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Skullcandy, Inc. (SKUL) Message Board

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  • michaelsistowicz michaelsistowicz Feb 9, 2013 7:58 PM Flag

    Beats discounting

    Hey Chaz,

    It scares me a little too...

    I actually thought about the Shoko thing a little more... Shopko is a deep discount chain. Skullcandy is not in there (except 2XL). The client base are bargain shoppers. I suspect Beats (in this case) can't sell into this low end market.

    What I mean about consolidation is that there are only so many kids that can afford 250-499 headphones.

    I was reading Koss's analysis of the market from their filing in 2011. At that point they already had stated 2 interesting things.

    They noted that there was a noticeable shift of sales away from the holiday's as ear phones were becoming more of a disposable item.

    And

    The above is evidenced by the influx of mobile devices.

    This was already noted for the period 2009-2010

    Beats in particular are 1 off consumers. Get their high end set (w/quality issues for that price range) wear them heavily (w/mobile devices) break them, and get upset and some go back into a less expensive option (Less expensive over ear or a pair of buds).

    Bose and other high end sets are not designed for that kind of wear and tear. They are for home use with a stereo. Not for the slopes or active use. You pack them up in a case, cherish them.

    Just some thoughts here. Skullcandy has hit the sports lifestyle crowd. The earbuds and cassette style fits well there with the abuse and fit needed for active use.

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    • I agree that Skullcandy still stays true with the sports lifestyle crowd. Was just boarding at Copper Mtn. CO. and they have very nice Skullcandy displays at the base of the Mtn. board shops there. Even spotted multiple boarders wearing - Skullcandy over the ear's - over their beanies.

      • 1 Reply to coffeenote20
      • Coffee. Yeah, there is little doubt they dominate the skate/ski/snowboard/motocross and extreme sport crowd.

        Andrus even stated in his exit interview a with the Wall Street Journal that was their target market and offered "Authenticity" to the brand. Focused on small retail shops.

        I think going forward the question is going to be what is their growth strategy as they clearly (IMO) do well in their target demographics.

        It's a 1 Billion Dollar market according to the WSJ with Beats dominating at 51% share, That would put SKUL at 30% (Based on 300 million sales). The only other one I can break out is Koss with 35 million or 3.5%. That would leve 15% for all other (Bose, Sony, Monster, Soul, Gummies, Logitech, Apple and a dozen more). I think the worldwide market is much more then 1 Billion and Beats doesn't own 51%....

        I believe that they will be tapping the gaming market, gaming sets, controllers, partnerships in action games. They will try to expand into the apparel market more as well.

        I'm itching to hear what Alden has to say going forward!

        Sentiment: Strong Buy

 
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