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Consumer Electronics Dealer Demand Grows

Installing dealers had total sales of $7.3 billion to residential customers in 2005, an 18 percent increase over 2004 $6.2 billion, according to Parks Associates.

Consumer demand for multiroom audio, home theater, and associated control systems was largely responsible for the strong growth in the dealer channel. Audio systems were the single largest product category is 2005, generating more than $2.1 billion in residential sales, with Russound and Denon as the top brands for audio components and SpeakerCraft as the most popular brand of speakers.

"Multiroom audio exceeded our estimates by nearly 9 percenty, and home theater sales beat expectations by about 8 percent," said Bill Ablondi, director of home systems research at Parks Associates. "There are several factors driving this demand. More affordable systems are broadening the market to include more midrange homes, more builders are aggressively marketing entertainment amenities, and, most importantly, more home buyers want to incorporate entertainment systems into the infrastructure of their home."

Installing dealers are also optimistic about the potential for growth in 2006, according to "1Q06 Installing Dealer Survey." Nearly 40 percent of dealers expect to see their businesses grow by more than 20 percent in 2006, and 30 percent project growth of 11-20 percent. Only 4 percent expect to see a decline in business in 2006.

"The installing dealer channel is expanding, both in numbers of integrators/installers and in the sales each firm generates annually," Ablondi said. "We're seeing the evolution from a custom-only channel to one which is beginning to embrace pre-packaged systems in an effort to expand its reach in the market."

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