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DVD-HTiB Success Forcing Suppliers To Switch Strategies

Like NASDAQ in 2000, the home-theater-in-a-box (HTiB) business in 2001 soared to unprecedented heights, prompting suppliers at CES to enter the market, expand their HTiB selections, or eliminate home theater shelf systems from their assortments.

Many audio and video suppliers, acknowledging the accelerating growth rates of DVD-equipped HTiBs, plan to launch their first models or broaden their selections, either with integrated DVD-receivers or with separate DVD players and receivers.

Audio suppliers, however, won’t forget their component roots at the show, where they’ll introduce new technologies even though component sales last year were clobbered by the recession and by growing demand for simple-to-buy (and sometimes simple-to-use) HTiB solutions.

Two-channel aficionados will also get their due at CES from suppliers who plan to step up the audio quality of mini and microsystems or unveil stereo components that have been updated with new digital-age capabilities, even if some of them still use tubes.

Largely because of HTiB’s success, suppliers will continue at CES to scale back their selection of home theater shelf systems, whose sales fell in 2001. Aiwa and Philips, for example, will drop them from their 2002 lines; Aiwa will also drop DVD-equipped shelf systems.

Those companies and others will concentrate their shelf-system efforts on the two-channel customer by delivering higher power models with improved audio performance and, in many cases, eye-appealing designs once reserved for such fashion-forward suppliers as Bang & Olufsen.

Besides taking the wind out of home theater shelf systems, HTiBs have yielded mixed results for component-audio suppliers and retailers. Although HTIB’s have attracted a broader customer base to the home theater market, many hi-fi suppliers and regional specialists lament that purchasers of high-quality DTVs are opting to buy convenient but lower performance, lower cost HTiBs instead of higher cost component audio products.

Component suppliers, however, will nonetheless move ahead to give consumers compelling reasons to step up from low-cost HTiB solutions to separate components or to high-quality HTiB solutions, the latter for performance-oriented consumers who are just as interested in convenience and simplicity as mass-market customers.

In HTiB solutions, dealers will find:

  • a growing selection of DVD-equipped HTiB systems. Companies such as Audiovox, GPX, Panasonic, RCA, and Yamaha will expand their selections, and Philips will outline second-half plans to do so. Toshiba, Samsung and Zenith will unveil their first.
  • more companies integrating DVD players and changers into receivers instead of packaging a separate receiver and separate DVD player. Yamaha will offer its first such integrated system part of a significant expansion of its DVD-equipped HTiB selection. Audiovox will expand its selection. And Toshiba, Samsung and Zenith plan to show their first DVD-receiver-based HTiBs.
  • The first HTiBs equipped with DVD-Audio/Video players and changers. The DVD-A/V models are from Panasonic (at least five SKUs, possibly eight), Yamaha (four priced up to a suggested $1,699), and Samsung (with two).
  • Sony already markets SACD-equipped HTiBs, and Philips says it will enter that market sometime in 2002 but not at CES.
  • The first DVD HTiBs with progressive-component video outputs. They’re from RCA, Panasonic, and Yamaha.

In component audio, dealers will find:

  • the first receivers and processors featuring Dolby Digital EX decoding licensed from Dolby Labs. They include models from Atlantic Technology, Pioneer, Rotel, and Yamaha.
  • a greater selection of THX Ultra2-certified products. Aragon and Denon will show their first products, joining Pioneer in this segment.
  • more receivers that deliver a phantom rear-center channel. They’re from Pioneer and Yamaha.
  • more receivers with 5.1-channel DTS 96/24 audio decoding for DVD-Video discs and for the video zone of DVD-Audio discs. Yamaha will show its first such receiver, and Denon will add a second.