberg said, who noted that company factories in China have been firing on all cylinders.
“We now have the production capacity to turn around 500,000 units [portable CD players] a month,” he said.
The company will hit the show floor with five introductions in portable CD players, with suggested retails ranging from $29.95 to $59.95. Products include the CXCD690, an ultra thin personal CD player with remote control and rechargeable batteries. It has a suggested retail of $59.95.
The CXCD740 is the first totally wireless car kit personal CD player. A built-in transmitter sends the music to a preset FM frequency. It carries a suggested retail of $39.95.
While personal CD audio is hot, MP3 is not.
“The MP3 market is soft,” noted Goldberg, who pinned the blame on consumer education, or lack thereof, for the market’s mediocre performance.
“No one has educated the consumer on this product,” Goldberg lamented. “They have no concept of the quality they’re going to get or even how they get the music.”
Nevertheless, Coby will introduce a new player with 128MB of built-in memory along with a flash memory expansion slot, among other new MP3 products at the show.
Moving into the DVD player market was an interesting experience for Coby, Goldberg reflected. The company’s initial offerings included a single 5.1 channel DVD player and a home theater in a box (HTiB). DVD players have been both “wonderful and a nightmare” for Coby, Goldberg said. “We can’t keep them in stock, the demand is so high.”
The downside, Goldberg said, is significant price erosion. To be competitive, he said the company would introduce DVD players in 2003 with suggested retails of $39.99 and $49.99. Coby will also introduce competitively priced HTiB, with suggested retails for a 5.1-channel DVD, five-speaker system hitting $99.99 this year.
At the show the company will introduce the DVD909, a full-featured DVD receiver that is DVD, MP3, CD-R, CD-RW and Dolby compatible with five-speaker surround system plus sub-woofer, 300 watts of power, 50 FM presets and 30 AM presets. It will have a suggested retail price of $199.95.
The company also took its first step into cordless phones in 2002, with one 900MHz analog model and one 2.4GHz analog model. In 2003 the company will expand that by one model in each frequency, with clock radio and integrated answering machine models coming later in the year.
As for the cordless phone market’s health, Goldberg sounded a familiar note to many in the market — it’s flat and price erosion is substantial. But with the absence of Sony, Casio and Toshiba, retailers were clamoring for more brands.
“The retail response has been positive,” Goldberg said.
At the show Coby will introduce the CT-P6000, a 900MHz analog phone with caller ID/call waiting, an 80-name/number memory, 3-line LCD display and a one touch call back feature. The phone is shipping this month but the suggested retail was not available at press time.
The company will also add another model to its 2.4GHz analog lineup, the CT-P7000 with a 20 memory speed dial, page function, auto scan and auto select channel. The model is also shipping in January, suggested retail was not available.
Product packaging has to shoulder much of the sales burden these days, Goldberg noted, saying the company pays close attention to product packaging with its in-house design team.
“You can’t be bland, the box is going to have to grab people’s eye,” he said.
The company owns several factories in China, and boasts of its own R&D and industrial design team.
“We’re as pretty close to a vertical company as you can get in this market,” Goldberg said. “Most of our competitors are pure importers.”
Given the business, Goldberg noted that quality control figures prominently in the company’s to-market strategy. “We have 85 people on staff that do nothing but quality control.” In addition to the internal 85, Coby retains 10 people from a QC inspection firm for independent analysis. Defect rates are among the lowest in the industry at 1.5 percent, Goldberg said.
As to the CE industry’s prospects, Goldberg is bullish.
“People need personal entertainment,” and their disposable income will reflect this inclination, he said. “The business continues to grow, every year.
“DVD has really driven the business, that’s where a lot of the excitement is,” Goldberg said. As for the future, he indicated the company is looking to push into flat screen televisions and portable DVD players/viewers “if we can get the price down.”
“We’re very cautious when we enter a new market,” he said, pointing to the company’s introductory SKUs in phones and DVDs as an indication of how the company would move into new markets.
“We’re also thinking of very low priced, black and white television sets, along a ‘disposable’ model, for the future” he hinted.