Good 2nd Half For CE Is Expected

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Based on what you have heard from retailers, manufacturers and seen from your own business, what does second half demand look like?

Jerry Satoren, DSI Systems:

Second half demand will be enormous for tablets and while these will be low profit sales, they will create a huge appetite for very profitable tablet accessories.

I also believe that we will see huge demand for 55-inch and larger flat panel TVs. In particular the 60-inch and up LED segment will hit retail price points that will drive consumers to consider replacing their first flat panel.

For many consumers that purchase is still the main TV in the home and was an expensive 42- or 50-incher. I believe that this sweet spot of size and affordability will make this segment extremely active and the number one profit driver for the second half of the year.

Fred Towns, New Age Electronics:

Customers will be there to buy for the holidays. They are far more educated and familiar with newer technologies. There may be some concern and confusion with the different operating systems, but retailers are gearing up to address that situation. Categorywise, it is going to be a tablet-centric Christmas. Retailers will need to be prepared to offer the right accessories for consumers, like cases, memory and storage, to personalize their tablets to their lifestyle.

Michael Flink, ADI Americas:

In the second half of the year we are expecting moderate growth. Categories related to 3D content will continue to create interest and drive volume, and profits will be primarily driven by accessory products and add on technology. Dealers who upsell and cross sell to provide a complete solution, will continue to be successful.

Jim Annes, AVAD:

Second half demand is predicted to be stronger than the first half of the year as the economy continues to improve and consumer confidence grows. We are looking to accelerate our success in Q1 over the entire year and video, control, accessories and audio all look strong. There are likely some disruptive events and technologies entering the market around Q4 this year, so the items that drive both revenue and profit may change before we ring in 2012.

Ron Eby, D&H Distributing:

Volume will be driven by TV sales, and we expect growth in Internet-connected devices including IPTVs. Of course, we can’t leave out growth in the tablet space, since a list of new models is set to launch. Demand in this area and the overall mobile marketplace is expected to persist. Profits will be driven by accessories. The margins on accessories have always been key in increasing profitability, which is why we’ve been training our dealers to think in terms of add-on accessory sales in all categories. It’s a smart yet simple strategy.

Brent McCarty, Ingram Micro Consumer Electronics:

In the second half of the year we expect significant revenue pick up as a result of our exclusive Onstar relationship. We have opened many new customers and there is a significant demand forecast for their FMV (For My Vehicle) product which brings Onstar services to non GM vehicles. The product will start shipping for us in June and July with a soft launch at retail in July and a full marketing support commencing in August.

Other than that we are seeing the shift from brick and mortar to .com which is helpful for our business as we are very efficient in supporting .com through expanding product selection utilizing our 1,200 vendors and by simplifying the logistics process. We see this as a big opportunity and really want to help our brick and mortar retailers enhance their .com capabilities.

Dennis Holzer, Powerhouse:

We expect our business in the second half to continue to grow. We anticipate video to continue to drive the volume as it has with larger TV sizes – 60- to 70- inches - to both add volume and better profits. Audio has significantly increased from where it was, and we expect that trend to also continue.

Connectivity devices within the home will continue to be at the forefront of sales and profits. Look for home automation, lighting, security, iPad and like devices to provide the greatest opportunity for sales and increased profits.

We are moving into a period of time where new technologies will offer many more selling/profit opportunities than we have had in some time, with some providing reoccurring revenue streams to the dealers.

Mark Gustavson, Wynit:

We remain optimistic for a strong back half of 2011. The demand for tablet devices, especially those that operate on multiple platforms, will drive both volume and profits. Additional profit drivers include storage, connectivity, and accessories.

Bill Stewart, Petra Industries:

We have seen a very positive trend in our business so far this year, and we remain very hopeful that this continues as our economy continues to recover. Apple, cellular, and tablets will all be extremely popular categories, but regardless of category, we will remain focused on providing the largest and best assortment of accessories that a retailer can attach to any hardware purchase. Undoubtedly, add-on accessories will continue to drive business for our dealers, and as always, we are committed to finding the best brands at the lowest prices.

Warren Chaiken, Almo:

Sales are still being dictated by the state of the economy, and currently it is not strong enough to generate the level of consumer confidence that would spur sales organically. his means that manufacturers will need to create that demand through pricing, however it remains to be seen what the Manufacturers appetite for doing this will be, given the increase in commodity prices. Therefore, yes it could be a tough second quarter.


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