Audio & Video Equipment Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 460 audio and video equipment manufacturers in the US produce electronic audio and video equipment for home entertainment, motor vehicles, and public address and musical instrument amplification. Products include stereo equipment, speaker systems, televisions, household-type video cameras, jukeboxes, microphones, and amplifiers for musical instruments and public address systems. Large firms typically enjoy scale benefits, while small firms compete by offering specialty products.

Dependence on Foreign Contract Manufacturing

Although US firms play a significant role in the domestic audio and video manufacturing market, foreign production in countries with lower labor costs is the norm.

Inventory Obsolescence

Rapidly evolving technology and fast product development cycles, which characterize the audio and video equipment manufacturing industry, can lead to inventory obsolescence.

Industry size & Structure

The average US audio and video equipment manufacturer operates out of a single location, employs about 20 workers, and generates $7 million annually.

    • The US audio and video equipment manufacturing industry consists of about 440 firms that employ about 8,900 workers and generate about $3 billion annually.
    • The industry is concentrated; the top 50 companies account for 78% of industry revenue.
    • Large firms are generally the US subsidiaries of foreign companies, which include Samsung, Sony, and LG Electronics. Multi-national conglomerates dominate the industry. Large US companies include Bose and GoPro.
    • While television manufacturing is included in the industry, foreign-owned firms produce the vast majority of TVs sold in the US. TVs assembled in the US typically use parts from abroad.
                                    Industry Forecast
                                    Audio & Video Equipment Manufacturers Industry Growth

                                    Coronavirus Update

                                    Nov 4, 2021 - Asian Factories Restarting
                                    • Asia’s factory activity increased in October as COVID-19 infections decreased, but rising input costs, material shortages, and slowing Chinese growth cloud the outlook. Although US firms play a significant role in the domestic audio and video manufacturing market, foreign production in countries with lower labor costs is the norm. China’s factory activity expanded at its fastest pace in four months in October, the private sector Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed. A PMI sub-index for output showed, however, that production shrank for the third straight month due to power shortages and rising costs. Factory activity expanded in Vietnam, Indonesia, and Malaysia in October as operations gradually normalized after being hit by shutdowns caused by a spike in COVID-19 infections. Taiwan saw manufacturing activity growth accelerate on robust chip demand, while Japan’s factory activity expanded at the fastest pace in six months in October in an encouraging sign for the world’s third-largest economy. Experts note, however that supply/demand equilibrium will not return soon. “While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and resulting supply shortages further afield are set to persist,” said Alex Holmes, emerging Asia economist at Capital Economics.
                                    • About 5% of semiconductor manufacturers surveyed by IPC said that they expect the semiconductor shortage to be over by the end of 2021. About 58% said that the shortage will last until at least the second half of 2022.
                                    • About 80% of chip makers say that it's become hard to find workers, many of whom have to be specially trained to handle the highly toxic compounds used in semiconductor manufacturing. The problem is worse in North America and in Asia, where more companies are reporting rising labor costs compared to those in Europe.
                                    • The CEO of wireless audio equipment manufacturer Sonos expects strong sales to continue post-pandemic. Patric Spence says that the company is riding three secular trends: the "golden age of audio," direct-to-home movie releases, and a hot housing market. "A lot of people now have new flexibility and freedom to work anywhere and so they're moving, they're setting up a new home and that's perfect for Sonos," he said.
                                    • The COVID-19 crisis drove digital media consumption to new heights, while traditional media stagnated, according to eMarketer. Time spent with digital increased 15% year over year in 2020 to 7 hours, 50 minutes daily. Connected TV usage increased 33.8% year over year to 1 hour, 17 minutes per day. Subscription streaming usage increased 33.9% to 1 hour, 12 minutes per day. Digital audio usage increased 8.3% to 1 hour, 29 minutes per day. eMarketer predicts that these formats will claim even more daily media time going forward. Traditional TV, social media, tablets, and desktops/laptops will likely decrease year over year in 2021.
                                    • Many legal experts agree that corporations can require COVID-19 vaccinations for employees. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with the union before mandating a vaccine.
                                    • TV remains the primary source of entertainment for 92% of Americans, according to “Content in the COVID-19 Era: Current Realities and Future Opportunities” report from the Consumer Technology Association (CTA). The report also finds that 60% of video content viewing time takes place in front of TV screens; the rest is on smartphones, computers and tablets. “Consumers are watching more content and watching longer, as new innovations in format and delivery draw in millions of first-time users," said Sayon Deb, manager, Market Research, CTA.
                                    • Production of audio and video equipment increased 5.3% year over year in September, according to the Federal Reserve.
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