Voxx’s First After-Market Mobile DTV Tuner Delayed, CEO Says

The tuner might not ship until Q4, but “we definitely don’t plan to have” the device out for the holiday season in Voxx’s financial forecast for this fiscal year anyway, said Lavelle. He still expects that U.S. mobile DTV tuners could generate $30 million in annual revenue for the company eventually, he said. The tuner will likely be priced $399 to $499, and Voxx expects to later offer it as an install option in U.S. vehicles in 2014, he told us in December.

Consumers are “looking for more and more live content,” and the mobile tuner is “a way of getting live content in the car” that’s local, including news and sports, said Lavelle. “People want in their cars what they have in their house,” including Netflix streaming and other video, he said. Its tuner will provide that and will also be able to store movies via onboard memory, he said. “The more content users have in the car, the more the backseat of that car is like their house and that’s what they want,” he said.

The manufacturer is incorporating Roku’s Streaming Stick in a digital home antenna that will ship in Q3 or Q4 under its RCA and Terk brands, it said. RCA and Terk have No. 1 market share in HDTV over-the-air antennas, Lavelle said. The antenna will provide “regular over-the-air broadcast” TV and Roku’s streaming content that will “add anywhere from 300 to 700 different channels,” he told us. The price wasn’t provided yet. The antenna “will give a tremendous amount of flexibility to the user,” said Lavelle.

Voxx is “going to start off with the Stick and then migrate” to products with the “boards and everything … right inside our antenna” so consumers “won’t need” the Streaming Stick, said Lavelle. Voxx has also talked to Roku about using the streaming technology in “some of our mobile product, but nothing has expanded beyond” the antenna “at this point,” he said.

There were 14 CE manufacturers making devices that use the Streaming Stick as of March 5, Roku said last month. That was after six companies, including Voxx and Hisense, became “Roku ready” partners, Roku said at CES. Roku didn’t say Wednesday whether any manufacturers were added since then. Hisense USA started shipping 40-inch and 46-inch K360M Roku Ready TVs using Streaming Sticks, along with 50-inch and 55-inch K610 Smart TVs, to more than 2,500 Walmart stores, the Hisense division said Tuesday. Roku shipped its 5 millionth streaming set-top box in the U.S., CEO Anthony Wood said at its blog Wednesday. Since 2008, it has delivered 8 billion streams of video and music to Roku players and it now offers about 750 channels, he said. Twenty-five percent of Roku players stream more than 35 hours per week to a TV, he said.

U.S. Bankruptcy Court documents filed by Electronics Expo indicated Voxx’s Klipsch brand was owed $132,104 by the bankrupt retailer. But Klipsch business with the retailer was on a “C.O.D. basis” and “we don’t see any balance that’s owed to us by them,” Lavelle told us Tuesday. Electronics Expo represented just a “small” part of Voxx’s business and the retailer mainly sold its “excess products,” he said, telling us the retailer was not a top Voxx customer.

The retailer’s bankruptcy was “just indicative of how difficult it is at retail in today’s environment,” said Lavelle. “I think the strong will survive. I think they have to change and I see that happening now within some of the companies that we do business with. There is a more urgent need to move quicker,” he said. “It’s not the end of the world. … Are others still challenged? Yes,” he said, declining to name any of them.

Voxx has “a lot of confidence” in Best Buy, said Lavelle. “They are adapting. Their movement on the online space has been [just] short of amazing since they started really paying attention to it. I think that they're one of the ones that are adapting and moving,” he said, pointing to Best Buy’s decision starting in the holiday season to match Amazon and other online pricing. “They resisted that for years,” so Best Buy has been making “big changes and I think it’s working,” he said. “It allows them to compete” and gives them “time to change the things that they need to change,” he said, predicting the retail chain will “be fine.” Best Buy may be losing money on certain products it matches pricing on, but the important thing is “they're not losing the customer -- the customer is going to come” to Best Buy stores “to listen” to audio and look at their TVs before buying products, he said. “A good demonstration is still very, very important and you can only get that at a bricks-and-mortar” retailer, he said. “There are reviews that you can read, but when you're making a big purchase” like a flat-screen TV that needs to be installed “I do think there is a strong need for a bricks-and-mortar” retailer, he said. There are also “new technology” products coming that will bring consumers back to Best Buy and other CE retail stores after they make a major purchase, and they will also return to buy audio equipment for large-screen TVs, he said. Voxx’s Klipsch and Jamo products are sold at Best Buy stores, and its products are sold at “virtually every major specialty audio store” in the U.S., he said.

Voxx is seeing growth in audio, and that business has been growing for Voxx 10-14 percent in the U.S. and Europe “for the last few years,” said Lavelle, pointing to the growing popularity of soundbars. “A primary reason for that is the thinness in the new TVs that make it virtually impossible for the audio to match the video” in quality, he said. That and the fact that soundbars can be installed so easily are why their sales are growing, he said. Soundbars may “cannibalize” sales of 5.1 surround-sound systems, but that’s “not yet” happening to Voxx, he said.

Voxx has “seen some very nice growth” in sales of the soundbars it introduced over the past year, its first full one fielding products in that category, said Lavelle. “We've done very well with them,” he said. “We're in good position with our customers” and “gaining market share,” he said. Voxx is fielding three soundbars now under the Klipsch and Energy brands, and “we'll be introducing a fourth” model at about $1,500, he said. “We should see it in our second quarter,” he said.

The company’s headphone business has also “done well as we continue to expand” sales in that category, which Klipsch has been in for a while, said Lavelle. Its price points are higher than many rivals because it’s fielding headphones designed “for the audiophile,” he said. Its on-ear headphones cost more than $350 and its S10i in-ear headphones even sell for $399, he said. But it remains a competitive market. Beats, for instance, is still “doing well” and has “good distribution,” so “I don’t see any real change” for Voxx on that front despite the ending of the Beats pact with Monster, he said.

Wireless speakers that are used with tablets and smartphones have “done very, very well” for Voxx, said Lavelle. It also “gained top market share” in outdoor wireless speakers under the Acoustic Research brand in the U.S. in 2012, according to internal data, he said. “That’s been a big push for us,” he said. Voxx is also doing well with RCA-branded power charging products, he said.

Business in general has been “consistent” with what Lavelle reported in Voxx’s last earnings call, in January, he said. “We're seeing some growth in the U.S. market,” but sales continue to be “flat” to down in Europe, he said. It’s “still seeing strength in the U.S. car market, which is our OEM business, but that’s being offset somewhat by the weakness” in European car market sales, he said.