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Tracking Trends: Audio Gear Demand RisingThe trend is clear: more audio gear
One of the things we pride ourselves on here at Kayye Consulting is the ability to track trends. We have a fantastic network of friends in the market who regularly report to us what products they are specifying in systems and selling to clients in system applications. This has allowed us, over the years; to assist our clients in whats happening as the market evolves.
For example, we saw the impact of the iPod on the consumer market as something that would trickle up to the CEDIA (custom-install) market thanks to our relationships with a couple of key HomeAV integration firms. Fortunately, we were in a position to point this out to our HomeAV manufacturer clients, pre-CEDIA, and they all introduced iPod integration tools for the home.
Now, I realize the iPod is not something most of you would see as a high-end home product much less a ProAV piece of gear. But, the proofs in the impact, and the iPod has become the ?must integrate category for the high-end home nowadays (believe it or not).
Well, in recent months, we have noticed a trend in the ProAV market that you should all take note of: audio gear is going up. No, I dont mean in price, I mean in amount of gear specified and, ultimately, sold. And, the numbers arent small. In comparing 40 January 2005 systems designed versus January 2004 (same system applications, side-by-side) the amount of audio gear is up 36%. Thats a staggering increase and all the while video gear is virtually the same (3% increase). Maybe that explains Extrons move into speakers and more audio gear in the past seven months, huh?
In comparing December 2004 with December 2003 and October 2004 and October 2003, the trend is clear more audio gear. In fact, in the past five months, the smallest differential is 29%.
So, is it the impact of the iPod, new technology in microphone design, a killer new app? I actually thought it must have been so until someone at a major ProAV dealership in New Jersey told me that it had nothing to do with technology and more to do with money. Apparently, while video gear and projection technology margins have slipped into virtual oblivion, audio margins have remained where they were in 1996. Ten years later, the margin on audio is virtually identical while in that same period the margin for the average projector has slipped from 32% to, in many cases, less than 10%.
Do you hear what I am saying?
Gary Kayye, CTS is Chief Visionary at Kayye Consulting, Inc., a Chapel Hill, NC-based marketing consulting firm that serves the ProAV and Home Theater markets. In addition to strategic marketing consulting, Kayye Consulting, Inc. is also a training development company. Gary can be reached via e-mail at firstname.lastname@example.org or through his Web site at www.kayye.com.
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