AKAI TRIMS ITS DLP LINE TO SINGLE 44W MODEL, EXPANDS DISTRIBUTION

The 44W, which is expected to ship in Sept., replaces earlier 46W and 52W models that were scheduled to arrive starting this month. The 44W, the price of which hasn’t been set, will incorporate Texas Instruments’ HD2 chipset and be assembled at Five Rivers Electronic Innovations in Greeneville, Tenn., Lafferty said. The selection of Five Rivers is a departure for Akai, which previously relied on Samsung to build most of its CRT-based rear projection and plasma TVs. The latter also include a 42W ($2,499) that Akai is contracting Samsung to build under Circuit City’s private label Esa brand.

Given the components shortage that has gripped DLP-based sets, “I doubted if we would have more than a 44W so we'll expand our range next year,” said Lafferty, whose company is licensing the Akai brand from Grande Group of Hong Kong. “We want to get our hands on doing advanced technology and want to be a price leader and expand those markets by getting the products into more consumers’ homes.” Akai’s decision to choose Five Rivers to assemble the 44W was prompted by the former Philips plant’s “real talent pool in terms of mechanical engineering and all those things that you may not get with your standard contract manufacturer,” Lafferty said.

In addition to Circuit City and Costco, Akai has signed distribution agreements in recent weeks with BrandsMart, Conn’s and Ultimate Electronics and aims to have 5-6 regional dealers selling its 42W plasma ($3,199) and 42W CRT-based rear projection TVs ($999) by year-end, Lafferty said. The expanded distribution comes 2-1/2 years after Akai Holdings launched an attempt to revive the brand largely through sales at Sam’s Club. The initial line included 27” analog flat-screen direct-view and 54” rear projection TVs and a 54” digital model. Akai has since moved to “diminish our presence a little bit” at Sam’s as it expands distribution to other retailers, Lafferty said. In addition to TVs, Akai also is weighing introductions of DVD recorders and portable DVD players, both of which have seen prices fall as new competitors emerged. Akai Holdings, which is based in Woodland Hills, Cal., is using a combination of direct sales and reps to brings its product to market.

Akai is “is aggressively priced and a good product and we don’t feel like we're selling our name down the river by carrying it,” said Ultimate Electronics CEO David Workman, whose chain is carrying the 42” CRT-based rear projection TV, but has no immediate plans to add the 44W. Part of the lure was that Akai, unlike some of its low-priced brethren, has its 42W plasma and rear projection TVs backed by Samsung’s service operations, Workman said. He said among the factors about which Ultimate is most concerned when it takes on entry-level product is making sure that when a customer spends 4 figures on a big screen, there’s enough service support. “You want to have a parts network and the ability to take care of the customer post-sale, which was why the Samsung service backup “was attractive to us,” Workman said.

Still, Akai could diminish in perceived value if lower- priced DLP or plasma TVs from mainstream brands begin to resonate with consumers, said other retailers we polled. “We will look at all of their products relative to their position in the market and the value it represents accordingly,” an executive at another CE chain said. “The reality is that we don’t necessarily need another brand if we have the price point covered with Zenith or some other well-known brand.”