Custom Turns a Corner
Integrators are heading to CEDIA Expo with optimistic attitudes fueled by improvements they’ve seen in their businesses during the last six months.
Although TV margins are stuck in the gutter, integrators said that vendor unilateral pricing policies and third-party online marketplace restrictions have brought some relief.
But their better bottom lines are mostly the result of devoting more resources, focus and training on IP technologies, security and its recurring revenue opportunities, and other solutions that extend beyond the traditional AV installation model.
Morshed Shahid, principal of Audio One, Dania Beach, Fla., said he has seen an uptick in medium-sized projects, which are slowly coming back. “We’re hoping large-scale projects will be at full swing, as they were before 2009,” he said.
Tom Doherty, principal of Doherty Design Group in Indianapolis, reported that new projects are on the rise in his area. “We’ve noticed an increase in future product potentials,” he said. “Architects and builders are meeting with new clients that are planning new work.
David Pidgeon, CEO of Dallas’ Starpower, noted that his business was “slightly ahead” for the year-over-year period, mainly with the help of audio and custom leather seating sales. Automation and outdoor solutions are also up, but TV price compression continues. “UPP efforts by manufacturers are starting to help, but even with UPP, the margins are certainly lower than we are used to,” he said.
Peter Cook, president of Automation Design + Entertainment in Portage, Mich., said new construction starts in his market have rebounded.
“When I looked last, we were up about 25 percent in the first half,” he said. “It’s hard to see through the fall, though, and it’s going to be up and down. That up-and-down nature is what’s hardest for dealers right now. If something happens in Europe that impacts our economy, or in the stock market, all of a sudden, clients start to get nervous and may hold off a little on a project or take longer to pull the trigger. But certainly, the smart home and security sides of our business are growing.”