Installing Dealer Channel on Path to Reach $5.7B in 2003

Continued growth of new construction coupled with consumer demand for latest entertainment systems projected to drive sales in 2003

October 20, 2003 - - Parks Associates projects that the installing dealer channel in the U.S. will generate sales of $5.7 billion in 2003, an increase of 8% over 2002, with $3.2 billion coming from residential markets. Parks Associates developed estimates of channel volume and projections of sales growth based on recent surveys from its Installing Dealer ePanel.


"There are approximately 2,900 installing dealers in the U.S. serving both residential and commercial markets," said Bill Ablondi, director of ePanel research for Parks Associates. "Not all are members of the Custom Electronic Design & Installation Association (CEDIA), a trade association of companies that specialize in planning and installing electronic systems for the home, but CEDIA members typify the residential installing dealer."
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Analysis of feedback from installing dealers indicates that on average, dealers generated about $1.8 million each in sales in 2002, 70% to 75% from custom installation projects, 80% of which were for residential customers. Parks Associates projects that in 2003, revenue from residential installation projects will total $3.2 billion. On average, over all product categories, half of that will be for installation services and half for equipment.

"The installing dealer channel is growing in importance to mainstream consumer electronics manufacturers," said Tricia Parks, president of Parks Associates. "Although this channel represents a small portion of the total $100+ billion consumer electronics market in the U.S., it is the channel serving adopters of leading -edge technology in the home. As such, this channel is where innovations are tested to see if they are worthy of the 'prime time' mass market."

Whole -house audio, home controls, and home theater lead all other product categories in terms of revenue - each generating well over a billion dollars annually. Other major categories include structured wiring, lighting, security systems, PC networks, power quality/surge protection, and telephone systems.

"There are some exciting new products teeing up for market entry," Ablondi said. "For example, we expect to see media servers become the next must -have component for entertainment systems. Internet -connected audio and video systems will help fuel demand, and installing dealers will be there to capitalize on the opportunity."

Parks Associates' Installing Dealer ePanel is comprised of principals from installing dealerships across the U.S. who have agreed to participate in periodic surveys focusing on the products they are supporting, those they're not, and the rationale behind their decisions. In addition to product -related research, Parks Associates profiles participating dealers with the goal of understanding how their business models are changing.

For information about Parks Associates' Installing Dealer ePanel, visit www.parksassociates.com or call 972 -490 -1113.

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 two executive seminars, both part of the Fall Focus series, and co -hosts CONNECTIONS(TM) (in partnership with the Consumer Electronics Association) each year. www.parksassociates.com.

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