Question-and-Answer Session
Unidentified Audience Member
(Question Inaudible).
Greg Klaben
The question was, how much of the office and I will cover contact center sales, corded versus cordless, and why is the gross margin lower on the wireless product?
So, overall, office and contact center is about a 50-50 split between wireless and corded products. The contact center, those sales are predominantly corded, because in contact centers, they're more cost sensitive. The products might sell for an average of $150 to $200, and they like the person to stay where they are and not wander around.
In the office, the sales are more heavily weighted towards wireless products. People like the freedom to leave their cube, walk around the building and as I mentioned, walk up to a football field away and still answer your phones remotely. With crystal clear clarity and no one will be able to tell you're on a handset, especially noisy cubicle environments, where there's high degree of noise cancellation built in.
And then in terms of the gross margins for each of the lines. The gross margin of corded products approaches 70%. Gross margin of wireless products is about 12 points lower than that. The key reason is that the wireless products have chipsets built in for the transmitter, to see if their battery is built into the headset. So the component costs are a lot higher and there's more R&D associated with that.
But the good news is the gap between the two has been narrowing consistently over the past couple of years where it was a much wider gap, and overall, despite the fact that wireless is increasing as a percent of revenue consistently, we've brought up the margins and actually a wireless product sale has more gross profit dollars associated with it, than a corded product.
So average wireless product might sell close to $300 to $350 versus much lower price in the quote or product. So we like the wireless product sales. Yes.
Unidentified Audience Member
(Question Inaudible)
Greg Klaben
Question was when we do the annual impairment test in Altec Lansing and have we ever done written any of that down? The answer is we haven’t run anything down. We do it typically at the end of our fiscal year. I think twice last year we did it after we reported our quarter normally, and then I think we did it again in July, August timeframe. So we'll do it again after this quarter ends.
- To read the full transcript on Seeking Alpha, click here »
