China makers of home theater systems are taking two directions to spur sales in the mature line. Suppliers of hi-fi varieties are shifting to the upscale segment, and toward this end are enhancing power output and audio specifications to heighten product differentiation. Manufacturers of multimedia versions are emphasizing entry-level types. Some players in this category are offering digital and mini systems while maintaining home theaters in a box.
One of the companies that have released hi-fi home theater systems is HiVi Inc. The maker’s Swans2.3B model constitutes two front left/right main speakers, one center speaker, two rear surround speakers and two power subwoofers. Its single front main speaker has 16 isodynamic ribbon tweeters that work in conjunction with 16 2in soft-dome midrange drivers and four 6.5in bass-midrange drivers. These drivers are arranged in a true linear sound source configuration, while the center and rear speakers are perfectly matched with the system. Each power subwoofer consists of a 15in woofer and a 260W amplifier.
The selection from China is dominated by 5.1-channel systems. Models with 2.1 and 7.1 channels are also available, but in smaller volumes. Although next-generation HD formats such as Blu-ray are on the rise, supply of 6.1 or 7.1-channel units remains limited.
R&D work on 5.1-channel variants, which many regard as a mature line, is generally centered on power output enhancement. For most enterprises, the thrust is to strike a balance between price and performance to match buyers’ requirements.
Suppliers are also enhancing aesthetics. Dongguan Alllike Electronics Co. Ltd, for example, designs its home theaters in a box such that the speakers match the look of the DVD player. The QY&Sub10L from Star Audio Co. Ltd has a high-gloss black piano finish.
Overall, manufacturers expect continued export growth. The top destinations are North America, the EU and Southeast Asia, each of which posted a 20 percent increase in shipments last year. Makers, however, are concerned sales will start declining as these locations reach saturation, particularly the first two. Many are therefore shifting their focus to emerging markets that reflected strong business growth in 2010. For example, Shenzhen Realtide Technology Co. Ltd’s home theater system business grew 10 percent in 2010 thanks to climbing deliveries to Asia and South Africa. More companies are eyeing emerging markets such as Central and South America, the Middle East, South Africa, Russia and non-EU countries. They are designing products to cater to these areas.
Despite healthy exports, rising manufacturing costs and the appreciation of the yuan have impacted the profitability of most makers in China. The first is mainly due to increased spending on raw speakers, amplifier ICs, wood boards and plastic, and labor.
Political turmoil in the Middle East has triggered a surge in crude oil rates, which pushed up the cost of plastic. Rates for ABS and HIPS jumped by about 3 and 6 percent, respectively, in 1Q11.
Supply in China continues to be dominated by 5.1-channel home theater systems, but buyers will find 2.1, 6.1 and 7.1-channel variants. Models from the first category suit audio surround formats such as the Dolby Surround Digital and DTS Digital Surround 5.1 channels supported by most DVD movies.
The majority of units are classified as entry-level or midrange, although a growing number of manufacturers are launching high-end types.
These upscale releases come with front speakers capable of greater than 100W power output at 8ohm, 95dB S/N ratio and 40Hz to 20kHz ±3dB frequency response. Their surround sound speakers boast above 50W power output at 8ohm as well. The S/N ratio and frequency range are 85dB and 60Hz to 20kHz ±3dB.
The subwoofers support more than 100W power output and 30Hz to 200Hz frequency response. Some high-end systems from HiVi and Qisheng carry THX certification, a hi-fi A/V reproduction standard for movie theaters.
Entry-level versions usually have less than 50W rms power output, 70 to 80dB S/N ratio, 4ohm impedance and 100Hz to 18kHz ±3dB full-system frequency response. Midrange types deliver 50 to 200W rms power output and 80 to 90dB S/N ratio. The impedance and frequency response are 8ohm and 50Hz to 20kHz.
A good number of China makers also produce home theaters in a box, which comprise surround sound speakers, an A/V receiver and amplifier, with the last two usually integrated into one unit. A DVD player is also included. These all-in-one solutions are suitable for use in the bedroom and other areas with limited space. The receiver is typically a multichannel amplifier, and incorporates an AM/FM receiver and a USB or card reader interface. Some entry-level models combine the amplifier with the active subwoofer. Most releases also come with a remote control and connection cables.
Industry giants such as Panasonic and Sony have rolled out Blu-ray home theaters in a box, but only a few China suppliers have followed suit so far.
The price determinants in this line are the raw speaker, cabinet material and surface processing. Makers of upscale home theater systems use wood veneer or piano lacquer finish for a sleek touch. Star Audio, for instance, utilizes real cherry or walnut wood veneer for the cabinets of its high-end models. Others turn to PVC veneer, lacquer or piano paint. Manufacturers of low-end units experiment with a plastic front panel, acrylic inlay and baking paint for surface treatment.
For the raw speaker, most companies adopt silk dome or hard metallic tweeter. As regards the latter, aluminum, titanium and beryllium dome variants are popular. The cones of entry-level and midrange drivers and woofers are usually made of PP, while higher-end categories have wool or fiber glass cones.
The cabinets of low-end home theater systems are typically ABS or HIPS. Those of intermediate releases are of MDF. For the structure, the common options are closed-end andphase reversal.
Most China suppliers can produce cabinets in-house. The process covers plastic molding injection, wood cutting, polishing and surface treatment. Raw speakers, on the other hand, are usually sourced from local providers. Only a few small and midsize operations have the capability to manufacture the part.
Model: QY and Sub10L
Note:This article was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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