Docking-Speaker Market Adjusts To New OS Realities

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A maturing iPod/iPhone-docking speaker market is prompting suppliers here at International CES to shift gears to accelerate sales.

Many docking-speaker suppliers are adding Apple’s wireless AirPlay technology to spur repeat and step-up sales, and others are adding stereo Bluetooth and MicroUSB charging ports to tabletop speakers to expand the total addressable market to owners of Android, BlackBerry and Windows smartphones.

The iPod/iPhone-docking speaker market struggled to grow in 2011 because of market maturity, iPod sales that are falling as sales of music- storing smartphones rise, and growing iPhone competition from Android-based smartphones, suppliers said. Android smartphones increased their share among smartphones users to 43 percent at the end of the third quarter from the previous quarter’s 39 percent, the latest Nielsen statistics show. Among smartphones users, Apple’s share remained stagnant at 28 percent in the third quarter compared to the second quarter.

Some retailers have scaled back their docking-speaker selections in response to perceived market maturity, added Spectra Merchandising president Patricia Schoenberg, whose company markets Jensen-branding docking speakers.

Through September of 2011, retail-level sales of docking speakers slid 7 percent in units and dollars, mainly due to softness in the clock radio and boombox/radio segments, said Roy Carpenter, Philips Consumer Lifestyle marketing director.

One way to turn things around is to expand the market’s potential customer base, suppliers said. “Historically, iOS devices have driven this market segment, and now over half of the market [for mobile devices] is Android and other smartphone platforms,” said Raleigh Wilson, Altec Lansing’s sales and marketing executive VP.

To fill the void, suppliers here are expanding the industry’s selection of Bluetooth speakers, designed to stream stereo music from any smartphone or tablet equipped with stereo Bluetooth.

Some suppliers — including Philips, iLuv and startup Soundfreaq — are combining stereo Bluetooth with MicroUSB ports that charge non- Apple smartphones while streaming their music via Bluetooth.

Eventually, an expected Android upgrade allowing an Android phone’s audio signal to pass through the phone’s MicroUSB port “could limit the need for Bluetooth connectivity as newer Android devices could dock, play and charge just as Apple products do,” Philips’s Carpenter said.

In the meantime, tabletop speakers that “dock” via wireless Bluetooth or Apple AirPlay will gain traction among consumers who want to keep their smartphones and tablets close at hand while listening to music through a tabletop speaker, suppliers said. AirPlay will also appeal to iPod and iPhone owners who want to stream music to a powered speaker from a networked PC’s iTunes application, they said.

“We expect that as awareness grows, iOS audio accessories will begin to shift to AirPlay, and simple hard-docking speakers will shrink on all but entry-level price points, as consumers look for a charging and listening solution,” said Altec’s Wilson.

To tap into potential demand for new types of docking speakers:

• Klipsch’s Energy brand, Westinghouse, Eton and Spectra’s Jensen brand are launching their first stereo-Bluetooth speakers;

• Pure Audio and VOXX’s Acoustic Research brand are launching their first AirPlay speakers;

• Klipsch and iHome are expanding their Air- Play selection;

• Sharp (see page 17) is launching its first two AirPlay-equipped micro systems, which also feature iPod/iPhone/iPad dock; and

• iLuv is pairing stereo Bluetooth for the first time with a charging MicroUSB port in a speaker system to dock, play and charge smartphones other than iPhones (see p. 4).

In other docking speaker developments, iPad-docking speakers are proliferating as Coby and newcomer Behringer launch their first, Sharp launches its first two iPad-docking microsystems, and Soundfreaq and Spectra’s Jensen brand expand their selections. (See stories on this page and p. 116 for a closer look at what these and other suppliers are launching.)


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