Market Mysteries

I'm just home from a vibrant CEDIA Expo 2008 — an event SVC is covering in detail online and in our upcoming October issue
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Market Mysteries

Sep 1, 2008 12:00 PM, By Michael Goldman

I'm just home from a vibrant CEDIA Expo 2008 — an event SVC is covering in detail online and in our upcoming October issue. I saw a busy show floor and brisk activity at the booths I visited. What's harder to gauge is the state of the residential-contracting industry in these turbulent economic times.

Over lunch at CEDIA, Extron Electronics Director of Marketing Communications Mike Andrews insisted that his company's business is brisk these days. Residential, of course, is not Extron's core market, which is Andrews' point — Extron produces hundreds of products for most major market segments. Residential and small corporate environments are two of those growing segments — hence the company's evolving interest in the world of CEDIA. He says manufacturers with diversified product lines targeting multiple markets are much better suited to ride out economic downturns than niche operators. It seems to me the same is probably true of contractors and installers, as well.

Sales in certain categories are particularly strong these days, as Jeff Sauer's “Picture This” column on p. 16 of this issue makes clear regarding flatpanels. Then, just as we went to press, CEDIA announced results of its second annual 2008 Benchmarking Survey, which suggests positive economic news for electronic-systems contractors. And yet, the surveys in Sauer's column refer to Q1 and Q2 numbers from this year, and the CEDIA study examines 2007 revenue compared to 2006 revenue. The economy is in such flux, it's hard to know if we can extrapolate from all those numbers what is actually going on at this exact moment, or what's likely to happen in coming months.

Therefore, it's reasonable to put stock in the gut wisdom of those I respect. At CEDIA, many wise souls I spoke with suggested things are OK, more or less, for the time being. As one friend suggested, however, the economic landscape for the professional AV community is changing, and it will continue to do so. “The low end,” he told me, “is where it is at, both in terms of products and services.”

In other words, ultra-sophisticated, expensive, high-end jobs and technologies will always retain their lucrative niches on this landscape, because those who can afford them are usually unaffected by market fluctuations. But for the rest of us, affordable solutions of all descriptions are in high demand, regardless of economic statistics — or, perhaps, because of them. This is the logic behind our debut earlier this year of Connected Home as a new layer to our Residential AV coverage (see svconline.com/connectedhome). We're looking at consumer technologies and prosumer approaches — investigating how they are, or might be, wedded to the professional installation paradigm. CEDIA suggested to me that we are wise to investigate this trend.

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