What They’re Thinking: Jeannette Howe
The housing slump and credit bubble are affecting the industry right now. Installers closely aligned with builders are struggling. There are tremendous slips in pre-wires. The most successful dealers with longevity out there are those with the hybrid mix of custom installations and retail. They are able to fall back on their other talents when one specialty dries up a little bit: when the housing starts are slower, they can fall back on retail traffic. When retail slows, they can promote custom.
What has me most worried about the CE industry? This ridiculous race for market share in the flat panel world. Last year, we saw prices plummet at unprecedented rates. This year we’re going to have more inventory available. The margin hit for a lot of small dealers is really a struggle. The big manufacturers can absorb this (margin loss) but the smaller manufacturers have a real hard time competing.
We’re going to see fewer flat panel companies in the business than last year. Anybody and everybody can stick their name on a flat panel, and I think the third-tier players are going to go away as prices compress between first tier and second tier, and flat panels become more affordable for every man.