Residential Sales Through Home Systems Integrators/Installers Grew 18% In 2005; Sales Of Multiroom Audio And Home Theater Systems Surpass Dealer Expectations

July 25, 2006

Installing dealers had total sales of $7.3 billion to residential customers in 2005, an 18% increase over 2004's $6.2 billion, according to Parks Associates' 1Q06 Installing Dealer Survey. Consumer demand for multiroom audio, home theater, and associated control systems was largely responsible for the strong growth in the dealer channel. Audio systems were the single largest product category is 2005, generating more than $2.1 billion in residential sales, with Russound and Denon as the top brands for audio components and SpeakerCraft as the most popular brand of speakers. "Multiroom audio exceeded our estimates by nearly 9%, and home theater sales beat expectations by about 8%," said Bill Ablondi, director of home systems research at Parks Associates. "There are several factors driving this demand. More affordable systems are broadening the market to include more midrange homes, more builders are aggressively marketing entertainment amenities, and, most importantly, more home buyers want to incorporate entertainment systems into the infrastructure of their home." Installing dealers are also optimistic about the potential for growth in 2006, according to 1Q06 Installing Dealer Survey. Nearly 40% of dealers expect to see their businesses grow by more than 20% in 2006, and 30% project growth of 11-20%. Only 4% expect to see a decline in business in 2006. "The installing dealer channel is expanding, both in numbers of integrators/installers and in the sales each firm generates annually," Ablondi said. "We're seeing the evolution from a custom-only channel to one which is beginning to embrace pre-packaged systems in an effort to expand its reach in the market." The 1Q06 Installing Dealer Survey is part of Parks Associates' Installing Dealer ePanel Program, which collects regular feedback from electronic systems integrators, designers, and installing dealers across the U.S. Surveys are conducted online, and each client assists in developing the questionnaire. The ePanel Program is an affordable, efficient, and accurate way to increase understanding of the installing dealer channel. For additional information on the 1Q06 Installing Dealer Survey or Parks Associates' Installing Dealer ePanel Program, visit http://www.parksassociates.com About Parks Associates: Parks Associates is a market research and consulting firm focused on all product and service segments that are "digital" or provide connectivity within the home. The company's expertise includes home networks, digital entertainment, consumer electronics, broadband and Internet services, and home systems. Founded in 1986, Parks Associates creates research capital for companies ranging from Fortune 500 to small start-ups through market reports, multiclient studies, consumer research, workshops, and custom-tailored client solutions. Parks Associates also hosts several fall events and co-hosts CONNECTIONS(TM) (in partnership with the Consumer Electronics Association) each year.

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