Korus Missing Chains With Late Charge But Lands Magnolia for Holiday

Korus, Core Brands’ wireless speaker alternative to Bluetooth and Wi-Fi-based systems, will begin shipping next week through the company’s KorusSound.com website, Rob Halligan, vice president-group marketing and strategy for Nortek’s Technology Solutions group, told Consumer Electronics Daily in New York Monday. The V600 and V400 speakers were re-priced upward to $449 and $349 from the $399 and $299 prices the company set when it unveiled the product in June (CED June 21 p1), he said. Prices were raised because Core Brands elected to include two $49 transmitter dongles also called batons for the Apple 4 and Apple 5 along with USB chargers for PCs and Macs, Halligan said. The accessory bundle is a $170 value, he said.

The units will begin selling in Best Buy’s Magnolia Design Center stores and through Crutchfield in November, Halligan said. The late date is “not as early as we'd hoped” to have products in stores for the holiday selling season, Halligan said, citing “the nature of how you bring products to the marketplace.” He said the company is “very pleased” that Best Buy’s Magnolia Design Centers “are taking us in at this time of year,” and Best Buy was “excited” to get the product. Korus plans to be in eight or nine additional chains in 2014, having missed holiday planograms for 2013, he said. Initial target markets are Atlanta, Chicago, Dallas, Denver, Houston, Sacramento, San Antonio, San Francisco, southern California and Washington, Halligan said. The other chains and markets will come onboard in 2014, he said. The goal is to be in the top 12-14 top markets where 80 percent of the category’s sales volume is done, he said.

Korus will attempt to crack a brand-intensive retail market without a household brand name. Halligan said $2.2 billion parent company Nortek, which makes a broad range of products, including security systems, intercoms, range hoods, central vacuum systems and furnaces -- along with custom electronics products under the SpeakerCraft, Elan and Niles brands -- is in more homes than Apple products. The various spokes of the Nortek wheel lend technology credibility through their presence in the pro AV, live music and residential speaker markets, Halligan said.

Nortek’s move with Korus is part of a company effort to move away from a “siloed” organizational structure to one where it looks at the expertise it has across categories. Audio is one of the first target categories where Nortek can leverage its experience in in-wall speakers, wireless technology and pro music, Halligan said. It looked at the SKAA wireless protocol from the pro music world and realized that the advantages it provides could be used to “fill gaps in the market” currently served by Bluetooth and Wi-Fi. He underscored Nortek’s “agnostic” approach with the Korus music system brand. It’s based on SKAA now, but “if something better comes around, and there’s a use case on the Wi-Fi or Bluetooth side, we will be there,” he said.

For now, SKAA gives Korus a differentiating wireless technology amid the “plethora” of Bluetooth speakers on the market, Halligan said. “This is a way to take the consumer drivers for Bluetooth and connect a music source with a speaker and create additional advantages.” Those include no need for pairing a smartphone to a speaker, for setup, or for a network. SKAA also offers a longer operating distance between source and speaker, which has been measured at up to 60 feet indoors and up to 200 feet line of sight outdoors, said Halligan. Once the dongle is plugged into an iPhone or iPod, “if it plays on the device, it will play on the speaker,” he said. The product will begin shipping with the 30-pin iOS connector, and the 9-pin version will follow.

A primary pitch of Korus is easy setup versus Bluetooth, which requires pairing, although Bluetooth pairing is a fairly straightforward process, especially to younger users accustomed to the process. Halligan called the target customer for Korus “a blend,” which could go easily from “post-college” to 60-plus. The under-25 market will come “in bursts,” he said. According to company research, “it’s much more 50-50 than we ever thought,” he said, citing interest from young and older consumers. Retail buyers have told Korus that its product timing is “perfect” because of the “proliferation of Bluetooth,” which has become “crowded and confusing,” Halligan said. Korus is positioning the personal speakers as a bridge between Bluetooth speakers and expensive whole-home systems, he said.

Core Brands’ vision is to take Korus to more spots in the home, Halligan said. “I could see it going more toward television and more toward ultra-mobile,” he said, declining to provide a timetable. “We're not committing to anything like that publicly,” he said, “but if you do the math, it makes sense."

On the brand side, Korus positions itself between Sonos and Bose in the personal speaker world. The company is leaving the “32-zone custom installation” market to Sonos, Halligan said. “We're looking at more of a personal system for one speaker,” he said, where users can then add a second, third or fourth for a ranch home or apartment or condo. “It’s designed for the individual and the personal rather than a whole-home system,” he said.

The Korus speakers have built-in handles, making them portable in theory, although their weight limits portability by today’s standards. The V600 weighs 11 pounds, and it’s not clear from specs whether that includes the six “D” batteries needed for operation away from an AC outlet. The smaller V400 is only 4.4 pounds but doesn’t include a battery-operated option. One to four speakers can be combined with the same source device or separated with different source devices in different locations, according to specs. The company is “pursuing” a patent on its Live Stage technology, which it calls a “3D sound” and not stereo, Halligan said. Live Stage positions vocals in front and instruments behind in the soundfield using side-firing tweeters and precise speaker angles, he said.

To raise awareness for the Korus brand, the company plans to market the powered speakers at sporting events, farmers’ markets and malls, said Halligan. The company has tasked a field team with gaining exposure for the Korus brand and training retail trainers on the product, he said. Demos are key to the sales pitch, he said. “We hope somebody’s got a Bluetooth speaker with them, so we can show the products side by side because the sound quality is pretty good.” Korus also plans to reach customers through satellite media tours and online search optimization tools geared around “wireless speaker” as a search phrase, he said. Stores will have demo systems in the aisles “on a case by case basis,” he said, with Best Buy stores being a definite source for demos, he said. Sales associates will carry the $49 Korus batons (dongles), which house the wireless audio transmitters, for demo purposes, he said. “It’s important to close the loop at retail,” Halligan said. “It’s a new product, a new brand and a unique alternative to established protocols,” he said. “Sampling is a pivotal part of our marketing campaign.”