Sales Growth Expected



How did component-audio sales fare at the retail level in 2011? What’s the outlook for 2012?

Russ Johnston, Pioneer:

In 2010, A/V receivers came off a tremendous year, growing 14 percent in units, a level that eclipsed 2008 levels. So far through September 2011, we are realizing growth again at a level of 9 percent year to date. 2010 was a banner year because of the influx of new technology such as HDMI 1.4a, which was essential, as was 3D and iPhone connectivity and Ethernet-connected services.

For 2011, most of the growth is coming from price points under $600 from the trickle-down of technology and the new functionality of AirPlay. The over-$600 receiver market was down 3 percent in 2010 and is tracking down this year again by12 percent year-to-date. The main cause of this is economic pressure on the consumer and the retail community. Traditional brickand- mortar is still tightening. Pioneer has lost Ultimate Electronics and now Sixth Ave., both of which were significant players in the specialty channel.

Tim Bailey, D&M:

We are pleased to report that the D&M brands fared quite well in 2011 despite significant challenges faced by the industry, including the general state of the global economy and the slowdown in manufacturing due to the earthquake in Japan.

Both retail and online sales increased year over year in a majority of key categories, including component audio, which was up substantially. We were especially heartened by the uptick in the custom-installation business, particularly for the Denon and Marantz brands, as well as the growing strength of online sales across all D&M brands.

With so many factors in play, it’s difficult to make predictions about 2012. However, we expect that the D&M brands will continue to buck the trend and grow with strong feature sets and new product categories. Still, based on the fragility of the economic resurgence, we all have our work cut out for us.

Steve Feinstein, Atlantic Technology:

Component sales in 2011 were down slightly from 2010. This is attributable, in our view, to the still-sluggish economy that has limited discretionary non-essential purchases in all categories (not just electronics), and also to the diminishing number of specialty electronics retailers who have meaningful demonstration capabilities.

Our industry — quality audio— depends on the ability of consumers to be able to hear and understand the differences and advantages of good equipment. The national “big box” retail stores have very limited demonstration capability and a salesforce that isn’t trained to explain subtle differences in audio equipment design. Customers are pretty much on their own when it comes to trying to figure out the differences/advantages of one brand over another, and this negatively impacts our industry.

Doug Henderson, The B&W Group:

We saw solid growth from 2010 levels. Our growth was driven by new products, distribution changes and market-share gains. That said, we believe the overall business environment remains very challenging. We expect to continue to see moderate to strong growth in 2012.

Paul Wasek, Onkyo:

Sales of component audio were strong in 2011 in both units and dollars compared to 2010. A slight rebound in the economy helped, but we believe a major factor was the consumer looking to upgrade their audio to be more in-line with the video in their home. We’re optimistic that an improved economy will help keep component-audio sales strong for 2012.


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