Three companies went to the recent CEDIA Expo with more than new products in tow: Speaker supplier MB Quart arrived with a new marketing strategy, Elan Home Systems arrived with new ownership, and Custom Command Systems came with more bucks, thanks to its acquisition by a venture capital company.
MB Quart’s new strategy hinges on the introduction of the company’s first line designed specifically for the U.S. and shifting production to North America from Germany to improve price competitiveness.
President Andy Oxenhorn called the resulting eight-speaker Domain line “an IKEA line” because of its “aesthetic appeal, good quality, and low cost.”
The line, which ships in October, is up to a third less expensive than previous Quart lines; the previous line started at $699 per pair, the new line starts out at $299.
If made in Germany, Oxenhorn pointed out, the new $599-per-pair D40 bookshelf would have cost $900 because of higher labor costs, the strong German mark, freight costs, and duties. Domain’s drivers, however, are still made in Germany by MB Quart.
Domain additions are in the works.
“We were taking what was suitable for the German market and trying to sell it in the U.S.,” Oxenhorn admitted. Previous lines “were not quite right for the market, although they sounded good and had gorgeous cabinets.” Home theater, he pointed out, “hasn’t caught on in Europe, and custom installation doesn’t exist there.”
The new line includes five shelf- and tower-speaker pairs priced from $299 to $899, a pair of semicircular wall-mount surrounds at $399, a $399 center channel, and a 100-watt powered subwoofer at $649. Quart is also packaging various models into complete home theater systems at a discount to consumers and a better margin for dealers.
One unusual feature, user-replaceable front frames, gives consumers the flexibility of selecting frames or tops that match their decor. The frames fit the left-right speakers and are available in 10 custom finishes and a paintable unfinished version.
A choice of frames is included in the suggested retail price, and additional frames are priced from $49 to $119 per pair. Replaceable $49 tops for the subwoofer and center channel are also available.
The frames and tops are made of a man-made laminate that “on close inspection, appears to be wood,” Oxenhorn noted.
In a change involving ownership rather than marketing plans, Square D’s Elan business unit was purchased by Elan managers and the investment company Montgomery Shelton. Square D is the $1.5 billion maker of power distribution systems for residential, industrial and commercial buildings.
Elan was a Square D business unit founded five years ago to design and market AV/telephone distribution systems, which start as low as $6,000 installed, and in-wall speakers.
“We’re going to realize a significant increase in operational efficiencies from the outset, so we feel confident that our customers will find the new Elan much easier to do business with,” said Elan president Bob Farinelli, previously the business unit’s chief technical officer.
“Core” staff members from the customer service, product development, and sales and marketing departments have been retained, he added.
Elan’s priority is to consolidate functions in one facility in Lexington, Ky. But before the end of the year, Elan will introduce improvements to its two custom-install systems, Farinelli said.
Another company, Custom Command Systems of Fort Lauderdale, Fla., also came to the show with a new owner: Interactive Media Systems, a new company that received a capital infusion from Technology Leaders II, a $113 million venture capital fund.
Custom provides systems-integration products that link audio/video, lighting, security, environmental and other systems to touchscreen controllers that also respond to voice commands or commands entered into a telephone keypad from a remote location.
CEDIA Sets Date For 1st 5-Year Plan
CEDIA’s board of directors and management will meet in October to develop the association’s first five-year plan, which is expected to include goals for promoting systems-integration standards and for bolstering a regional seminar program.
The Custom Electronic Design & Installation Association, which has operated under two-year plans, cited several other goals that it will consider. One is establishing an installer and designer certification program. Another is establishing a resource on proposed changes in state and local installation regulations.
For the short term, CEDIA’s plans include expanding the number of regional seminars in 1996 to six from five and the January release of a Frost & Sullivan study that will quantify the size of the custom-install industry.
Also, the association’s Home Entertainment Council plans early next year to release a complete update of its home theater manual, a reference guide that helps dealers design and install home theater systems.
As for its five-year plan, CEDIA will consider the development of systems-integration “standards of all types,” treasurer Mitchell Klein said. They could include standardized blueprint icons for use “across many industries” and promoting “interoperability” among products from various industries.
CEDIA wants to “make products more installation and communications friendly” by encouraging standards, he said. Rather than endorsing a standard communications protocol, however, the association would look for ways to “promote interoperability between standards.”
Limited Distribution Planned For Lifestyle 20
Bose said it will limit the distribution of the new $2,500 Lifestyle 20 music system, its most expensive system to date, to reflect the product’s price and sophistication.
The 200-watt system, Bose’s first changer-equipped model, is available only to dealers “with a willingness to demonstrate it effectively,” said Darrell West, group product manager.
Out of 4,400 storefronts in Bose’s dealer base, about 600 will sell the system, he said. In contrast, about 1,500 storefronts carry Bose’s other Lifestyle systems, which range in retail price from $1,100 to $1,500 for stereo models to $2,200 for the Lifestyle 12 home theater system, which includes a surround processor.
Distribution could be expanded to other Lifestyle retailers “as the stores get more prepared” to make the demonstration commitment, West added. The 600 storefronts will include stores from “one to two” national accounts but not every store operated by those accounts.
Lifestyle 20, whose cube-shaped satellite speakers are Bose’s smallest at 4.5×2.25×3.25 inches, will be promoted through buff-book advertising, but the company also plans advertising in shelter books and news-weeklies. West noted that “we’re expanding our budget to do more in the non-buff books.”
Bose will incorporate the system’s Jewel Cube small-speaker design in a home theater package “sometime next year,” added marketing director Doug Landfield.
The Jewel Cube models are less than half the size of Bose’s other Lifestyle system speakers, thanks to the use of small neodymium magnets and a dual-chamber, dual-port porting system that includes a nautilus-shaped rear port. The six-disc magazine changer was downsized to fit into the system’s low-profile chassis in part by designing a mechanism that enables discs to be read when they’re only halfway out of their magazine.
MB Quart’s Domain line, the company’s first North American-made line, is priced up to 30% less than previous lines.
The Lifestyle 20 is Bose’s first changer-equipped system.