At the annual fall meeting of New Age Electronics in Greenville, S.C., last Thursday, we sat down for an exclusive interview with New Age’s president, Fred Towns, to discuss the state of the company, the industry and what has changed with both since we last sat down at CES in January. What follows is a transcript of that interview:
Dealerscope: I want to know what the mood has been here at the event so far, among dealers especially. Are people feeling good? What is the impression you’ve been getting?
Fred Towns: Right now, everyone seems excited about what we had to talk about. And now being here at the vendor fair, everyone is excited about what they’re seeing. So I think it’s bringing some fresh air to the fact that that wow, there’s some amazing products that we should be looking at. And I think the validation of hearing from the key leaders from the presentation today, when we had our roundtable discussion, really kind of reemphasized the areas of focus. You know, having Stephanie Dismore from HP, and C.J. Bruno from Intel, all of this is talking about the computing side of it, and talking about smart watches.
I really think that it’s really telling people that these are real businesses. We watched what Apple has said most recently. They validated that a big screen is really important on a phone. They called it a “big phone” or “phablet.” And the fact that a device like a smart watch is going to be an important component even though they won’t have it until next year. They’re saying that something like that is real, and we’re trying to make sure we’re getting those great products into our customers.
DS: What are you sensing is selling this year? What are the new things- or the old things- what are you seeing as the hottest categories?
FT: So we still think the tablet area is going to be hot this year. I think that, and the two-in-one-type product, where people become more aware that wow, it’s a full-blown computer in a tablet format, with a keyboard, that’s going to bring a lot of comfort to people who have said ‘wow, I can do so much with my tablet, but I also have some computing needs.’ And now it’s going to enable them to think ‘that’s going to be my road warrior-type toolkit.’ So that’s going to be a great thing, and then the fact that many people are on their second iteration of the tablet, or the third, and they’re buying new modes, and they’re looking for better PCs with better horsepower, better processors, and faster speed. They like the technology of always-on.
When it comes to emerging categories, I think all of the peripheral-tech devices that connect into anything smart, are going to be very, very hot. I think even some of the sports-type products, sports camera products, are going to be hot. I think there will be a natural tendency to look to water-resistant, rugged-type products, that I think are going to be very, very hot.
DS: When you look at things like 3D printing or Internet of Things, and stuff that’s sort of seen as technology-of-the-future- are you seeing movement on that yet, or that more of something for 2015?
FT: I think it’s moreof a 2015 thing. I think most people are going to be exposed to that the technology exists, and I think the true users, like architects who are going to build models to scale, or people that are extensive hobbyists, they want to make a beautifully decorated cake with a unique figurine on it, are going to appreciate it. Or people who were once scrapbookers are going to try the new way of presenting things. But I think it’s more of a business application right now than when we see it, not as much as the consumer side of it. I think that will evolve, and you can probably envision that people will put a Christmas tree up, where they print out their Christmas ornaments, and then at the end of the year just crunch them and throw them away, and not have to store them and put them away. So I think it will be an evolution.
DS: What about 4K/Ultra HD? We’re another year into it, and you’re starting to see more and more retail availability. Do you get the sense that there’s demand for that?
FT: I still think that, maybe unfortunately, like with the era of 3D TV, that these new technologies are coming out, and there is somewhat of a limitation as to what to present with it, what you’re going to showcase with that product, and there’s still limited 4K-type product, or availability of technology to showcase it. People are always looking, when they buy TV products, to buy for the future, so I think as price points come down, and they emerge the fact that it’s that much of a better picture- don’t focus on the number, focus more on what they’re seeing, and the experience of a better set- I think people will buy to get the better set than the one they’re replacing.
DS: Now you’re hearing some things- and I don’t know that there are raw numbers to back it up- that tablets have hit a wall, that people have bought them and they’re not buying new ones. I know your answer before was sort of the opposite of that- you don’t get the sense that tablets have hit a wall?
FT: You know, at some of the low, low pricing points, there’s going to be a buyer somewhere in the U.S. who probably doesn’t have a tablet yet. And they’re going to say ‘I like the features on my smartphone, but now I’d like to see it on a bigger screen.’ But I also think with some of the offerings- I showed the new HP piece, which is a phablet-type product, a phone and a tablet in one, with lifetime data, and things like that. That’s going to fall in and consume a little of the tablet market, especially in the lower price points. But I think those who already had a tablet are going to buy to get a better tablet. They like the speed. You know, I gave the example of a unit that had an Intel processor on a tablet versus a non-Intel processor, you really see a big difference for anything that’s high-data content.
DS: Now, in terms of the gaming side, I haven’t heard that much talk about that so far today. What are the trends going on there?
FT: Right now, both the console-type products are gonna still be highly-desired, especially this holiday, they were introduced last holiday. Availability got somewhat better, but with the holiday season, they’ll start to tighten up again. But the beauty is that so many new games are coming out that weren’t out last year that go into these consoles are becoming available. And again, the way they’ve built both these new systems, Sony and Microsoft, they’re becoming more of a centralized hub. So again, there will be very good sales with that, and the games that are coming out are going to be very, very hot. But the other side of it is, what the manufacturers are bringing in computing offerings in the gaming world. HP will have a system, Asus is looking at this very carefully. There’s many manufacturers that are bringing the next level of gaming out, even above the consoles, and more of a computing product.
DS: I know today you announced a bunch of new line items. What made you add these particular things, and what do you hope to accomplish with them?
FT: As the consumer is finding that more and more of these technologies can make a change in their lifestyle, they’re starting to look and invest in adding those to their ecosystem of consumer products. More importantly, even in categories like lighting, LED lighting’s been out now for years, right? But if you go into stores, it’s already getting harder and harder to find a traditional light bulb. But now when they’re adding repeaters into the light bulbs, and speakers into the lighting units, and light levels, that really adjust the light down, we’re bringing in these products that we’re seeing consumers starting to migrate to. Products that, as the phones get bigger, they might want to use a peripheral device to able to look at instead of bringing it out of their pocket or their purse. And they’re just gonna look down at a smart watch and say “oh, I’ve been waiting for this email to come through,” so they can decide whether to take out their smartphone.
So for us, we’re trying to look at the trend of that. We’re also looking at the area of color and fashion. And making sure, because the female shopper is getting that much more powerful in making selections about these products.
DS: We spoke at CES in January, and you said that this is a big year with the female customer emerging. Have things borne out that way?
FT: Yes, very much. And I think, primarily too, when I brought on stage my lyme-green-colored HP phone, the color, fashion and style are becoming very popular. And part of that is that these products are now showing up in stores like Kohl’s and Nordstrom’s and sporting goods stores where the active lifestyle is occurring. And more and more the female customer is going in there and they’re not looking for just black, white and grey colors. So the fashion of color and style is really becoming a big component of the selection choice.
DS: Getting back to the new products. You signed up some home automation vendors, AWOX and iControl. Where do you see home automation going this year and next?
FT: Again, consumers like the fact that it’s not as complicated as they once thought it to be. Before, if you wanted to get anything automated in your house, you had to hire a contractor and an electrician, and it was a rather extension install. Today, it’s going to be a simpler install, where it’s just plug-and-play. So you plug a device in, and you’re going to have an Internet protocol for that device, and many other devices that will attach wirelessly to it. It will enable lights to be turned on, security to be put into place, and for a camera that will have the width to cover a whole room in your home. Even if someone alerts you that there’s motion in your house, you can alert the potential intruder and tell him “I’m calling the police, please get out of my house,” and it’s just a matter of plugging the unit in.
So I think that’s going to open up a whole new circle of automated-type products. The other side is somebody that wants the experience of “I have eight or ten devices that hook into my Wi-Fi system at home- what is the right gear that I need to buy to make sure that I get a good experience and good data transfer, and that might require more of an install-type base?” We’re going to cater to bring those types of products into our dealers so that they can either bring in an installer or we can recommend an installer to help them with that product.
DS: Another thing wetalked about in January was when you reached the deal to become the exclusive Google Chromecast distributor. How has that gone?
FT: It’s gone really well. I think the beauty is that it’s a very easy system to operate. And people are loving to get more of a smart environment in their home, and by connecting this device in it’s a great way to share, and sharing is really the main purpose of it, or the ability, how easy it is to bring a Netflix and other things like that and add it into your home environment.
DS: I’m sure they haven’t announced this yet, but is this going to be it in terms of this version of Chromecast, or is there going to be a Chromecast 2?
FT: I think for now it is, though, ‘stay tuned’ is probably the best thing to say. The current iteration of what we’re selling is still selling very well. And we’re adding on more channels that we’re excited about.
DS: I know that with Google Glass, they’re doing kind of a weird distribution strategy with that, where first it was exclusive, then it wasn’t as exclusive anymore, is that every going to go to retail?
FT: I think that when Google Glass first came out it was so interesting, that people wanted to see it, and then figure out how to use it in the world. I think there was so much concern with people saying that ‘is this going to be an item that will make some people nervous knowing they have this device on?’ So all of a sudden, someone’s at a sporting event, and they’re in an area where- they might go into the mens’ room- people are going to be uncomfortable if they walk in with Google Glass on. People don’t know when the breach of personal space or privacy has been broken. The other side of it is, how do we know someone is being attentive, whether they’re driving a car or walking down the street. Where are they putting their mind and focus when they’re trying to concentrate on a small monitor of the Glass?
Technology-wise, I think it’s an amazing product for the future. I just think that in the right application it’s going to be more applicable.
DS: The other deals you announced back in January were with Wowwee and Pivothead. I think I saw the Wowwee robot downstairs just now. How have those gone?
FT: We’ve already seen in the world, if you look at the migration, it’s probably been six or seven years, maybe since the Roomba came on market. Then they had the Scuba, which the water version of it. Nowthere’s Neato out, which is a more advanced robotic vacuum cleaner device, I think as we look forward,that more devices will be there to affect people’s lifestyles, people who have disabilities, people that wouldn’t have the convenience of someone coming over to help them. I think we’ll see more of a trend towards robotics, in the future.
DS: Is there anything you’d like to add, about this event, or the year ahead?
FT: People always in the consumer sector say “give me some products that are gonna bring some excitement into my store,” and I think this year there’s a lot of exciting products that will allow the customer to come in, without hitting the $500-or-above price point, and can still add many gifts that will go under the holiday trees, or in the gift-giving time period, to share with them where technology’s going. And I think it’s become affordable, it ties in with gods they currently use today, to make them even that much more productive for the future.