Consumer Electronics Manufacturers Retail Strategies Could Be Risky

Bypassing their existing distributors and retailers could prove successful for some, but might present challenges for others.

Oyster Bay, NY - July 26, 2006 - Major manufacturers of consumer electronics

equipment are embarking on a strategy that will disrupt traditional CE
retail networks, and may expose them to new risks, according to ABI
Research.

Companies such as Sony, Dell, Bang & Olufsen, Philips, and Pioneer are
establishing chains of own -brand retail stores and kiosks. Apple went down
this road years ago: today it has about 125 Apple stores worldwide, which
account for about 20% of the company's revenue. Dell has over 160 kiosks in
malls. Sony is partnering with Zoom Systems to deploy vendor kiosks,
targeting virtually all the leading malls in the US.

'OEM storefronts and kiosks represent a major change that will disrupt the
current retail ecosystem,' says research director Vamsi Sistla. 'Bypassing
their existing distributors and retailers could prove successful for some,
but might present challenges for others.'

Their motives are clear. Most of these vendors already have significant
online sales, and want fresh fields for expansion. They can provide a richer
and more customized experience for shoppers than the major retail chains
can. They can control and protect their brands: if consumer demand falls, an
OEM can take more effective countermeasures via its own outlets, while
maintaining better control of margins. And if appropriate, they can partner
with other vendors to offer complementary products and accessories.

But there are risks as well. For example, retailers' stock prices are partly
determined by their bricks -and -mortar performance. Wall Street sets share
prices using parameters such as the number of stores added or shut down, and
how much revenue per consumer the stores generate. By opening their own
stores, OEMs -which were previously rated on their ability to design and make
innovative CE products -subject themselves to new kinds of judgment from
financial markets.

OEM -owned outlets represent permanent cost centers, and must perform well
year -in and year -out. 'Stores mean ongoing operational costs as well as
infrastructure,' Sistla notes. 'Anybody can make money when times are good,
but when economies contract, retailers are the first to be tested. Some will
remain profitable, others may not. With this strategy, OEMs may be trying to
'boil the ocean.''

OEMs Launch Disruptive Retail Strategy: Their Own
Storefronts', the latest market update in ABI Research's Consumer
Electronics Research Service, discusses these issues in detail, and
includes detailed forecasts for all the leading CE device categories: HDTV,
HD -DVD players, PVRs, game consoles, portable audio and video players,
multi -room AV receivers, iPod Hi -Fi stations, iPod bookshelf systems and
more.

Founded in 1990 and headquartered in New York, ABI Research maintains global
operations supporting annual research programs, intelligence services and
market reports in broadband and multimedia, RFID and M2M, wireless
connectivity, mobile wireless, transportation and emerging technologies. For
information visit www.abiresearch.com, or call +1.516.624.2500.

Featured Product

Introducing the revolutionary Comelit Visto Smart Doorbell

Introducing the revolutionary Comelit Visto Smart Doorbell

The Visto Doorbell is a new Smart Doorbell from Comelit which combines a modern Italian design with all of the basic features you are looking for in a smart video doorbell. In fact, it is so smart that it can use the 2 wires from your existing doorbell and pass both the power and the data signals. This solves the common problem of having poor wifi coverage all the way at your front door. The Visto also has built in night vision, video recording on a SD card and in the cloud, motion detection, and multiple mounting options including an angle mount. The second thing we are introducing is the Visto Dealer referral program. Because we only sell through the Professional Distribution channel, we want to give our dealers who buy in that channel extra incentives to sell our product. For any security dealers or installers who go on our website www.vistodoorbell.com, and sign up for our program, we will offer the following: - Free referrals to customers in your area - Cashback program - 10% discount during the 1st month of the launch - Free Visto t-shirts and gear - A chance to win a trip for 2 to Venice, Italy Its that easy. Let us refer customer to you and get paid in the process. All while selling a wonderful Italian designed smart doorbell which is innovative and easy to install. So all dealers should protect the pro-channel and install products like the Visto which are made and sold only at your friendly local security and low voltage distributors.