Marine Electronics local market
As boat owners, we are naturally curious about any sector of marine
electronics that seems to be
out of favour, and recently we have turned
to the question of whether attractive opportunities and products may now be present among the higher-quality retailers.
Marine Electronics local market
The local market
The local equity Marine Electronic market has dealt harshly with the share prices of retail businesses in recent years: is some 35%-40% below the all-time peak
reached in late 2008, the retail sub-index is 55%-60% below its peak,mid-August.
One business that has impressed many people over the years is Marine Electronic products include Fishfinder Sonar GPS, Marine VHF Radios, two-way radios , marine and speakers, GPS and Chartplotters by Garmin, Uniden, Lowrance, Humminbird, Raymarine etc.
It enjoyed a period of consistent growth in market share and earnings, driven by a well-executed, low-cost business model and store rollout.
However, like many of its competitors, many Marine Electronics Companies in the United States now finds the market environment challenging. Earnings have been impacted by a raft of factors, including reluctant consumers, cost price deflation and online competition.
Indeed, store closures now being implemented by competitors could leave some Companies a better position once conditions recover.
For patient investors there is a certain allure to the cyclical
recovery story in marine electronics segment.
However, the structural clement of the pressures cannot be easily.
Marine Electronics Brand reputation and location matter far less now
Amazon is a formidable competitor, best selling Fishfinders
, and earns most of its revenue from electronics and other general merchandise
In the past years, Amazon grew its revenue from international EGM
and if Marine Electronics can hold its own on costs against this sort of threat, then an investor may feel confident that it can answer the challenge of online competition.
It's not hard for you to spend some time on a computer comparing for Lowrance, ACR or Humminbird etc. - online offerings of different retailers.
For much of Marine Electronics's product range, it is possible to find local websites offering the same products more cheaply. The prices appear to typically be 10%-20% above the better domestic alternatives.
Here, the prices are typically 20% to 50% above the competition,
should be said that the larger price differentials are for products you wouldn't buy
from a US website (eg, sensitive and more expensive marine electronics, radar systems etc).
Amazon is a price leader
In the US, Amazon is a price leader - you can not find lesser-known competitors
offering material discounts to Amazon.
Now amazon sell products arranged by category include Stereos
, Speakers, Subwoofers, Amplifiers, GPS Chartplotters
, Two way Radios, Radar Systems
This tells you something about its strategy and what it takes to succeed online.
In an online world, brand reputation and location matter far less
than they once
did and sales will go to the retailer found by a search engine to be the cheapest.
Given the differential between marine electronic systems/components prices and others, domestically and internationally, it seems there is considerable scope for more price deflation and pressure on already narrow profit margins.
While a cyclical rebound in consumer sentiment may well drive improvement
in the near term, many ME Brands are nervous about longer-term prospects.