One of the challenges facing audio equipment manufacturers as we enter the Internet age is how to handle online retailing of products to consumers. A manufacturer that has so far shunned mail-order in favor of bricks-and-mortar retailing runs the risk of alienating its established distribution base by jumping online ("mail order with a web address"), where traditional territorial sales boundaries are often rendered meaningless.

Last week, Philips subsidiary Marantz and Hifi.com, sister company to Cambridge SoundWorks and a wholly owned subsidiary of Creative Technology, announced an exclusive agreement by which Hifi.com will be the "first and only e-tailer" of Marantz high-end audio and video products. Marantz says that this agreement marks a distinct shift from the manufacturer's prior strategy of not approving any company to sell its products online.

Commenting on why they have finally broken their online silence, Charlie Boornazian, VP of sales for Marantz America, says that "After careful scrutiny and an extensive process of determining our Internet strategy, Marantz is pleased to name Hifi.com our exclusive online partner. We believe Hifi.com will be the online equivalent of the brick-and-mortar audio/video specialty stores, with the service and expertise that have helped build the Marantz brand name."

Hifi.com says that it will be re-launching its website in early October, and claims it will be "dedicated to being the leading provider of home entertainment editorial content, audio, video, home theater, and multimedia hardware." Tom Hannaher, Hifi.com vice-president of merchandising, says "We feel honored to have Marantz name us as their exclusive online retailer of the company's audio/video products. And with the announcement prior to the Hifi.com launch, we're proud to have Marantz's vote of confidence in our online strategy."