Last year at CEDIA EXPO, NuVo Technologies made significant news with the introduction of the industry's first ENERGY STAR-compliant multi-room audio product. Not willing to sit back and rest on their laurels, especially during a tough economic downturn, the company's management team revealed plans this year at CEDIA to introduce a retrofit-friendly multi-room audio product that uses the HomePlug 1.0 powerline standard. NuVo president and COO, David Rodarte, took a moment while in Europe last month to respond to questions about his company's CEDIA experience and reactions to their award-winning Essentia E6G product and new Renovia line.
You and your management team made a pretty big financial commitment when you chose to become the first company in the custom installation channel to seek and receive an ENERGY STAR certification on a multi-room audio distribution product. You must have felt a bit validated when you were named as one of this year's CEDIA Manufacturers' Excellence Awards for that Essentia E6G product?
Above all, Essentia E6G's Manufacturers' Excellence Award was a huge honor and achievement for NuVo. It was gratifying to be recognized by the CEDIA judges for what was yet another example of conscientious due diligence on the part of our engineers. I credit the vision of my partner, chief technology officer Rick Kukulies, and his passionate engineering team for this achievement. When they began to develop Essentia E6G, they did so with energy efficiency top of mind. They absolutely stood firm on a very challenging project plan that required new digital power supplies, as well as sophisticated firmware that methodically and seamlessly shut down unnecessary IC power consumption while still delivering 240 watts of power to 12 zones on demand. Like every manufacturer, we constantly vetted the project in terms of speed to market and return on investment, but Rick and his team remained determined to turn their vision of an energy-efficient multi-room audio system into a reality. The whole process was organic in that it grew directly out of our organizational philosophy of developing products that enable our customers to live simply and live richly, and that enable our dealers to install well-designed systems that reflect and respond to market trends.
Maybe just as notable as last year's Essentia E6G was this year's sneak preview of an innovative retrofit multi-room audio solution called Renovia, which utilizes the HomePlug 1.0 powerline standard. Retrofit is a buzzword right now in the industry, but not something most integrators have mastered. What was the reaction to Renovia during CEDIA EXPO?
The reaction to our preview of Renovia technology at CEDIA EXPO was quite phenomenal. My personal experiences with customers at the booth generally fell into one of two categories: the deer-in-the-headlights look or the immediate "a ha!" moment. Renovia had many of our existing dealers rather excited and had quite a few dealers who aren't yet in our stable kicking the tires and asking questions in our booth. Beyond the obvious appeal of powerline technology, the fact that our system does not even require a wall wart given our new Wireless Control Pad with metadata was really appreciated. We feel Renovia will address a real need in the custom electronics marketplace, given the housing decline and the slowness expected over the next 18 months.
We previewed Renovia technology at CEDIA EXPO to give dealers a chance to prepare for the product's arrival early next year. This isn't just a new set of products; Renovia will require a new business model for our dealers. The Electronic Systems Contractor will need to do some business planning on how to market and how to set pricing to jump into the readily available retrofit market. We engaged our dealers in many productive discussions on this topic during the show and will continue to do so.
With Renovia, our dealers will be able to install multi-room audio in virtually any home in the country. They will be able to confidently and easily offer multi-room audio along with home theater installation and other popular services to existing homeowners. They'll be able to install a Renovia system in an existing home in no more than a day, with minimal disruption for the homeowner, no holes in drywall to patch. For all practical purposes, our dealers and we couldn't come close to making such statements before. This technology will open all kinds of new doors and profit opportunities for our dealers. And make no mistake about it; this is all about our dealers. Like all other NuVo products, Renovia will not be a DIY or retail product. It is meant to be sold and installed through the custom integration channel.
It's about to be a very exciting time for us, for our dealers, and for the multi-room audio category. We want to unlock the full potential of multi-room audio as a consumer technology. After all, who wouldn't want a multi-room audio system? Next year, with Renovia, we'll have the system that will enable our dealers to bring multi-room audio to the masses.
Obviously NuVo is not the first manufacturer to create a powerline-enabled solution for the market. That being said, what made you and your team confident enough with the audio performance and reliability of the technology to develop a product around it?
NuVo's engineering team made the fundamental decision to adopt Power Line Communication at CES 2007. We conducted extensive research and arrived at the solid conclusion that powerline is the best technology out there for retrofitting a multi-room audio system, and we still firmly believe this to be true. While we believe wireless technology has a place in the area of multi-room audio system control--as evidenced by our new Wireless Control Pad, which works with our Grand Concerto, Essentia E6G, and upcoming Renovia systems, and was another big hit at CEDIA EXPO for us--we don't believe wireless is robust enough or reliable enough for the transmission of audio throughout a home. Bandwidth issues and environmental limitations place unacceptable limits on the wireless transmission of music. The human mind does not forgive a stutter in music composition, nor is the average consumer comfortable with placing an electronic box where necessary versus where desired, as would be required with a wireless system. Renovia technology integrates HomePlug 1.0, Arkados' IC infrastructure and NuVo's capabilities in small amplification and digital switching power supplies (another benefit from our ENERGY STAR effort) to produce a product plan of which we are very confident.
I imagine that it's been difficult avoiding comparisons between Renovia and a similar new product from one of your competitors. In fact you mentioned to me having spoken to Russound's director of product development at the show. What the two of you learn about each others approaches and how you are differentiating your products?
Ah, you're referring to my comment to Andy Lewis of Russound. I remarked to Andy during CEDIA EXPO that the fact that two credible multi-room audio companies have chosen the same powerline foundation for their retrofit products really validates the reliability of powerline technology to the marketplace. From what I've read and heard about the Russound solution, it seems to be a good, if highly ambitious, product plan. Judging from what we see today, under our estimation of manufacturing costs, it would be a substantially higher-priced solution than ours. We believe our system will deliver more value to consumers and to our dealers.
It also remains to be seen who can deliver a new system approach to this ailing marketplace as soon as possible. We have stated we will deliver Renovia in the first quarter of 2009; Russound has stated it will deliver its system in the second quarter. It'll be fun.
Shifting gears, as a true pioneer in the "Green" movement, what else can we expect to see from NuVo in terms of ENERGY STAR-rated products or environmentally friendly business practices going forward?
It's important to make a distinction here. We've been careful not to position ourselves as a "green" company, and have never said our products are "green" products, because that wouldn't be quite true. We're going down that green road, but like many companies and individuals, we've got a long way to go. We're still learning. We choose to view each day as another opportunity to get greener. It's a process, a path, and a philosophy.
NuVo's goal is to be as energy-efficient and environmentally conscious as we can be. The principles of energy efficiency and environmental responsibility always inform our decision-making process. For example, it is the vision of the NuVo engineering team to make every new or revised product ENERGY STAR-compliant. The Essentia E6G system was the first, obviously. I suspect not all of our products will achieve this goal, but most will. Currently, our SIRIUS tuners are next in line to earn the ENERGY STAR.
Operationally, we have concentrated on rethinking our packaging to reduce waste, weight, and size, and to employ inks and materials that are most environmentally friendly. We no longer double-carton or use five-color ink process on newly manufactured products. All of our products, both domestic and international, are RoHS (Restriction of Hazardous Substances) compliant, and have been since August 2006.
On a more personal level, HAI President and CEO Jay McLellan and I are organizing a volunteer initiative within the Consumer Electronics Association (CEA). Our goal is to develop templates of best practices for smaller manufacturing companies that don't have the resources of Fortune 500 businesses. CEA is also committed to assisting Electronic Systems Contractors to develop best practices and encourage all manufacturers to be good stewards. Doing good for the world and making money at the same time? Amid all of the strife out there right now in the marketplace, these are also pretty cool times.