SpeakerCraft Founder Cuts Future Path, Buys Wireless Audio Firm

"Coming from the loudspeaker side, getting an amplifier company and a DSP company and a battery company is like we have new toys to play with,” Burkhardt said, calling Soundcast “the leader that nobody knows about in wireless audio.” Burkhardt’s team includes Oscar Ciornei, who will head business development, and Jeff Francisco, chief technology officer, along with Soundcast’s current management. “Soundcast already has a great management and sales team in place,” Burkhardt said, saying his “financial resources” will help the company.

Burkhardt, Soundcast CEO, spoke to us from a $3 million home in California where the buyer had instructed him to “remove all the racks of equipment and all the keypads and make it a non-Crestron house.” He took the buyer to an Apple store and picked out a wireless baby monitor, addressable and dimmable Philips LED lights, and a Nest thermostat, all controllable by an iPhone. “That was $50,000 worth of custom-installed electronics a couple of years ago,” he said. “Things are getting a hell of a lot simpler,” he said, of residential electronics, “but you're still going to need speakers for high-quality music,” he said.

While early custom electronics companies, including SpeakerCraft, Niles Audio and others succeeded in establishing the wired multi-room audio industry early on, “the technology has changed so much so fast that I think a lot of people are scared of it,” Burkhardt said. “It used to be that the hi-fi equipment was the important stuff, but that’s changed,” he said. Today, he said, consumers’ phone “is their life, and everything they have is in it, including their music.” Rather than accessing a bank of source components in an equipment room, consumers today want audio gear to fit different types of playback situations, including being able to take a speaker with them for 20 hours of playback “without having to plug it in,” he said. “There are all new things in the equation,” he said.

One of Soundcast’s more popular products is the OutCast, reviewed by CNET in July 2008 and updated Monday. CNET called OutCast “extremely innovative, featuring a weatherproof and completely wireless design” based on 2.4-Ghz wireless transmission that can send a signal several hundred feet away. Soundcast and its intellectual property portfolio and patents held appeal for Burkhardt along with its “strong existing footprint,” Burkhardt said.

Burkhardt’s vision centers on Soundcast -- which sells largely through independent retail dealers -- becoming “much more custom” to build off of the executive team’s “loyal dealers.” They'll rely on those dealers to help define the product portfolio, he said. Product development will focus on flexibility and elegance in design, he said. “Put an amplifier and DSP in front of a dealer, along with any type of speaker, and they can figure out what they want to make,” Burkhardt said, comparing the building-block approach for product design to a “Lego” set. “You can design any type of system you want,” he said.

Soundcast’s distribution base will be much different three months from now than it is today, Burkhardt said. The company will have a stronger custom focus but will also expand retail into “different channels,” he said. “I see Soundcast as a product that could go into anything” due to their wireless, lightweight designs. “If Louis Vuitton made a Soundcast speaker, would you buy it?” he asked, only half jokingly. Burkhardt probably would, citing the $399 Philippe Starck headphones he just bought because of their “gorgeous” industrial design. “There’s going to be a lot of different buyers,” he said, comparing the product design possibilities to the endorsed headphone design model. “If you can make good partnerships with other good companies, one and one can equal three,” he said. “If Soundcast can work with other technology providers in the home, then we'll have scored a homerun.”

Burkhardt promised a “heck of a lot” of new products at CEDIA Expo this fall. Both wired and wireless products will debut from the company, he said. This time next year, the current staff of fewer than 20 employees will have doubled, largely in engineering and product development, he said. None of the products will include any of the technology that went into SpeakerCraft’s ill-fated Nirv multi-room AV system, which Nortek pulled from the market last year, Burkhardt said.

Burkhardt is still part of a lawsuit, along with Francisco, against Nortek, which purchased SpeakerCraft in 2003. In his suit, filed last November, Burkhardt claimed his non-compete agreement with SpeakerCraft expired in December 2009 when SpeakerCraft stopped doing business as a result of Nortek’s bankruptcy. In the lawsuit, Burkhardt and Francisco are seeking damages and a declaratory ruling that their non-compete agreement with Nortek had expired in 2008 (CED Jan 22 p1). “I wouldn’t have bought a new company if I thought their non-compete held any water,” he said.