NEW YORK — A modest recovery has taken hold in sales of iPod/iPhonedocking speaker systems, boosting dollar volume for the year to date following last year’s dollar decline, marketers told TWICE.
They expect the rebound to continue as an improving economy and secondtime purchases encourage step-up sales and as suppliers launch iPad-docking speaker systems to the market in the second half.
The growth is welcoming to suppliers, including Philips Consumer Lifestyles, Eton, and Spectra Merchandising — that have launched or plan to launch new products and to companies such as Edifier, which is entering the U.S. market for the first time.
NPD Group statistics show dockingspeaker sales rising at 8 percent in both units and dollars during the first four months of the year, an improvement from last year when dollar sales fell despite rising unit sales, marketers said.
During the past six months, unit and dollar volume have been rising, whereas dollar volume fell through late last year despite rising unit sales as consumers traded down during the recession and retailers trimmed prices, said Roy Carpenter, customer marketing director for Philips Consumer Lifestyles.
Philips forecasts an industrywide 5- percent gain in dollar volume in 2010 and a unit-sales gain of 10 percent at the retail level, in part due to household penetration rate expected to grow to 35 percent by the end of 2010, up from 28 percent at the end of 2009.
In last half of 2009, about 45 percent of buyers were repeat buyers, he noted, and current owners of lower price models are trading up, encouraging Philips to launch a Fidelio series of speaker docks focused to a greater degree on audio fidelity and priced up to a suggested $499.
Bernice Cramer, Altec Lansing’s marketing and product management senior VP, has also seen consumers stepping up, although many are still focused on low-priced models because of the nation’s economic turmoil.
“We have seen a modest recovery from last year with unit and dollar sales both up in the mid to high single digits,” Cramer said. That’s due in part to what she called a “mild recovery of sales in the higher price bands.” Nonetheless, she said, like other CE product sales, iPod-speaker sales have been influenced simultaneously by “higher sales of more expensive items” on the one hand and simultaneous “price erosion and the strengthening of some lower ASPs” on the other hand. “The dual trends, she explained, reflect “the cautious return of higher income or higher disposable income shoppers” as well as “frugal and battered consumers in the broader market.”
Demand for speakers certified as Works with iPhone is also driving sales, given rising iPhone penetration, she said.
Penetration of speaker systems certified as Works with iPhone will continue to rise, added Spectra Merchandising marketing VP Kirk Lamb, because “as of April 15, all new docking speaker systems can apply for Apple’s approval only if they include Works with iPhone.” Existing iPod speakers previously approved as Made for iPod “can still be produced and sold, but certainly we will see a phase-down of this basic category in the coming year,” he said.
The iPod/iPhone speaker market, he said, has certainly reached maturity, and “the growth that was being seen in the category several years ago is simply not there, but the overall continued popularity of the iPod, and more recently the iPhone, continue to keep this important category very much alive.”
The market, he contended, “remains strong for models where innovation and special features are being delivered to the consumer as part of the overall package. Strong design elements are also keeping the market alive and inciting renewed interest in the category for consumers who are open to replacing an existing speaker system with something fresh and new or that offers a step-up in quality.”
Something fresh includes a growing number of iPod/iPhone speaker systems that accept free downloadable apps to add additional speaker-system functions when loaded onto a docked iPhone or iPod Touch. “The features that these apps bring to the category are opening up a whole new experience for the consumer,” he said. They include clock radio functions, custom EQ settings, and in the case of a Spectraplanned iPad app, access to a subscription-based music service that gives users Internet-streaming access to their music collections.
The launch of the first iPad speaker docks will also stimulate the market, but Altec Lansing’s Cramer expects a surge in products to occur late in the year or early next.
Because the iPad features “a different form factor with different use case than just the iPod, though there is natural overlap, we are working on new solutions to enhance the experience for sound and other functionality,” Cramer continued.
One challenge is not to design a product that works with the iPad’s tabletstyle form factor, but another is to design a 30-pin connector compatible not just with the iPad but also with the iPod and iPhone.”It’s not as simple as you might think for one dock to do the job of three,” she noted. “You have to manage both the physical differences — you don’t want the iPad to cover the drivers — as well as the electrical differences.” A docking speaker, she noted, won’t charge an iPad unless it’s designed for the iPad.
The minimum requirement for charging an iPod/iPhone is 1 amp, and for the iPad, it’s 2.1 amps, Spectra Merchandising told TWICE. The audio and composite- video pins for iPod, iPhone and iPad are the same, the company added.
However long it takes for the expected surge in iPad speaker systems to arrive, Spectra’s Lamb said “the accessory market for the iPad, including speaker systems, should continue to add fuel to the iPod/iPhone/iPad accessory fire.”