CEDIA Roundtable: The Future of the Specialty CE and Integration Markets
Pedigo: The biggest change is that business was better in 2010 than it was in 2009, and significantly so. It's still almost exclusively a retrofit/remodel market, like 65%/35%, or 60%/40% retrofit to new construction. From 2005 to 2007, the new-construction industry was at least 80%; that's almost flipped completely to the other side. And that won't change anytime soon, based on all the projections we've seen for the housing market. There has not been a huge change over the last year, but there's a positive change in what is perceived as the business climate.
Stein: Certainly new-housing construction being 70% off peak. I've heard some interesting survival tactics by dealers—and even some growth tactics. Some are making money in picking up the pieces in maintenance and repair of systems that were put in by competitors who've gone out of business. They get hold of their customer lists, and there you go. I know one integrator who's stayed solvent in his geographic area of Southern California, while the market there was quite devastated.
Another strategy that's worked for some has to do with retrofit, but quite frankly, I am a little disappointed here. I believe there's more of an opportunity, but nobody has yet figured out a way for the customer, who would be a perfect target for retrofit, and the dealer, who could actually provide product in retrofit, to actually find each other. That customer who's the perfect target doesn't know to look to the CI space; he knows to look to Best Buy. So he can possibly end up with some good things, and with a Geek Squad installation if he's not comfortable doing it himself. The CI guy may even be down the block from him but he wouldn't know it, because many of these guys may not have showrooms.