Audio firms bet big on home theatres

Consumers increasingly shifting to multi-speaker systems

Suresh Varadarajan is a first-time buyer of a music system. 24 years old and six months into his new job, Varadarajan is the kind of customer who is forcing a not-so-quiet change in the Indian audio market.

"I am not sure whether I will using the tape or anything..." says the software engineer, who recently shifted from his home in Bangalore, "I have a large collection of songs on my ipod and my laptop, so I am looking for something to hook them up with and also my DVD player when I watching movies," he says.

The young engineer, who had walked into the store with a hazy idea of "a music system" walks out with a Rs 15,000 home-theatre model that does not have cassette-deck or even stack more than a single disc at a time,the two essentials for a home music system just two years ago.

"But it has the power and six speakers with which I can build my own home-theatre," Varadarajan explains his reason for picking the rather modest looking model. Consumer electronics manufacturers are increasingly listening to customers like Varadarajan, a fact which has got reflected in the product introductions in the audio segment over the past one year.

Accounting for nearly three-quarters of all product introductions in the home audio segment this year, six-speaker systems dominate the product introductions by major brands this year. "People are definitely going to build their entire home entertainment around one central video and audio system," says Gunjan Srivastava, head of Audio at Philips India. The company will have rolled out eight new models of its home-threatre range before the year is out.

"The Home Theatre segment overtake the traditional Hifi systems in sales in the next 12 to 15 months," Srivastava says. The trend is already visible in the sales-charts of major manufacturers. Twelve out of every hundred rupees spent on home-audio products this year in the country is expected to be on six-speaker systems.

According to a recent industry survey, the audio Home audio segment grew by around 36 percent this year, almost all of it contributed by the HT segment which grew at a spectacular 386 percent.

"There is a perceivable shift in sales," agrees Ravinder Zutshi, deputy MD of Samsung-among the first to introduce high-powered, affordable six-speaker systems in the market.

"For example, last year, Home Theatres accounted for just around 5 per cent of our home-audio sales while this year it is around 30 per cent! In 2006, we expect it to be around 60 percent," he says.

While part of the huge jumps may be the result of the company's product composition (the company has only five models of DVD Hi-fis compared to eight variants of Home Theatres carrying a higher average price,) thetrend is visible in other brands too.

Says Srivastava of Philips, "In term of volumes, theatre models accounted for around 15 per cent last year, but will reach around 20 this year. In value terms, the figure should be higher at around 30 per cent of our total revenues from home-audio products this year."
 

MEGAWATT SOUND Six-speaker systems, what's on offer from mainstream companies
Brand	No of models	Price range*	Power range#
Sony	15	15.9-100	400-1000
Samsung	9	13.9-68	255-900
LG	8	11-60	85-700
Philips	9	7-35	94-900
*Price in Rs '000. All MRP/list price, dealer price varies.
#In RMS Watts