I follow this category closely, especially other brands.
Logitech is now just refreshing the Ultimate Ears lineup and will make a big push into Retail channel, they will compete with skul on price and existing channel.
Apple is seeing headphone market as an opportunity and will start to enter, first the earpod, majority of skul customers use Apple. Skul products are optimised for Apple, anything with Mic3.
Bose will release a new range of products next week which are targeting gen y (colors), Bose new pricepoints are taking share quickly.
Competition heating up and channel conflicts abound could be an issue in the future.
Interested in hearing thoughts from the Skul management at 3q conference call about its competition. Skul promotes fashion/fad in addition to quality earphones. Kids want style and no matter the quaility, it's about fashion, so not sure the new earpods will take away much buz. And no impact from the earpods to the headphone and gaming market as that's a different audience.
I have talked to multiple sales people at BB, Verizon, etc. regarding earbuds/headhones and popularity. Most say Beats are most popular despite being overpriced cuz it's all about style. Skul is generally #2 and trying to make a move on Beats with its new displays and lower price points. So clearly not all about quality as plenty of competitors make a better earphone for the Beats price, but rather fashion. So it seems in this competitve/crowed market Skul is focused on marketing to keep and gain its audience. Assuming they can maintain quality, they still should have a strong market with its followers.
Similar concept with tennis shoes. We all wanted the Air Jordans at any price cuz of the cool factor. Don't think they were any better shoes, but great marketing made us all want them. Nike is still a higher priced product that continues to win in a crowded market; it has great branding. Isn't this Skul's business model?
Earbuds/headphones...everyone has or will have some. Billions of users and future users all with different tastes and needs; enough to go around. Skul isn't trying to conquer the world, just have its target market. Mobile is the future and I don't see the demand for them going away.
What does this all mean for the stock price? Probably creates a more wait and see attitude for investors. No short squeeze for now. Maybe fundementals will rule (like it should) and skul will get some bounce each quarter that it meet expectations. Maybe pps drop going in to 3q earnings based on short term uncertainty. Skul needs only to make $42 mil per year for an EPS of $1.50 and PE of 15. That translates to a PPS of $22. Are you kidding? Easily doable.