Music machines

Audio systems are going out of fashion...enter the home theatre.

Indians may be spending more and more time listening to music, but the market for home audio systems is fast shrinking.

"We do not display audio systems anymore," says a salesman at a Mumbai-chain, Sumaria Electronics, pointing to home theatre systems as an alternative for consumers.

In the recent past, consumers have increasingly opted for home theatre systems which serve a dual purpose "" you can see films on them and also listen to music.

No wonder, the Rs 750 crore market for audio music systems declined by 15.4 per cent in 2006. This year, too, the market has grown barely at 0.9 per cent. In contrast, the Rs 408 crore home theatre segment registered a growth of 31.6 per cent in 2006 and went up 72 per cent in the first six months of 2007.

Even gadgets at the other end of the spectrum, "music on-the-go", are selling more. MP3 players are still largely an urban phenomenon but this year, the market for these is expected to grow to over 500,000 units and 40 per cent of the market is expected to be organised.

But as consumers' awareness of audio equipment has grown, home theatre systems have become the main drivers of growth for nearly all consumer electronic companies. Even the cost of most home theater systems, now available in the Rs 10,000-15,000 price range, is comparable to that of home audio systems.

"The 2007 home theatre lineup should further fuel the growth of our home theatre segment which is seeing a huge interest, linked with the exponential growth being witnessed in the flat panel television category. A home theatre is available at prices comparable to that of a home audio system. The consumer wants a better deal for the money spent, hence the preference for home theatre sytsems," states R Zutshi, deputy managing director, Samsung India.

"We are targeting a 70 per cent growth in our home theatre volumes this year," he adds.

"High disposable incomes, lifestyle need, technological advancments and greater exposure to global trends are some of the major factors that have driven growth in the country.

"Indian consumers are today well aware of global trends and are willing to experiment and purchase high-end products which offer value-added features and convenient usage," says Amitabh Tiwari, business group head, consumer electronics, LG Electronics India.

The major players in the audio category include Samsung, LG, Sony, Philips, Panasonic and Sharp. The other high-end audio systems are from Onkyo and Bose.