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Audio System Suppliers Tap New Sources

A growing selection of compact shelf systems and home theater in a box (HTiB) systems unveiled at International CES connect to a new generation of music sources, including iPods, Bluetooth-equipped cellphones and USB flash-memory drives.

Dealers also found more HTiBs whose industrial designs complement flat-panel TVs and incorporate virtual-surround technologies, which eliminate aesthetic objections to cluttering a room with five to seven speakers.

iPod-docking HTiBs and compact systems, however, clearly made the most impact at the show as suppliers acknowledged the influence of the iPod on music-listening habits and eyed surging sales of dedicated iPod speaker systems.

Sales of iPod-docking speaker systems and clock radios rose an estimated 44.5 percent at the factory level to $867 million in 2007, according to the Consumer Electronics Association’s (CEA) latest estimate. CEA’s latest 2008 forecast called for a 27.7 percent rise to $1.11 billion, which almost matched CEA’s $1.22 million forecast for combined 2008 sales of HTiBs and compact stereos.

HTiB sales popped in 2007, rising an estimated 14.2 percent to $901 million compared to a previous CEA forecast calling for a 7.6 percent drop. CEA estimated compact sales fell 20.4 percent in 2007 to $387 million, which is in line with the association’s previous forecast issued in June. Compact sales will decline 16.8 percent to $322 million in 2008, CEA forecasted.

Besides plopping a dock onto their audio systems, suppliers also sought at CES to stimulate compact sales and maintain HTiB momentum by unveiling a greater selection of sound-bar-type HTiBs. These systems are built around a single-enclosure speaker system designed to complement flat-panel displays and deliver virtual five-channel sound.

The sound-bar-style HTiBs incorporate speakers and amplifiers, and most add 5.1-channel virtual-surround technologies. Some add embedded DVD players to deliver all of the components of a home theater system but the display.

In virtual-surround sound-bar systems, Philips expanded its selection (see p. 86), and Samsung launched its first. Polk showed its first powered surround-bar HTiB, joining a pair of passive models that lack amplification and video sources.

Audio-enhancing products for flat-panel TVs are needed, audio suppliers contend, because a greater percentage of the bill of materials (BOM) in a flat-panel TV is tied up in video-related components compared to the BOM percentage tied up in video components in a CRT TV. As a result, TV makers skimp on a flat-panel’s audio performance.

Ever-thinner flat-panel displays are also thinning out the sound of the displays’ speakers, further increasing the potential for add-on sound systems, suppliers added. (See stories on this page and on p. 84, 86 and 88 for details on specific products introduced at the show.)