AudioSource Seeking Novel Distribution for ‘Value’ Bluetooth Speakers
AudioSource is continuing to pull back from the custom installation market while leveraging its digital amplifier technology to meet a broader customer base, CEO Tom O'Mara told us on a press tour in New York Monday. “We've been spending a lot of time reinventing the company and changing where we want to put the focus,” O'Mara said. The custom installation business “wasn’t ever going to come back from where it was in 2006 and 2007,” he said, so AudioSource started to look at growth categories to diversify its business. “We took our engineering and audio prowess and put them in places where things were changing,” he said. It’s also phasing out architectural speakers on the custom side, he said.
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In 2011, AudioSource entered the surging soundbar market, and this year’s growth plan is to attack the portable Bluetooth speaker market that’s ready for a “good value-added” audio product, O'Mara said. Next up for soundbars are Bluetooth models, he said, which will allow it to leverage the company’s buying power for aptX Bluetooth chipsets, he said. The speakers are made in China.
Having once relied 100 percent on custom installation revenue, AudioSource is now looking at an even split among its custom, soundbar and Bluetooth speaker businesses, O'Mara said. He expects soundbars to be a growth category “for quite some time,” and Bluetooth speakers are on a trajectory that’s close to headphones, he said.
AudioSource is still evolving its distribution strategy for the Sound pOp, which O'Mara called an “impulse buy” that could be sold anywhere -- the opposite of the narrowly defined custom installation market. The product, which combines a speaker phone with a monaural amplifier, is packaged in a round plastic case with a suction cup that can attach to an iPhone as a stand or attach to a surface when used as a speaker phone. It debuted on HSN in a 5 a.m. presentation over Memorial Day weekend, selling “several hundred” units during the broadcast, O'Mara said. Sound pOp is shipping to f.y.e. music stores, Electronic Express and Portland-area Bi-Mart stores, he said. “Where can’t it go?” he said. AudioSource is talking to a diverse potential retail base including Urban Outfitters, Bed Bath & Beyond, car washes, convenience stores, sporting goods retailers, cruise lines and, of course, electronics stores, O'Mara said.
In 2010, AudioSource sales were 80 percent through distribution, 5-10 through retail and 10 percent online. Now it’s more balanced with roughly equal shares in all three segments, he said. The biggest challenge online is “pricing integrity,” he said, from marketplace retailers that attach to sites such as Amazon or Sears. “The marketplace is uncensored and comes through rogue retailers or distributors,” he said. MAP policies can help control that, he said.
Amazon is one of the company’s largest customers for soundbars and two-channel amplifiers, and O'Mara expects online sales to be a big part of the Sound pOp business, but he’s not sure yet where most Sound pOp sales will occur. The product category itself is still evolving, O'Mara said. AudioSource is positioning the $39.99 Sound pOp as a “value” product “that offers good sound.” It didn’t launch with a $99 model because “that’s a pretty crowded market right now,” he said.
AudioSource is making a nine- or 12-piece interactive product display available with the device, O'Mara said. The display speaker is wired for constant power and security and its Bluetooth functionality has been disabled to prevent shoppers from playing objectionable music through the device on the retail floor, O'Mara said. Rather than relying on retail sales staff to sell the product, the product sells itself through a narrative playing on the speaker, which describes the product, explains Bluetooth and provides music samples, he said.
On the Sound pOp roadmap are four or five amplified speakers that will come in above the entry-level model during the next year, including what O'Mara hopes will be a stereo model in the same chassis size and model. The company is also planning a multi-room product connecting to one phone to create a simple whole-house audio solution, he said. An AirPlay model is also in the works but AirPlay models have to go through a roughly one-year certification process with Apple, and AudioSource wanted to hit the market sooner with its first product, O'Mara said. Time to market with the Sound pOp was five months, he said.
The roundish Sound pOp, between the size of a golf ball and a baseball, has a three-watt class D amplifier and runs on a rechargeable lithium-ion battery rated to run up to eight hours on a charge. A USB cable is supplied for charging. The design is water-resistant for use by a pool, bath or on a boat, the company said. The speaker is available in several colors including a deep blue, orange, pink, purple, black and white. Retailers set the color choices, and then the company worked with Pantone to ensure to correct shade, he said. “There’s a lot of fashion in this type of product,” he said. If the retailers turn out to be wrong and one of this year’s trendy colors doesn’t fly with consumers, then “there are a lot of avenues to move product at a large volume if you have to,” he said. “With six colors we're not putting ourselves at too much risk.”