People don’t buy a radio – per se

On the positive side, HD radios will soon be available at Radio Shack (and are already available at RS’s online store).

On the not so positive side comes this from Radio Business Report:

Lehman Brothers analyst Anthony DiClemente has been testing a 299 bucks Boston Acoustic Receptor Radio HD. His bottom line: “Not enough bang for the buck.” Yes, he liked the sound quality – “But the digital experience was not entirely user-friendly: we experienced an irritating 2-3 second delay in reception when we first used the unit’s knob to tune to certain HD stations.” Worse, once he tuned in a station, there would be signal dropouts of up to five seconds, which he said the user’s manual blamed on an implementation problem with HD broadcasts that is supposed to be fixed over time. As far as basic sound quality, DiClemente said HD “had modestly greater depth and virtually no static interruption and noise interference relative to the analog stations.” That’s good, but is it worth 299 bucks? Not compared to a 2 GB iPod nano that sells for 199. “We believe a tabletop clock HD-radio which includes a CD player could have broader consumer appeal at a lower price point below $150,” was DiClemente’s conclusion.

Fundamentally, everybody needs to understand that folks generally don’t buy a radio. They buy things that contain radios. Clocks, alarms, cars, CD players, the stray mp3 player, you name it.

This fact has some obvious positive implications for HD radio that relate directly to distribution and pricing strategy (they’re obvious to me, anyway, but I’m not going to spell it out here).

What DiClemente is really suggesting is that a clock with a CD player will be a better way to sell an HD radio. Get it? And while he’s not wrong, he’s also thinking too small and too close to the top of your table.

As for the price point, DiClemente has described a niche item. A rather expensive CD/Clock/Radio. Not the next generation of America’s most common audio entertainment appliance.

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