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Boston Acoustics Seeks Growth Despite Slow Industry

Although its home-speaker sales were flat to slightly down through June, Boston Acoustics hopes to boost volume during the remainder of the year with the shipment of multiple new products, marketing VP Martin Harding told TWICE.

The products include the brand’s two highest priced tower speakers in years, two new home theater speaker systems, and the previously announced co-branded Kenwood/Boston home theater solutions with DVD-receiver.

Also expected to accelerate second-half sales:

  • the company’s first multipurpose wall-mount speaker, which can be mounted in a corner at ceiling height or flat against a wall;
  • June shipments of the up-market VRi custom series, priced from a suggested $700-$1,800/pair and originally targeted to ship in February (TWICE, Sept. 4, p. 54);
  • the revamped Compact Reference (CR) bookshelf series, introduced at CES (TWICE, Jan. 6, p. 101) with four SKUs versus the previous six at prices starting at $149/pair. They shipped in recent weeks;
  • and new multimedia speakers, due in September.
  • The company’s net sales for the fourth quarter ending March were off 1 percent to $26.6 million, with a net loss of $1.3 million. Net sales for the fiscal year, however, were up 9 percent to $117.7 million, with net income of $3.9 million, down 41 percent.

The company attributed the Q1 decline to the slowing economy and industry-wide sluggishness in home, car and multimedia speaker sales.

Although it can’t turn around the economy, Boston plans to stimulate demand for its products with such introductions as the first towers in its top-end VR-M series. At a suggested $1,999 and $2,699 per pair, the VRM-80 and VRM-90 mark the company’s return to price points abandoned several years ago when it phased out the Lynnfield series. Before the VR-M arrivals, the company’s towers topped out at $1,699/pair in the VR series. “Lynnfield went farther up-market than retailers wanted, but the market has changed since then, and our home audio retailers [regional specialists] have gone upmarket,” Harding said, “to distance themselves from Circuit City and Best Buy.”

The VR-M towers join VR-M series bookshelf and surround speakers, a center channel, and a powered sub, available for a year.

In home theater speaker systems, the company plans July shipments of the System 9000 Mark II and the System 7500, both with small aluminum satellite enclosures and powered sub. In replacing the System 9000, the Mark II will feature direct-radiating surround speakers instead of bipolar surrounds, use a more powerful subwoofer with higher power amp at 125 watts, and maintain the 9000’s $999-MAP, Harding said.

The 7500 will expand the company’s home theater speaker package selection to two and, at a suggested $1,499 MAP, target a price range ignored by most suppliers, Harding said. “Everyone does below-$1,000 packages,” he said. It also uses direct-radiating surround speakers, reflecting what Harding said is a move by suppliers to direct-radiating surrounds because discrete five-channel surround processing has become firmly entrenched in homes. Compared to the Mark II, it uses aluminum enclosures for all satellites, not just the front satellites, and a higher power sub at 300 watts.

With consumers more willing to buy home theater packages, with or without electronics, Boston is considering a Boston-branded electronics/speaker packages to complement a co-branded Kenwood/Boston electronics/speaker package, which is due in October at $1,000 MAP. It’s “very likely,” he said without outlined availability.

In the meantime, Boston will market the co-branded system to its home audio dealers, and Kenwood will market the system to non-Boston dealers with Boston’s approval. In both cases, Kenwood will ship the product and send an invoice to the retailer. Boston will then invoice Kenwood, Harding said.

Kenwood and Boston don’t share many home audio retailers, he noted.

In a new market segment for Boston, the company plans July shipments of the $199-each Bravo multipurpose speaker. The two-way speaker uses through-the-baffle mounting screws to allow for corner mounting that leaves no gap between the ceiling and the top of the speaker. Because of its flat back, it can also be mounted anywhere on a wall, allowing for center-channel use. Because of their shallow depth, they aren’t magnetically shielded.

In September, new multimedia speakers priced from $49-$199 MAP. Their distribution includes Circuit City and Best Buy.

In other matters, Harding said:

  • Plans for a co-branded Sonicblue/ Boston MP3 boombox are still in the works but later than originally planned. Boston shipped the device’s speakers to Sonicblue, which originally intended Christmas 2000 shipments. A spokeswoman for Sonicblue [formerly S3] declined to comment on plans for the product. “It hasn’t been announced,” she said. By announced, she said she meant shipping.
    The delay may have been caused by Sonicblue’s recent focus on acquiring Sensory Science and Replay TV and the company’s $38.3 million net loss in the quarter ending March 31.
  • Flat-panel SST (Slimline Speaker Technology) speakers, which debuted last year in a multimedia speaker system, won’t make it to home or car speakers. The company had hoped to deliver SST home and car products last year. “As the drivers got bigger, they got more expensive to build, and the performance was no better than small-size traditional drivers,” Harding said. The technology, nonetheless, will appear in new multimedia speakers.