Klipsch, LG Providing Marketing, POP Muscle Behind Fall WiSA Rollout
Wireless Speaker and Audio (WiSA)-compatible products are expected to be in more than 1,000 retail storefronts worldwide and in the U.S. this year based on two “dominant” speaker brands, said Summit Wireless CEO Brett Moyer Wednesday on a one-year update webcast after the company’s August 2018 initial public offering. Ten to 13 WiSA products are expected to be in market for the holidays, he said.
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Klipsch expects to be in 600 storefronts with WiSA point-of-purchase displays, including 350 in Best Buy’s Magnolia sections featuring LG TVs, Moyer said, and Enclave Audio is in more than 700 retail locations. LG is supplying extensive marketing and training support to dealers, he said. Moyer and WiSA Association President Tony Ostrom unveiled a road map for marketing and training material that will roll out to retailers over the next four-to-eight weeks, before the holiday season.
WiSA’s member list doubled to 60-plus year on year, including seven TV makers that plan to offer WiSA-ready TVs and a broad list of speaker companies. Moyer called WiSA-ready TVs the “beachhead” for expanding the WiSA market.
Products launching this fall include multiple speaker systems from Harman and Enclave Audio and LG WiSA-Ready TVs that become the control screen for WiSA speakers when connected to a WiSA USB dongle, said Moyer. Solutions will largely be available for under $1,000 to $5,000, “where you start hitting the volume,” he said. Two dongles are in the market, and WiSA expects one or two more by year-end “to help open up the market around the TVs.”
In Q4, Summit will ship chips for new product launches due in Q1 and Q2 and begin to get “replenishment orders” from 2019 products that will build quarterly revenue, Moyer said. Revenue for the most recent quarter was in the "$350,000 range," about $20,000 lower than a year ago, he said; the company expects to “build the revenue curve” in Q4 forward. Moyer called revenue in Q1-Q3 all “single product shipments to new production starts,” with the exception of those from Bang & Olufsen gear and Harman’s first WiSA product.
On a question on retail audio attach rates for TVs, Moyer said feedback from manufacturers including B&O, Samsung, Vizio and Xbox shows 25-35 percent. Best Buy’s Magnolia is a leader in add-on sales, he said, and WiSA’s presence there “sends a message to everyone else.” Ostrom said drivers for attachment sales are content availability, a desire for better sound quality and simplicity -- things WiSA “brings to the table.”
WiSA will have a presence next week at Nationwide’s Prime Time show, said Ostrom, noting the buying group has 3,500 members with $15 billion in annual revenue from 11,000 storefronts. Four booths at the dealer show will feature WiSA displays around LG TVs, he said, including ones from Klipsch and Enclave.
On WiSA's plans for wireless multiroom audio systems -- a use case WiSA once touted -- Moyer said, "We took it off because that was not ever our focus; we were testing it as an extension." The company doesn't see multiroom audio as appropriate for WiSA technology and it doesn't want to compete with existing solutions, he said.
WiSA technology built into a smart speaker or sound bar would be royalty revenue for Summit vs. stand-alone speakers that generate module revenue, Moyer said. Average selling prices of modules will come down as they move from custom to standard Wi-Fi chips, he said.
In a call after the webcast, Moyer told us he doesn't believe the 10 percent List 4A Section 301 tariffs set for Sept. 1 on speakers produced in China will have an impact on WiSA's fall rollout, but it will hit Summit's customers' profits and losses. Klipsch could likely easily absorb tariffs in a $2,500 surround-sound system, but at the entry level, a 5.1-channel speaker system that was going to be $799 might bump by $100 to $899, he said. "What's the demand curve on a $100 difference?" he asked: Setting up a WiSA system "is really compelling when you go through the experience, plugging in the speakers, and bam, it's there."