Audio Sales Roller Coaster For 2001?

According to the latest statistics from the Consumer Electronics Association (CEA), overall consumer electronics sales for 2000 posted gains of 7% over 1999, reaching $8 billion. However, overall audio sales at the end of 2000 dropped as compared with November 1999, declining 5%, with $854 million in revenues for the month. The CEA says that sales to dealers of separate audio components also declined in November dipping around 4% as compared to the same period in 1999, but overall, sales of separate audio components have had a positive year rising 7% to $1.4 billion in revenue thus far.

The CEA also reports that audio systems held even with the prior year, with sales dollars equaling $270 million in November. Within this category, home-theater-in-a-box continued its rapid growth rate with a 47% increase. For the year overall, audio systems are up 6% to $2 billion, says the CEA.

Sony Corp. revealed last week that, by the end of March, it plans to reduce its inventories by more than $1.28 billion to prepare itself for a possible drop in demand from the US market. In a recent statement reported in Japan's Nihon Keizai Shimbun financial newpaper, Sony's Teruhisa Tokunaka says, "Inventory assets are exceeding the optimum level because we failed to foresee the rapid slowdown in the US market, which makes up one third of Sony's electronics sales."

Japanese audio manufacturer Aiwa, of which Sony owns 50.5%, is also feeling the pinch. Last week the company revealed that the majority of its top executives will be leaving in reponse to worse-than-expected losses. Aiwa blames its troubles on a dearth of new products and increased competition in the slowing marketplace. The company says that it expects to lose $319 million in the 12 months ending next March, because sales have declined 10.4% since last year. Consequently, Sony says that it is considering financial support for the ailing Aiwa. A spokesman stated, "We are considering giving financial support to Aiwa in a range where we can provide it. But we have yet to decide details."