Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Bright - Avondale Partners.
John Bright - Avondale Partners
Great quarter on the mobile side the equation, understanding the sustainability of that certainly is going to be a question, but I do want to talk about the OCC market. That’s a tough one, Ken, but are there are levers that you can pull given that this is likely a price sensitivity issue right now to maybe push people over the edge for some of those headsets.
Ken Kannappan
John, what we’ve found in the past is that it’s actually not a price sensitivity market. It’s a desire market and acts as something that I would call beyond reconiam. We don’t effect the actual elasticity of demand and we’ve done quite a number of tests on this and we’ve done a lot of research, but of course real world tests are the ones that really matter. The simple issue is that if a professional really wants the headset, they typically buy it. Usually the company winds up paying for it. Small differentials in price don’t really effect the aggregate market adoption of the category.
What happens is if people cut price, of course they can gain and then market share shifts and typically those prices get matched and so no market share shifts and just simply the size of the total market actually decreases measured in revenue and stays flat measured in unit. What we believe is occurring during this period is that the level of economic activity is declining and in particular it is really unfortunately hitting a number of our key market segments.
We have long indicated that some of the highest adoptions of vertical unfortunately include many of you on the line in the financial services sector and it’s a high adoption market for contact center. It’s a high adoption market for office and so we think that’s what’s hurting economic activity for us. We don’t really believe there’s going to be much price sensitivity.
The other thing that happens when people reduce prices are sometimes you get people to buy now, but then you create a trough for later and we’re really not interested in resulting in that type of thing either by channel dealers or end users and that’s typically where that shows up.
John Bright - Avondale Partners
On Altec, today or this morning, Logictec held their conference call and they cited PC speaker weakness in the marketplace. In your prepared remarks, you talk about better than expected retail placement for soon to be announced Altec products. Is there something I can correlate between those two?
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