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Dealers Say Installation, Service Are Next ‘Hit Products’

As the current generation of popular CE products saturates the marketplace and sales growth begins to wane, the next major growth opportunity for dealers, installers and integrators will be in making all of those devices work in harmony for broader swaths of the population.

Best Buy anticipated the trend years ago with its acquisition of Geek Squad, while more recently its Magnolia Audio Video subsidiary has been remodeling and downsizing its stores as it moves from a retail model to that of a service-oriented provider of whole-house systems.

Another sign of the times was last year’s declaration by Richard Glikes, executive director of Home Theater Specialists of America (HTSA), that video is “not that important” to the buying group’s members, compared to lighting, systems design and whole-home control.

“We need to deliver on the promise of what people already bought,” observed Dave Workman, executive director of Progressive Retailers Organization (PRO) Group. “Bringing out the full capability of all those TV sets that were sold, and creating satisfaction by delivering convenience, control and content, creates a solution for products that have become commoditized.”

Building that “ecosystem” requires “a whole new skill set and group of products” that, unlike most CE devices, is resistant to price compression, he said.

What form will those solutions favor this year? Dan Schwab, marketing VP at D&H Distributing, sees the tide turning more and more toward IP-based control systems that can download and store content on home servers for delivery throughout the house and beyond. “The media PC/server has taken its place as the hub for the digital entertainment center in the home and the small office/home office, centralizing functions that include media storage, distributed audio controls and home automation,” he said. Models such as Hewlett-Packard’s EX470 MediaSmart home server, for example, feature multiple, scalable hard drives; can centralize different PCs throughout the home; and can provide remote access to the users digital libraries, he noted.

Tom Galanis, operations VP at Sixth Avenue Electronics, agreed. “For $12 a year HP provides a service that tracks your IP address, which allows you to access your files from anywhere in the world, or have your car show up as a drive. Rather than ripping and storing CDs in multiple locations, all of your content sits on a media server.”

Security-consciousness and fuel efficiency are also driving the IP approach, Galanis said, as Web cams allow homeowners and parents to monitor their houses and nurseries remotely, or adjust temperature by controlling their thermostats off-site.

“Everything can be networked — your home, your car, your office — and data can be moved freely to a mobile phone,” he said. What’s more, the technology will make these capabilities accessible to larger segments of the population, fueling additional demand for networking and configuration services.

In anticipation, PRO Group’s Workman believes dealers should open up their service offerings to customers who may have purchased their hardware elsewhere. “You don’t have to connect on the front end,” he argued. “Dealers have to be more than transactional. You can grow your business if you fully undertand the service solution model.”