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Insight(HKTDC Electronics, Vol 01,2004)

Vol 1, 2004

Product Features

DVD/VCD Players
Touching Tomorrow Today

The Sound Of Success

Headphones& Earphones
Sounds Great!

Waterproof Electronics
All-Weather Friends


The Sound Of Success

With digital camcorders, cameras, and Digital Versatile Disc (DVD), Mini Disc (MD) and MP3 players becoming more popular, accessories manufacturers are moving upscale to offer ODM and own-brand designs.

"The positive demand for DVD players has been a major driver in the accessories industry for the last two years and is likely to continue," predicts Adam Chow, sales and marketing general manager of publicly listed electro-acoustic accessory products producer Fujikon Industrial Co Ltd.

"Today, consumers want quality home entertainment systems and are looking for enhanced features such as surround sound to maximise the acoustic experience."

Indeed, despite the seemingly insatiable desire for computer and telecommunications headsets and earphones, the audio business is providing a major source of business for many manufacturers.

"While demand for our cell phone accessories is certainly growing, our audio lines are still our largest earner, followed by telecommunications and multimedia," notes Chow. "Our wireless, in-car and headphones business is particularly strong."

However, he recognises that competition is 'tough' at the entry level, with increased competition and low profit margins encouraging larger producers to move into upmarket products and added services, including ODM and own-brand designs.

Quality sound is not limited to the home, Chow maintains, noting the growth in car entertainment accessories. "With the increasing popularity of seven-seater vehicles in the US, consumers are seeking in-car systems to entertain the children on longer journeys," he adds. "We see strong potential for double-digit growth in this sector over the next two years."

Similarly, the increasing popularity for MP3 portables is sparking a surge in sales of comfortable headphones and earphones. "It's more important to have quality earphones to heighten the reception and experience of digital music," explains Chow.

Keeping up with new technology trends such as these has seen local companies offer a wide variety of wireless Bluetooth accessories, which Chow believes will continue to flourish "providing product prices drop to more affordable levels".

All these positive trends pushed Hong Kong's total AV sector exports up by 30% in the first six months of 2003, following a hike of 26% in the previous year.

While precise figures for headphones and earphones aren't available, total exports of AV equipment for January-June 2003 totalled almost US$10m, of which parts and accessories accounted for 54%. Indeed, the latter category jumped 35% in 2002 and 32% in the first half of 2003, making it a vital industry growth sector.

Fujikon, like many Hong Kong companies, is fuelling this growth by researching new ways to enhance the acoustic performance of its speakers. "For example, we are looking at new hi-tech material to minimise distortion in our car accessories," explains Chow.

"We are also employing a new rubberised material for added comfort for some of our headphones and headsets, as well as using different angles and diameters for ear housings."

Other interesting innovations include Fujikon's new range of one-touch retractable hi-fi stereo headphones, which are equipped with an innovative cord management system located in the earpiece.

The company has also introduced a splash-proof stereo headphone with soft, bendable ear hooks to provide added convenience and comfort.

"Other innovations include our noise cancellation headphones for frequent flyers and professional high-performance studio headphones that are ideal for DJs," notes Chow.

Style is an equally essential consideration when it comes to AV accessories. "There is a trend now to combine materials, such as metal, and we are using fabric for cable covering," explains Chow. "We also offer consumers the option of changing colours and external parts."

Fujikon keeps prices competitive by manufacturing at a 91,628-square-metre factory in Dongguan on the Chinese mainland, which can produce three million headphones and earphones, 500,000 headsets, 300,000 microphones and 300,000 speaker systems a month.

This capacity for fast production and short lead times enables the company to serve international customers worldwide, including such industry giants as KOSS, NEC and Fujitsu.

Regionally, total AV equipment exports to the US remained static in the first half of last year, while other pivotal markets such as Europe, which accounted for 16% of exports, were bullish. For example, exports to Europe leapt 70%, while those to Germany surged 92% and to the Netherlands 98% in the first half of 2003.

Similarly, sales of AV equipment to Japan and ASEAN (Association of South East Asian Nations) markets were up 51% and 18% respectively in the first half of 2003, proving that the superior technology, top quality and competitive prices of Hong Kong's headphones and earphones are music to buyers' ears.

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