Corner Office- On the Go
BORCHARDT: For many years I think many retailers frowned at selling car audio products, because in most cases people would buy entry-level, very cheap, replacement products, many cassette or CD players. Today, with many of these home entertainment installations costing thousands of dollars, it's opening up a tremendous amount of profit opportunities for dealers. I take a look at the marketplace today and price points are going to come down, but there is a mass market out there for these type of products, and what I am looking for, as a manufacturer, is to get more space at retail. Many retailers had shrunk their car audio departments, and I think many of them are starting to take a look at this area as a new fashion—high-tech business—and devoting more space [to it]. Floor space and education are essential to be able to market these products properly to the consumer.
SHALAM: I concur with that view. Unfortunately, the auto sound industry, at least with large retailers, [has] boiled down to inexpensive, over-the-counter, promotional radios, which is not much of an exciting market, really, and the very high-end equipment that is installed by specialists for thousands of dollars. That's a very specialized niche market. But satellite radio gives the industry an opportunity to really open up all over again at every level of distribution.
BORCHARDT: We're also looking at a new demographic as far as people who are interested in these new types of products. With a lot of these more sophisticated products, we're now getting people of all ages taking a look—whether it's families or older people who are retired—at products that are going to be important to them. The market is also expanding into marine [electronics]. Marine is becoming a very strong segment for many of these products that work terrifically in boats and are becoming part of the marine entertainment environment aspect when people begin to outfit their boat properly.