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Challenging Q4 Seen, But There Are Opportunities


What will fourth-quarter sales be like in
consumer electronics? What will drive sales? How
will it compare with last year?

Jeff Davis, D&H Distributing:

The fourth quarter
will be challenging in some areas of consumer
electronics. Maintaining inventory will be key, especially
due to a reduction of glass production in reaction
to the Japanese natural disasters, which may
affect tablets, monitors and/or displays.

Black Friday and Cyber Monday are such notable
pre-holiday sales occasions, it will help retailers and
e-tailers drive sales with bigger and better specials
than ever. This year will see week- and month-long
Black Friday offers.

Our expectation is that, overall, the season will be
as good if not better than last year. Jobs, the budget
deficit and gas prices are still a big concern that
could influence consumer confidence. But consider
that consumers have lower credit card debt right
now than they have carried in years, a dynamic that
developed in reaction to the recession. We think
that could lead consumers to spend for the holidays.

Warren Chaiken, Almo:

Business is going to
be challenging in Q4. The economy continues to
struggle, consumer confidence remains low, and inventories
from some manufacturers will be conservative
again this year. As consumers look for more
value, high- quality manufacturers will need to come
to market with strong promotional offerings to break
through that barrier. We expect sales to be flat to
2010, but if the right vendors get very aggressive,
increases are possible.

Bill Stewart, Petra Industries:

We are optimistic
that the industry will see growth, and think that
portable products such as tablets and smartphones
will continue to be a big driver for fourth quarter. Just
when a consumer thinks he or she has maximized
the potential of a smartphone, a new app or accessory
comes out that opens up a whole new way to
use the device. Our manufacturers are constantly
creating innovative accessories — some even developing
apps to go with them — that give retailers endless
add-on sales opportunities. With the upcoming
release of Apple’s iPhone 5 and the Amazon Fire,
it is clear that this won’t slow down any time soon.

Jerry Satoren, DSI Systems:

I believe that Q4
sales this year will mirror the same choppy pace we
have seen for most of 2011. In TVs, sales will be
driven by extreme values and large screen sizes. Aspirational items like tablets will obviously drive sales
as well. I believe when all is said and done, the
holiday selling season at retail will come in with low
single-digit positive comps.

Fred Towns, New Age Electronics:

sales will probably see single-digit increases.
Retailers will see an influx of customers wanting
tablets and gaming gesture experiences, like those
that Microsoft and Sony offer. As more and more
people have all their entertainment on their mobile devices, they will be moving toward better-grade
headphones to make their experience more enjoyable.

With the decreased price points of TVs and the
still uncertain economy, retailers may see more
families upgrade their TVs to create a more fulfilling
home entertainment environment vs. going on ski
trips during the holidays.

Michael Flink, ADI Americas:

In the custom
install A/V market, we are anticipating mid-singledigit
growth in revenue for the fourth quarter and
approximately 15 percent to 20 percent growth in
units. The business appears to be trending upwards
as consumer confidence continues to improve and
people are spending again. Categories related to
3D content, streaming video and music, as well as
connected and Internet TV will help drive sales.

ADI has made steady business decisions to help
create new growth opportunities for our dealers and
position ourselves for better performance. In early
Q4, ADI will be announcing a new vendor that we
think will drive a lot of demand and boost sales.

Dennis Holzer, PowerHouse Alliance:

We feel
confident with the vendors we have aligned with that
we will have a good fourth quarter. Profitability, because
of certain necessary price points, specifically
in video, will be tight, but if you have the inventory
and are willing to compete for sales, they will be
there. No doubt as an industry, for this fourth quarter
to be successful we have to take risks, be more aggressive
and stayed keyed in to what the consumers
are looking for.

Unlike past years, I think audio will be much
stronger, and speakers will also be strong. iPad will
also continue to be very strong. We finished 2010
strong, and sales for year-to-year comparison will be
stronger in 2011 when finished vs. 2010.

Jeff Kussard, Capitol Sales:

Connected TVs
will drive the display business through the holidays,
but don’t expect to see significant growth over
2010. Overall, the main focus will be on products
with a personal touch. Tablets and other portable
smart devices will be strong, as will the accessories
and peripherals that should accompany every sale.

Tim Coakley, Ingram Micro Consumer Electronics:

The success of fourth-quarter sales
will primarily be driven by three main categories.
Headphones sales are projected to skyrocket due
not only to improved technology but also because
of the increased use of headphones as a fashion
statement. Value-priced flat-panel TVs will also drive
sales, especially in the 60-inch and above category
due to the new affordability of the larger sizes.

Lastly, due to the overwhelming popularity of tablets,
the accessory category will ramp up during the
holiday season, especially in the tablet cases and
chargers category.

Eddie Lageyre, SED International:

We anticipate
Q4 CE sales to bounce back from a soft backto-
school season. Tablets, LED TV and notebook
PCs will drive sales. We anticipate a slight increase
from Q4 2010 holiday sales, hopefully 10 percent
growth but realistically high single-digit growth.