TOKYO – Macintosh product maker Sonnet Technologies Inc. has kept the faith with Apple Computer Inc. through good times and bad. With the iPod now taking Apple’s profits into the stratosphere, the 50-employee firm is hoping to hitch a ride to the big time.
After serving the Macintosh community by offering processor upgrade products for nearly two decades, the Irvine, Calif.-based company aims to carve out a niche in the consumer electronics market.
Sonnet’s new pursuit started last year when it added a new product, PodFreq, to its lineup. PodFreq, which transmits FM frequencies, is an add-on device for the hugely popular iPod digital music player.
The translucent shell allows users to listen to music on their iPods without earphones in a car, home or anywhere with FM stereo devices.
According to the company, the FM transmitter has been highly acclaimed by Macintosh professionals and users for its sound quality and user-friendliness. Macworld magazine awarded the product “Best iPod Accessory” in 2004.
Although most manufacturers have been striving to reduce prices to cope with intensifying competition, Sonnet seems to be going against the trend by setting relatively high prices.
But this has not been perceived as a disadvantage, as a review editor says in Macworld: “The PodFreq isn’t inexpensive – it costs at least $30 more than other transmitters. But it’ll keep you rocking no matter where your journey takes you.”
With the new product, Sonnet aims to expand its customer base to reach as many people as possible around the world. Whether the company can make inroads into the consumer electronics market may depend on the efforts of Vicki Burkhard, the company’s vice president for worldwide sales.
Burkhard, who joined Sonnet in 1998, said she developed distribution channels in more than 70 countries and achieved 95 percent market share in Sonnet’s business category. At present, more than half the company’s profits come from its overseas sales.
Sonnet claims it has been recognized as one of 500 fastest-growing technology firms in the United States and Canada, with a five-year revenue growth rate of more than 800 percent.
“The company hired me to develop international markets and channels,” Burkhard said. “During the past seven years, we have completely changed the business structure from telesales to international distribution channels.”
Burkhard, 48, is not one to shy away from a challenge. But the shift in sales strategy was a risky bet for Sonnet, which has manufactured Macintosh enhancement products since its founding in 1986.
“It was a big race for a very small company like Sonnet at that time. We weren’t sure what the future of Mac computers was, as they weren’t doing well those days. But we made a decision to depend on the Macintosh market with follow-up products. We were taking a risk, but it was worth doing,” she said.
Burkhard is now trying to steer Sonnet into a new direction with the FM transmitter.
“PodFreq is new for us, and this is our first product that actually isn’t in a computer,” Burkhard said. “When you put a product in a computer, it has to be functional and has to fit. Now we have a new product, which is a consumer electronics product.
In April, Apple posted a six-fold quarterly profit increase due to strong iPod sales. During its fiscal second quarter, Apple reportedly sold 5.31 million iPods, accounting for 31 percent of its revenue.
“When we look at the iPod market today, they own more than 60 percent of the worldwide market share in MP3 players. All those people are our potential customers, as everyone using iPods could use the FM transmitter,” Burkhard said.
Sonnet is scheduled to introduce the PodFreq for iPod mini to the Japanese market in May.
“We want to increase sales of this product by at least 50 percent this year and another 50 percent next year,” Burkhard said.
MSRP for PodFreq and car charger is $99.95. Visit the Website at www.podfreq.com.
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