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GfK Retail and Technology: Audio Systems Market Suffers Tough Second Half of 2008 (1/4/2009)

The Audio Systems market in the UK, consisting of Micro, Mini, Midi and Home Theatre systems fell by 3% in volume in 2008 compared to 2007. With a slightly higher proportion of sales coming from Home Theatre, overall value dropped by just 1%. In line with much of the rest of the Consumer Electronics market in 2008, the first half was much more positive than the second with the most notable declines coming in the last four months of the year. December sales dropped by 13% in terms of volume and 8% in terms of value.

Key sector movements in 2008 reveal a 15% value decline for Micro systems with the average price now tracking at just over £73. The Mini and Midi markets have grown with DAB increasing as a proportion, particularly within the Mini market from 28% of value in 2007 to 39% in 2008 and the average price of a DAB mini in December was £151.

Linked to the slowdown in TV sales, the Home Theatre market has also slowed. Nevertheless despite a value loss of 11% in December, total annual sales increased by 3% rising to £144 million at 621,000 units. Though this is not quite up to the peak of sales in 2002 of 746,000 this is still a level 20% higher than the low of 514,000 in 2005. In terms of pricing developments, overall average price has maintained reasonable stability, down just 5% in 2008 but with higher value products such as Soundbars and Bluray set to penetrate the market further, there are additional stimuli within the market place.

Aside from conventional audio systems the market for Audio servers and clients is also a growth area increasing by 47% in value in 2008.

The HIFI Separates sector has lost none of its appeal. Even if there was a 15% reduction in sales units, market turnover, at £200 million, was equivalent to 2007. The products that were most responsible for this relatively positive result (where the effects of the global crisis were felt in just about every other CE sector) were Receivers, usually the "without speakers" variety, 18% of which was accounted for by products retailing at over £500. There were significant volumes generated by the cheaper products with speakers that were a popular choice in non-specialist multiple retailers. Even if Amplifier sales declined, they contributed a further £14 million to the £500+ price segment.

Loudspeakers accounted for half of HIFI turnover (exactly £100 million), but the most touching result was the 9% increase in market value of Turntables. Against all odds, vinyl singles and albums are still being produced (sometimes being bought by young consumers). At the same time, their older counterparts are buying Turntables with a USB connection that allows them to copy precious vinyl collections!

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