Interview – Linear’s ‘next logical step’28 April 2010
As reported recently on IE Residential, Linear LLC has announced a new integrated business unit to co-ordinate responsibilities for Niles Audio, Xantech and ELAN Home Systems. Based in Carlsbad, California, the new operation, Linear AVC Group, is headed up by Mark Terry, an experienced industry executive perhaps best known for his association with Harman Professional. He spoke to IER about the timing of the changes, the implications for R&D and future product plans.
Q: Why is now the right time for this kind of fundamental reorganisation?
A: The state of the economy over the past two years, coupled with the pace of new developments in technology, has fundamentally changed our market, and we need to change to meet the needs of this new market. The reality of the situation is that everyone in this industry has suffered declines in sales in pace with the decline of the overall economy and the decline of the housing market in particular.
At the same time, however, technology has not stood still. It has shifted from an AV focus to a home automation focus, from proprietary systems to IP systems, from physical media content to streaming media content. By operating as a single group, Linear will be better able to leverage its resources into the design of a new generation of distinctly branded solutions that meet differentiated market needs.
In a very important way, this move is the next logical step forward in the growth of the individual brands. Over the past several years, Linear has acquired a number of extremely strong companies in the installation market. Our goal is to strengthen the focus and independence of these brands while maximising the value proposition each brand brings to its customers.
Q: How do you think it will help Linear to respond to the changing requirements of the integration community?
A: The formation of a centralised Audio Video Control Group is going to help us respond to the changing requirements of the global integration community in a faster, more focused and differentiated way. One of the top priorities at the group level is to establish an overarching strategy that takes the individual strengths of the brands and focuses them on producing collective results that benefit each of the brands and their customers.
When I was president of the Harman Pro Group, this is precisely what we achieved. We took eight distinct, stand-alone companies and identified their individual ‘centre of excellence’. Each company then produced technology and products that fundamentally benefited the entire group. This is the vision that I bring to the new Linear AVC Group.
Q: What implications do the changes have for R&D?
A: I believe that a co-ordinated R&D initiative will allow Linear to focus on the big, long-term technology trends that will define the future of our industry while our individual companies continue to do what they have always done best – focus on individual product development programmes that meet the unique immediate needs of their customers. Collectively, Linear has significant resources that can be brought to bear on defining the long-term technological road-map that will benefit each of our companies, and through them our loyal customers who expect the very best from ELAN, Niles, Xantech, Sunfire, HomeLogic and Aton.
Q: To what extent has Linear been affected by the global downturn, and what is your feeling about the likely market conditions for the rest of 2010?
A: As you no doubt know, our industry is directly tied to the fortune of the residential housing market. And that market has been severely impacted for the last two years. Our sales have been affected accordingly and, while we cannot predict when the housing market will begin a sustained recovery, we do believe that it has bottomed out. We also believe that, as it recovers, a new generation of homebuyers will be entering the market.
This generation of buyers has grown up with devices that provide them with integrated control over discrete applications. They will expect their houses to feature whole-home automation control functionality. Our goal as a group is to be ready with the next generation of fully differentiated, feature-rich automation system solutions that meet the needs of specific market segments.
Q: Without giving too much away, what can we expect from Linear new product-wise before the year is over?
A: ELAN, Niles, Xantech, Sunfire, HomeLogic, and Aton all have very well thought-out 2010 product marketing programmes that will succeed in exceeding their dealer and consumer expectations. These programmes are well underway. Our challenge is to leverage our collective strengths [and] capabilities into new technologies that will be introduced in 2011 and 2012. I feel confident that you will see some very exciting innovations in that time frame!
Mark Terry was speaking to David Davies.