[Report] The 2004/2005 Outlook for the U.S. Market for Home Entertainment Equipment and Systems (With Long-Term Forecasts Through 2009)

INTRODUCTION

Discussion Parameters i

Sources and Methodology.. ii

CHAPTER I: OVERVIEW OF THE HOME ENTERTAINMENT EQUIPMENT AND SYSTEMS INDUSTRY

Consumer Confidence is High Once Again. 1

The ' Cocooning' of America. 2

Changing Technology. 2

Retail Prices Fall Dramatically. 4

Women Will No Longer Be Ignored.. 4

China and India Become Major Global Players 5

CHAPTER II: THE CONSUMER ELECTRONICS INDUSTRY

Consumer Electronics are Back. 6

U.S. Manufacturers' Sales of Consumer Electronics. 7

Home Entertainment Equipment and Systems. 13

PC Makers Enter the Industry 19

Speakers 20

New Products.. 26

CHAPTER III: THE U.S. MARKET FOR VIDEO ENTERTAINMENT EQUIPMENT AND SYSTEMS

Manufacturers' Sales.. 29

Americans Love Their TV 34

Analog to Digital TVs. 34

LCD vs. Plasma TVs.. 36

TV/VCR and TV/VCR/DVD Combinations.. 37

Top-Selling Brands of Color TVs 42

Intel Corporation Unveils Chip for Flat-Panel TVs 44

Microsoft Corporation Introduces Wireless PC-TV Link. 44

DVD Players 45

TV Shows on DVD Help Boost Sales. 46

Top-Selling Brands of DVD Players. 47

The U.S. Government Investigates DVD Makers. 49

The EVD. 50

Personal Video Recorders. 50

Videocassette Players and VCR Decks 52

Camcorders. 56

Blank Videocassettes 59

CHAPTER IV: THE U.S. MARKET FOR AUDIO ENTERTAINMENT EQUIPMENT AND SYSTEMS

Manufacturers' Sales.. 61

Audio Systems vs. Home Theater-in-a-Box. 66

Portable Audio Products.. 70

The End of CDs?.. 74

Blank Audiocassettes 75

MP3 Players. 76

Radios.. 78

High-Definition Radio. 81

Aftermarket Autosound. 82

CHAPTER V: FACTORS AFFECTING DEMAND IN THE HOME ENTERTAINMENT EQUIPMENT AND SYSTEMS INDUSTRY

The U.S. Economy 85

America Becomes a ' Charge It' Society.. 92

The Housing Market 94

Improvements in Technology. 97

Equipment Life Expectancy 98

The Automobile Industry 99

The Commercial Market.. 102

Women Shoppers. 104

College Students Still Prefer Car and Home Audio Systems.. 106

Six in Ten Children Have Their Own TV. 107

Region and Income.. 108

Occupation 112

Hispanics Now Nationfs Largest Minority. 113

CHAPTER VI: PRICES IN THE HOME ENTERTAINMENT EQUIPMENT AND SYSTEMS INDUSTRY

Producer Prices for TVs.. 124

Producer Prices for Other Products. 128

Consumer Prices.. 132

David vs. Goliath 133

The Dilemma with Retail Prices.. 134

Consumer Prices for TVs and Video Products. 135

Consumer Prices for Other Audio and Video Products.. 137

CHAPTER VII: MEDIA OUTLAYS IN THE HOME ENTERTAINMENT EQUIPMENT AND SYSTEMS INDUSTRY

Media Outlays. 140

Advertising Trends 141

Philips Electronic Circus.. 142

Samsung Electronics Gets Reloaded. 143

TVs. 143

DVD Systems. 146

Electronic Entertainment Equipment 149

Camcorders. 154

Audio Equipment and CD Systems.. 156

Auto Electronic Equipment. 163

Other Products 166

Speakers 169

CHAPTER VIII: FOREIGN TRADE OF CONSUMER ELECTRONICS

The U.S. Dollar Continues to Weaken. 171

U.S. Foreign Trade of Electronics, by Segment 174

China Becomes Number-One U.S. Source of Imported Consumer Electronics. 177

Will India Become the Next China?.. 177

U.S. Balance of Trade for Consumer Electronics 178

U.S. Exports of Consumer Electronics 180

U.S. Imports of Consumer Electronics 186

U.S. Slaps Duties on Chinese-Made Color TVs.. 191

Consumer Electronics in Canada.. 192

CHAPTER IX: DISTRIBUTION OF HOME ENTERTAINMENT EQUIPMENT AND SYSTEMS

' Home' Products Have Been Good for Retailers. 194

Whatfs a Retailer to Do?.. 194

Top Consumer Electronics Brands 196

Retail Sales of Consumer Electronics. 197

eTis the Season for Consumer Electronics.. 200

Who Wears the Pants in This Family? 203

TV and Radio Stores.. 204

Discount Stores. 205

Wholesale Clubs 208

Nonstore Retailers 209

Auto Parts Distributors.. 211

Other Notable Retail Outlets.. 212

CHAPTER X: STRUCTURE OF THE AUDIO AND VIDEO EQUIPMENT INDUSTRY

Made in ' fill in country here' 220

Operating Costs and Profit Margins. 220

More Manufacturers Do Their Own Work.. 222

Employment Trends. 224

New Capital Expenditures.. 230

Ending Inventory. 232

Audio and Video Equipment Manufacturing Establishments.. 233

The Plant Managerfs Workbook. 237

How to Use This Section 237
Gathering Your Data. 238
Developing Your Ratios. 239
How Does Your Plant Stack Up?. 240

Explanation of Terms.. 245

CHAPTER XI: COMPANY PROFILES

Introduction 251

Company Profiles. 255

Alps Electric Co., Ltd 255
Apogee Technology, Inc. 256
Audiovox Corporation. 258
Bang & Olufsen a/s 260
Bose Corporation.. 261
Boston Acoustics, Inc.. 263
Canon Inc. (Canon U.S.A., Inc.). 264
Coby Electronics Corp 266
Daewoo Electronics Corporation 267
Emerson Radio Corp.. 268
Gateway, Inc.. 269
GPX, Inc 271
Harman International Industries, Incorporated. 272
Hitachi, Ltd. (Hitachi America, Ltd.) 274
Kenwood Corporation (Kenwood USA Corporation). 275
Koninklijke Philips Electronics N.V. (Philips Electronics North America Corp.) 276
Koss Corporation.. 278
LG Electronics Inc.. 280

Zenith Electronics Corporation 281

Matsushita Electric Industrial Co., Ltd. (Matsushita Electric Corporation of America) 282
Mitsubishi Electric Corporation (Mitsubishi Electric and Electronics USA Inc.) 284
Nakamichi Corporation (Nakamichi America Corporation).. 286
Pioneer Corporation (Pioneer Electronics [USA] Inc.).. 287
Polk Audio, Inc. 289
Samsung Electronics Co., Ltd. (Samsung Electronics America, Inc.). 290
Sansui Electric Co., Ltd. 292
Sharp Corporation (Sharp Electronics Corporation).. 293
Sony Corporation (Sony Corporation of America) 295
TDK Corporation 297
Thomson S.A. 299
Toshiba Corporation (Toshiba America, Inc.). 300

CHAPTER XII: DIRECTORY OF SELECTED U.S. MANUFACTURERS OF HOME ENTERTAINMENT EQUIPMENT AND SYSTEMS

Introduction 302

Directory. 303

LIST OF TABLES

Table II-1 U.S. Manufacturers' Sales of Consumer Electronics. 9
Table II-2 U.S. Manufacturers' Sales of Consumer Electronics, by Segment.. 10
Table II-3 Product Mix of U.S. Manufacturers' Sales of Consumer Electronics.. 12
Table II-4 U.S. Manufacturers' Sales of Home Entertainment Equipment and Systems.. 16
Table II-5 U.S. Manufacturers' Sales of Home Entertainment Equipment and Systems, by Segment 17
Table II-6 Product Mix of U.S. Manufacturers' Sales of Home Entertainment Equipment and Systems.. 18
Table II-7 Growth Rates in the Home Entertainment Equipment and Systems Industry. 18
Table II-8 U.S. Manufacturers' Sales of Speaker Systems.. 21
Table II-9 Producer Price Trends for Loudspeakers Sold Separately.. 22
Table II-10 Producer Price Trends for Bookshelf Loudspeakers 23
Table II-11 Producer Price Trends for Floorstanding Loudspeakers 24
Table II-12 Producer Price Trends for Other Loudspeakers.. 25
Table II-13 Producer Price Trends for Loudspeaker Systems. 26
Table III-1 U.S. Manufacturers' Sales of Video Entertainment Equipment and Systems.. 31
Table III-2 U.S. Manufacturers' Unit Sales of Video Entertainment Equipment and Systems, by Type.. 32
Table III-3 Product Mix of U.S. Manufacturers' Unit Sales of Video Entertainment Equipment and Systems.. 32
Table III-4 U.S. Manufacturers' Dollar Sales of Video Entertainment Equipment and Systems, by Type.. 33
Table III-5 Product Mix of U.S. Manufacturers' Dollar Sales of Video Entertainment Equipment and Systems.. 33
Table III-6 U.S. Manufacturers' Sales of Analog Direct-View Color TVs.. 37
Table III-7 U.S. Manufacturers' Sales of Analog Projection TVs 38
Table III-8 U.S. Manufacturers' Sales of Monochrome TVs.. 39
Table III-9 U.S. Manufacturers' Sales of Digital Direct-View TVs. 40
Table III-10 U.S. Manufacturers' Sales of Digital Projection TVs. 40
Table III-11 U.S. Manufacturers' Sales of LCD and Plasma TVs. 41
Table III-12 U.S. Manufacturers' Sales of TV/VCR Combinations.. 42
Table III-13 Market Shares of the Leading Color TVs, by Brand.. 44
Table III-14 U.S. Manufacturers' Sales of DVD Players. 46
Table III-15 Market Shares of the Leading DVD Players, by Brand 49
Table III-16 U.S. Manufacturers' Sales of Personal Video Recorders.. 52
Table III-17 U.S. Manufacturers' Sales of Videocassette Players 53
Table III-18 U.S. Manufacturers' Sales of VCR Decks 54
Table III-19 Market Shares of the Leading VCRs, by Brand 56
Table III-20 U.S. Manufacturers' Sales of Camcorders.. 57
Table III-21 Market Shares of the Leading Camcorders, by Brand. 59
Table III-22 U.S. Manufacturers' Sales of Blank Videocassettes. 60
Table IV-1 U.S. Manufacturers' Sales of Audio Entertainment Equipment and Systems.. 63
Table IV-2 U.S. Manufacturers' Unit Sales of Audio Entertainment Equipment and Systems, by Type.. 64
Table IV-3 Product Mix of U.S. Manufacturers' Unit Sales of Audio Entertainment Equipment and Systems.. 64
Table IV-4 U.S. Manufacturers' Dollar Sales of Audio Entertainment Equipment and Systems, by Type.. 65
Table IV-5 Product Mix of U.S. Manufacturers' Dollar Sales of Audio Entertainment Equipment and Systems.. 65
Table IV-6 U.S. Manufacturers' Sales of Separate Audio Components 67
Table IV-7 U.S. Manufacturers' Sales of Compact Audio Systems.. 68
Table IV-8 U.S. Manufacturers' Sales of Rack Audio Systems 69
Table IV-9 U.S. Manufacturers' Sales of Home Theater-in-a-Box. 70
Table IV-10 U.S. Manufacturers' Sales of Portable Tape and Radio/Tape Recorders 72
Table IV-11 U.S. Manufacturers' Sales of Portable CD Equipment 73
Table IV-12 U.S. Manufacturers' Sales of Portable Tape and Radio/Tape Players.. 74
Table IV-13 U.S. Manufacturers' Sales of Blank Audiocassettes. 76
Table IV-14 U.S. Manufacturers' Sales of MP3 Players.. 78
Table IV-15 U.S. Manufacturers' Sales of Clock Radios 79
Table IV-16 U.S. Manufacturers' Sales of Portable Radios.. 80
Table IV-17 U.S. Manufacturers' Sales of Table Radios. 81
Table IV-18 U.S. Manufacturers' Sales of Aftermarket Autosound.. 84
Table V-1 U.S. Gross Domestic Product.. 87
Table V-2 U.S. Gross Private Domestic Investment.. 87
Table V-3 U.S. Disposable Personal Income. 88
Table V-4 U.S. Per Capita Disposable Personal Income.. 88
Table V-5 U.S. Personal Consumption Expenditures.. 89
Table V-6 U.S. Per Capita Personal Consumption Expenditures 89
Table V-7 Personal Consumption Expenditures on Home Entertainment Equipment and Systems, by Type.. 90
Table V-8 Consumer Confidence Index. 92
Table V-9 Prime Rate Charged by Banks 93
Table V-10 Consumer Credit.. 94
Table V-11 U.S. Homeownership Rates.. 95
Table V-12 New Privately Owned Housing Units Started in the U.S.. 96
Table V-13 New Privately Owned Housing Units Completed in the U.S. 96
Table V-14 Saturation Levels for Selected Home Entertainment Equipment and Systems.. 97
Table V-15 Average Life Expectancy of Selected Home Entertainment Equipment and Systems 99
Table V-16 U.S. Motor Vehicle Registrations, by Type of Vehicle.. 100
Table V-17 Number of Motor Vehicles in Operation in the U.S. 101
Table V-18 U.S. Car and Truck Sales 101
Table V-19 Number of Properties and Average Occupancy Rates in the U.S. Lodging Industry.. 103
Table V-20 Number of U.S. Hospitals and School Districts. 104
Table V-21 Consumer Electronics Products Women Want. 105
Table V-22 Top Consumer Electronics Brands Among Women.. 106
Table V-23 Average Annual Expenditures on Selected Home Entertainment Equipment and Systems, by Age. 107
Table V-24 Average Annual Expenditures on Selected Home Entertainment Equipment and Systems, by Household Composition.. 108
Table V-25 Selected Home Entertainment Equipment and Systems Used by Households in the U.S., by Region. 110
Table V-26 Average Annual Expenditures on Selected Home Entertainment Equipment and Systems, by Region. 110
Table V-27 Selected Home Entertainment Equipment and Systems Used by Households in the U.S., by Household Income 111
Table V-28 Average Annual Expenditures on Selected Home Entertainment Equipment and Systems, by Household Income 112
Table V-29 Average Annual Expenditures on Selected Home Entertainment Equipment and Systems, by Occupation 113
Table V-30 Average Annual Expenditures on Selected Home Entertainment Equipment and Systems, by Type of Area, Race, and Ethnic Origin.. 114
Table V-31 U.S. Resident Population Trends and Projections.. 115
Table V-32 U.S. Population Trends and Projections, by Age Group. 116
Table V-33 Age Distribution of the U.S. Population.. 117
Table V-34 U.S. Population and Household Trends and Projections 118
Table V-35 U.S. Resident Population Projections, by Region 119
Table V-36 U.S. Resident Population Projections, by State 120
Table V-37 Distribution of the U.S. Population, by State 122
Table VI-1 Producer Price Trends for TV Receivers, Including Combination Models 125
Table VI-2 Producer Price Trends for Table and Portable TVs.. 126
Table VI-3 Producer Price Trends for Color TVs Over 17 Inches.. 127
Table VI-4 Producer Price Trends for Projection TVs 128
Table VI-5 Producer Price Trends for Consumer Audio/Video Recorders and Players. 129
Table VI-6 Producer Price Trends for High-Fidelity Equipment and Components.. 130
Table VI-7 Producer Price Trends for Consumer High-Fidelity Components 131
Table VI-8 Producer Price Trends for Power Amplifiers.. 132
Table VI-9 Consumer Price Trends for TVs. 136
Table VI-10 Consumer Price Trends for Other Video Equipment. 137
Table VI-11 Consumer Price Trends for Audio Equipment.. 138
Table VI-12 Consumer Price Trends for Videocassettes and Discs and Audiodiscs and Tapes, Including Rentals.. 139
Table VII-1 Media Outlays for Home Entertainment Equipment and Systems 140
Table VII-2 Distribution of Media Outlays for Home Entertainment Equipment and Systems, by Type.. 141
Table VII-3 Media Outlays for TVs, by Company and Brand.. 144
Table VII-4 Media Outlays for DVD Systems, by Company and Brand.. 147
Table VII-5 Media Outlays for Electronic Entertainment Equipment, by Company and Brand 149
Table VII-6 Media Outlays for Camcorders, by Company and Brand.. 154
Table VII-7 Media Outlays for Audio Equipment, by Company and Brand 157
Table VII-8 Media Outlays for CD Systems, by Company and Brand.. 161
Table VII-9 Media Outlays for Auto Electronic Equipment, by Company and Brand.. 164
Table VII-10 Media Outlays for Video Equipment and Accessories, by Company and Brand 167
Table VII-11 Media Outlays for VCRs, by Company and Brand.. 168
Table VII-12 Media Outlays for Radios, by Company and Brand 169
Table VII-13 Media Outlays for Speakers, by Company and Brand. 170
Table VIII-1 Average Annual Exchange Rates for Selected Countries. 172
Table VIII-2 U.S. Balance of Trade for Electronics. 174
Table VIII-3 U.S. Exports of Electronics, by Segment.. 175
Table VIII-4 Distribution of U.S. Exports of Electronics, by Segment. 175
Table VIII-5 U.S. Imports of Electronics, by Segment 176
Table VIII-6 Distribution of U.S. Imports of Electronics, by Segment.. 176
Table VIII-7 U.S. Balance of Trade for Consumer Electronics 180
Table VIII-8 U.S. Exports of Consumer Electronics, by Type.. 181
Table VIII-9 Distribution of U.S. Exports of Consumer Electronics, by Type. 182
Table VIII-10 Top 20 U.S. Export Destinations for Consumer Electronics. 183
Table VIII-11 Dollar Market Shares of the Top 20 U.S. Export Destinations for Consumer Electronics. 184
Table VIII-12 U.S. Imports of Consumer Electronics, by Type 186
Table VIII-13 Distribution of U.S. Imports of Consumer Electronics, by Type.. 187
Table VIII-14 Top 20 U.S. Import Sources for Consumer Electronics.. 188
Table VIII-15 Dollar Market Shares of the Top 20 U.S. Import Sources for Consumer Electronics. 189
Table VIII-16 Canada: Unit Shipments of Consumer Electronics.. 193
Table IX-1 Top-Selling Consumer Electronics Brands.. 197
Table IX-2 Retail Sales of Consumer Electronics, by Retail Outlet 198
Table IX-3 Distribution of Retail Sales of Consumer Electronics, by Retail Outlet.. 199
Table IX-4 Consumer Electronics as a Percentage of In-Store Sales, by Retail Outlet 200
Table IX-5 Monthly Distribution of Sales for Electronics and Appliance Stores. 203
Table IX-6 Selected Leading U.S. TV and Radio Stores 205
Table IX-7 Selected Leading U.S. Discount Stores 207
Table IX-8 Distribution of Sales of Consumer Electronics at Discount Stores, by Type 207
Table IX-9 Discount Store Sales of Car Stereos.. 208
Table IX-10 Selected Leading U.S. Wholesale Clubs.. 209
Table IX-11 Selected Leading U.S. TV Home Shopping Networks 211
Table IX-12 Top 10 U.S. Auto Parts Distributors. 212
Table IX-13 Selected Leading U.S. Chain Drug Stores.. 213
Table IX-14 Financial Profile of Radio, TV, and Other Electronics Stores.. 214
Table IX-15 Financial Profile of Radio, TV, and Other Electronics Stores, Sorted by Sales.. 215
Table IX-16 Financial Profile of Radio, TV, and Other Electronics Stores, Sorted by Assets 216
Table IX-17 Financial Profile of Electrical and Electronic Appliance, TV, and Radio Set Merchant Wholesalers 217
Table IX-18 Financial Profile of Electrical and Electronic Appliance, TV, and Radio Set Merchant Wholesalers, Sorted by Sales 218
Table IX-19 Financial Profile of Electrical and Electronic Appliance, TV, and Radio Set Merchant Wholesalers, Sorted by Assets. 219
Table X-1 Operating Structure of the Audio and Video Equipment Industry.. 221
Table X-2 Gross Operating Margin in the Audio and Video Equipment Industry.. 222
Table X-3 Value Added by Manufacture in the Audio and Video Equipment Industry.. 223
Table X-4 Vertical Integration Index for the Audio and Video Equipment Industry.. 224
Table X-5 Employment Structure of the Audio and Video Equipment Industry.. 225
Table X-6 Total Labor Costs in the Audio and Video Equipment Industry.. 226
Table X-7 Average Hourly Earnings of Production Workers in the Audio and Video Equipment Industry.. 227
Table X-8 Cost of Living Index for Production Workers in the Audio and Video Equipment Industry. 228
Table X-9 Labor Productivity in the Audio and Video Equipment Industry.. 229
Table X-10 Indexes of Real Labor Productivity in the Audio and Video Equipment Industry 230
Table X-11 New Capital Expenditures by the Audio and Video Equipment Industry.. 231
Table X-12 Plant vs. Equipment Expenditures by the Audio and Video Equipment Industry 232
Table X-13 Ending Inventories in the Audio and Video Equipment Industry. 233
Table X-14 Number of Audio and Video Equipment Manufacturing Establishments. 234
Table X-15 Number of Manufacturing Establishments, Number of Employees, and Payroll in the Audio and Video Equipment Industry, by State. 235
Table X-16 Number of Audio and Video Equipment Manufacturing Establishments, by Employment Size.. 236
Table XI-1 Financial Profile of Audio and Video Equipment Manufacturers.. 252
Table XI-2 Financial Profile of Audio and Video Equipment Manufacturers, Sorted by Sales.. 253
Table XI-3 Financial Profile of Audio and Video Equipment Manufacturers, Sorted by Assets 254

LIST OF FIGURES

Figure II-1 U.S. Manufacturers' Sales of Consumer Electronics. 8
Figure II-2 U.S. Manufacturers' Sales of Home Entertainment Equipment and Systems.. 15
Figure III-1 Market Shares of the Leading Color TVs, by Brand.. 43
Figure III-2 Market Shares of the Leading DVD Players, by Brand 48
Figure III-3 Market Shares of the Leading VCRs, by Brand 55
Figure III-4 Market Shares of the Leading Camcorders, by Brand. 58
Figure VIII-1 U.S. Balance of Trade for Electronics. 173
Figure VIII-2 U.S. Balance of Trade for Consumer Electronics 179
Figure VIII-3 Dollar Market Shares of the Leading U.S. Export Destinations for Consumer Electronics. 185
Figure VIII-4 Dollar Market Shares of the Leading U.S. Import Sources for Consumer Electronics. 190

The 2004/2005 Outlook for the U.S. Market for Home Entertainment Equipment and Systems (With Long-Term Forecasts Through 2009)

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