Vision - November/December 2008 - (Page 38)

newsline association news & views I sourced products overseas as far back as 1972. There are always challenges, of course, but one that is often the most daunting is that smaller OEM factories tend to lack a culture of strong middle management, and their strategic view of business is usually overshadowed by short-term necessity and opportunities. Also, prices of products made offshore are rising rapidly, due to material shortages, energy costs, transportation costs and rising wages. As an example, until recently we purchased three surround sound products from Finland. Their original prices were negotiated when the U.S. dollar traded at $0.98 per Euro. During the course of their product life, they saw a 60 percent increase in FOB price, attributable solely to the weakness of the U.S. dollar. How does fair trade affect your business? Overseas legislation poses daunting administrative burdens on U.S. companies and in some cases risks exposure of our intellectual property to local businesses. Legislation and directives in key regions often function as a de-facto trade barrier by raising our costs, suppressing our competitiveness and unfairly restricting sales opportunities. Fair trade levels the playing field and enables us to compete on our merits. I appreciate that CEA remains a vigorous advocate against trade barriers. Tell me about the overseas demand for U.S.-made high-performance audio. The more affluent and sophisticated consumers in many overseas markets value premium American brands of high- performance audio. However, some American companies are reluctant to sell their products in certain markets. One large country, for example, requires that all products submitted for their mandatory compliance testing is accompanied by design documentation which exceeds what is required by most other countries or regions. This documentation could reveal enough about a product’s design that, if it “fell” into the wrong hands, such as a favored local business, it could be brought to market quickly and at lower cost, piggybacking on the applicant company’s R&D. So American companies risk having their intellectual property revealed to a lowercost competitor, and this is absolutely another barrier to fair trade. • www.ce.org sbc member profile Small Business Speaks Out on Free Trade Small businesses often are the most affected companies by international trade laws. They sometimes lack the resources or the voice to speak out on how these laws affect their bottom lines. CE Vision sat down with Richard Schram, CEO of Parasound, an active CEA member for more than 15 years. In addition to serving on the Audio Board and participating in the Small Business Council (SBC) and countless volunteer efforts, Schram also is involved in CEA’s Free Trade campaign. What are you hearing from customers and potential customers? Some of our customers are telling us their overall sales are down 30–45 percent from the same period last year. The market is weak now because so much spending over the last few years has been tied to inexpensive sources of money and easy credit that are suddenly unavailable. Consumer confidence is also down, and as a result many high-profile retailers are promoting and discounting aggressively in a desperate attempt to attract customers. This promotion-heavy climate within the industry makes it even more challenging for our specialized retailers and custom installers to sell traditionally undiscounted product. What do you consider your biggest challenge in your business and the industry? It’s the same challenge I’ve felt all along: that our industry has not communicated in a meaningful way to broaden our audience and create excitement and demand. We’ve achieved minimal success in positioning our products as aspirational purchases. I am also concerned about product support. Specifically, component parts used primarily for high-performance audio are being discontinued at an increasing rate and without direct substitute replacements. This phenomenon often results in significant re-engineering and re-tooling expenses that have an adverse impact on our profits. Parasound sources and manufactures overseas. What challenges do you find associated with this? Parasound has manufactured overseas extensively since 1982 and in my previous career CEA Events EHX Fall November 4–7, 2008 Long Beach, CA CES New York Press Preview, featuring CES Unveiled@NY November 11, 2008 New York, NY CEA 861/HDCP PlugFest II November 16–21, 2008 San Francisco, CA Future of Television November 18–19, 2008 New York, NY CES Unveiled: The Official Press Event of the International CES January 6, 2009 Las Vegas, NV 2009 International CES January 8–11, 2009 Las Vegas, NV CEA Winter Retreat February 5–7, 2009 Jackson Hole, WY Digital Music Forum East February 24–25, 2009 New York, NY Greener Gadgets Conference February 27, 2009 New York, NY EHX Spring 2009 March 12–13, 2009 Orlando, FL CEA Washington Forum April 22–23, 2009 Washington, DC Digital Patriots Dinner April 22, 2009 Washington, DC 38 November/December 2008 http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - November/December 2008

Vision - November/December 2008 Contents Shapiro's Spectrum In this Issue The Economist C4 Trends Going Global Visionary CES Unveiled Eco-Intelligence Is Vital in a Sustainable Global Market XGP— A Game Changer Enhancing the Tech Experience High-Definition Decade Public-Private Partnerships CEA Newsline Tech Speak Tech Policy Eye on Business Market Insider Just the Stats

Vision - November/December 2008

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