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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4396)	2/13/2005 10:57:57 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Apex products losing ground in industry 10:02 PM PST on Saturday, February 12, 2005 By PAUL HERRERA / The Press-Enterprise A year ago, the ApeXtreme was chosen the best new home audio or video product at the International Consumer Electronics Show in Las Vegas. Now it's one of the most anticipated products never to reach its customers. The ApeXtreme, a video-game console that promised to bring computer games to the family room television, has been shelved, awards and all. "Unfortunately, Apex wasn't able to bring it to market," said Curtis Kaiser a spokesman for Digital Interactive Systems Corp., a Long Beach company that developed the technological keys enabling the ApeXtreme to play PC games. Instead, DISC has partnered with Alienware, a Miami-based company that has launched a $1,400 media center featuring the game technology. The ApeXtreme was to be part of a series of new product launches for Apex Digital. The company had planned to sell its version of the machine for less than a quarter of the Alienware price. Apex made its fame on price, boasting that its business model brought technology to the masses. Apex was influential in bringing DVD player prices from the $400 level to sub-$200 at the start of the decade. Then they nearly halved that number each of the next two years until consumers were accustomed to paying $50 or less. Apex Digital has stretched the concept into other products, ranging from cheap televisions to high-end LCD screens and portable gadgets to play DVDs and music files. The Ontario firm, which now finds itself embroiled in an international controversy involving Chinese television maker Sichuan Changhong, announced a series of new products at last month's Consumer Electronics Show. Apex is fighting a court battle with the Chinese firm, which accuses it of accumulating $472 million in debt and writing bad checks. Attorneys for Apex Digital are also disputing documents, purportedly signed by its president while imprisoned in China, that would transfer control of the company to Sichuan Changhong as payment. According to documents filed in Los Angeles Superior Court, Apex Digital had been shifting its business strategy away from the cheap television sets that it once imported from Sichuan Changhong and sold nationwide through retailers including Wal-Mart. The company has been in search of new products and suppliers, according to the filings. At last month's Consumer Electronics Show, the company announced plans to launch new portable DVD players, MP3 players, DVD and digital recorders and a larger model of LCD televisions launched in August. Apex Digital spokeswoman Marietta Schoenherz said the company uses the show to present a menu of options to retailers. Schoenherz said the retailers will dictate which products Apex Digital will follow through on. Richard Doherty, research director for the Envisioneering Group, a market research firm based in Seaford, N.Y., said the company's recent product launches have been fairly well received by the industry. However, the dispute with Sichuan Changhong is having a clear impact. "The industry has been trying to separate hearsay from fact," Doherty said. "They don't want to be dealing with a company that has legal problems that could draw them in at some point." Schoenherz said the impact has been minor. Doherty said Apex Digital products have largely disappeared from retailers' advertisements. He pegs the cause to uncertainty surrounding the dispute with Sichuan Changhong. That uncertainty has bred concern as to whether Apex Digital will be able to fill orders or service its products. Analysts say the brand is also taking a beating. Apex Digital admitted as much in court filings, saying that its Chinese supplier timed public statements against Apex to undermine its efforts at the electronics show and has further hurt sales by magnifying concerns about the company. The company has said very little publicly concerning its problems with Sichuan Changhong. Schoenherz declined to comment, citing litigation. Even without the controversy industry analysts say Apex Digital's market niche of bringing popular consumer electronics to market well below competitors' prices was already showing signs of slipping. Other competitors have traced the strategy effectively. The new DVD player sales king is another bargain Chinese importer. Apex Digital's new line of high definition LCD televisions is priced higher than some competitors'. "There are way too many of these companies out in the market right now," said Riddhi Patel, a market analyst with iSuppli. A 32-inch version of the television announced last month and scheduled to launch in August has a preliminary price tag of $1,899. Patel said the current slope of declining prices would put Apex hundreds above the low price competition and closer to the profile of brands like Sony. "If that's the case customers will buy the premium brand," Patel said. "LCD Market is a new technology market. I think the comfort level isn't there for the value pe.com