A Look at the Global Audio and Video Industry

Category: Business & Marketing 6 0

Audio and Video Industry

The US audio and video equipment manufacturing is a $2.8 billion industry. The key players are Bose Corporation (44.1%), Harman International (21.8%) and Voxx International (6.9%). The product and services in this segmentation are speakers (44.1%), automotive audio equipment (21.5%), TVs and accessories (14.4%), other consumer audio and video equipment (20%).

Now how can others compete in this space? President and CEO of Epsilon Electronics Inc., Jack Rochel, have been in this space since the early ’80s and knows how tough it is to keep being competitive. The life cycle stage is at the decline stage and barriers to entry are high as well as the competition level.

Since tech products have a short lifecycle to begin with, there is an ever-changing tech landscape and the successive shifts in the consumption of the audio and video content are partially responsible for the regression of the industry in question within the last five years. What’s worse is the continued offshoring movement and the increasing substitution of industry products which have lead to its decline. As the economy as a whole recovered, the industry appeared to be on a path to recovery within the last few years. But this rebound was just temporary because of high import penetration and increased offshoring, the industry saw a decline of revenue in 2014 and fell further in 2015. In order to be able to stay competitive, moving production to countries with lower labor costs has become a norm in the industry over the last five years. Large multinational companies have moved their whole manufacturing operations abroad resulting in massive employment cuts. Manufacturers who have stayed in North America aim to produce high-quality sound systems.

The pressures the industry is faced with will persist over the next five years as companies continue to offshore their operations and import penetration rises. Jack Rochel knows that his industry is declining in the US due to falling revenue and declines in its number of enterprises, establishments and employees. On the other hand, globally, the industry is in the growth phase due to the introduction of new products. Jack Rochel’s largest investment is in his research and development since technical innovation is a major characteristic of this industry. Technological advancements and changing product lines have helped this industry avoid product and market saturation. However, the Audio and Video Equipment Manufacturing industry in the United States is in decline.

The biggest determinants of demand are new technologies and price and income. The development and release of new audio and video products, which may replace existing products, often create demand. Consumers respond to falling prices for audio and video equipment by buying more of these products, and this is particularly true for high-end products like high definition televisions. The purchases of a particular audio or video product can accelerate once under a particular price-point.

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