I am still interested in anyone's thoughts on this topic.
My opinion is that there is no barrier to entry. All anyone needs to do is buy one of the existing brands/companies....they are cheap. For example, MCZ (which I own some shares) has the Tritton brand which I'll bet someone could buy for less than $50 million. It is profitable and growing fast and has a nice high end niche. Or just buy SKUL, another cheap way to enter the market.
Buying an existing company is not an "entry" by definition. Entry is developing / sourcing, purchasing, packaging, shipping and invoicing / billing new product. This would include profitable price points, volume of sales, salaried employees, incorporation or registration as a business entity.
I believe what Andrus was saying is that saturation and price points, SKU / shelf space availability etc. have become very competitive. Thus a barrier to entry (long term and profitable) The "5" players eventually he is referring to is the number that can survive as "players"
He also stated the in house design (that includes the sound profile, and mechanical design not just strickers and colors) is part of the barrier FOR THE 50.00 - 100.00 plus bracket product.
Sure someone can buy a set from china, stick their name on it, try to undercut everyone. Who is going to sell it?
Just my thoughts....
MCZ is a good company I am sure and they are a 30 million market cap .
By the way I keep hearing disappointed Beats customers on the street. Suckered into paying too much for "new hip status", you don't hear that about SKUL. Loyal expecially in the markets they target.
In response to your question: A sign of strength occurs (SOS) in the right hand side of a trading range and has wider (think twice as wide or more) as the bars in the recent past with volume that sticks out on the chart, think in the top ten. The close is above mid-range.
You don't have to sit in front of the screen to see this on the daily chart because you should not buy it immediately anyway. Let it go up. Buy it only when it retraces and tests or nearly tests lower support on lower volume. The SOS says demand has proved itself and it tells you there is a trend change and it is safe to buy the dips. Right now it is only safe to sell the reactions.
Check out DRYS, a dry shipper. The Baltic rate ticked up and so all the shippers showed a sign of strength a couple weeks ago. But look what happened it retraced to the 1/2-way level of the SOS bar and may retrace all the way back down to the break out price, the bottom of the SOS bar. The point is to be patient.
SKUL will probably pop or drop on th earnings release. But why risk holding it thru that? If you want to gamble, play poker imo. Because, whether it goes up or down will have little to do with the content of the news but more on the positioning of the very biggest players. They will use whatever news comes out to move it their way. Seldom if ever is there "perfect" quarterly results. Besides, if it goes up with an SOS, just wait, even if it doesn't retrace into the SOS bar, it will eventually retrace and there'll be plenty of run left.
Another, but more risky, entry would be a low volume test of the high volume low, $6.55 with a stop just under it. By the same token if it closes under 6.55 on high volume, get out of the way, it'll go to $5. JMO