Blog

Keeping Pace with Apple

This Executive Station earned the 2012 Innovation Award and will debut this month. The iPad communicates with the keyboard via Bluetooth and allows you to type onto your iPad and listen to music via the speakers on the sides. This will be available in hotel rooms and in the retail market.  Far Right, from top to bottom: 1. SDI Technologies Headquarters in Rahway, NJ. 2. iHome is one of just four companies with the license to use the Air Play technology. Now, the iPhone acts as a remote control and communicates wirelessly with these stylish speakers. 3.  Products show the history of the company, including Realtone radios and SounDesign stereos. 4.Waldorf Astoria wanted SDI to design their own iPod dock with a larger footprint than the average iHome and a hi-fi look. This docking station is at the bedside in every Waldorf hotel room.

The Angel News Speaks with Ezra S. Ashkenazi, President and CEO of SDI Technologies, the maker of iHome, an Apple licensee, on what it means to innovate for today’s market.

Interview by Victoria Dwek

It’s a drizzling Friday in March when I pull up to the SDI Technologies building in Rahway, New Jersey. From the outside, it looks like a typical office building, but as soon as I enter the foyer, it’s evident that this is a place where innovation happens. The front showcases show the electronics of yesteryear, the original radios made under the brands Realtone and SounDesign. A timeline shows the evolution of innovation throughout the company’s 56-year history. This is a company that is proud of its history. Today, though, I’m going to speak to Ezra S. Ashkenazi about the future. I want to learn about the innovation process. How do ideas and new technology come about? What drives the concepts behind the need to constantly offer the customer newer and better products—while doing business and keeping pace with the leader of innovation, Apple?

This Executive Station earned the 2012 Innovation Award and will debut this month. The iPad communicates with the keyboard via Bluetooth and allows you to type onto your iPad and listen to music via the speakers on the sides. This will be available in hotel rooms and in the retail market.  Far Right, from top to bottom: 1. SDI Technologies Headquarters in Rahway, NJ. 2. iHome is one of just four companies with the license to use the Air Play technology. Now, the iPhone acts as a remote control and communicates wirelessly with these stylish speakers. 3.  Products show the history of the company, including Realtone radios and SounDesign stereos. 4.Waldorf Astoria wanted SDI to design their own iPod dock with a larger footprint than the average iHome and a hi-fi look. This docking station is at the bedside in every Waldorf hotel room.

This Executive Station earned the 2012 Innovation Award and will debut this month. The iPad communicates with the keyboard via Bluetooth and allows you to type onto your iPad and listen to music via the speakers on the sides. This will be available in hotel rooms and in the retail market.

 

Ezra Ashkenazi: Before we begin the interview, I want to acknowledge the following: I’m humbly representing my dedicated partners, colleagues, our parents for instilling in all of us the qualities of honest hard work and faith in G-d, and Hashem for all of his blessings.

When Steve Jobs said, “People don’t know what they want until you show it to them.” He understood the technology he had in his back pocket. He understood the patents that were coming around that he could incorporate into mass production. Even though he still has the most expensive MP3 player or tablet in the market, he is usually ahead of the game. He had the perfect formula.

The Angel News: In our recent e-Biz workshops, one of our presenters, Hymie Betesh also mentioned that quote—but said even though Steve Jobs said that, he really does respond to the customer, by giving them more of the products they like, and quickly discontinuing the ones that don’t sell.

EA: Steve’s also the customer. He was always unhappy with the product on the market. Same with our company. We’re customers. We see what’s on the market—we’re travelers. We’re staying in hotel rooms—how many times are you awoken unexpectedly at 4 AM or 6 AM because the alarm mode was left on the day before by the previous guest who was rushing to the airport? That’s your first morning in that hotel room—not so cool. So we created a “single-day” (TM) patented alarm chip that we incorporated into all of our hotel clock radios, whether there is a dock or not. Excluding vacation, most people stay in hotels for an average of 1.5 nights. It doesn’t take anything away from the customer to offer a single-day alarm. It also reduced the number of wake up calls the operators are responsible for. It increased efficiency and satisfaction. Customers before had been annoyed that there wasn’t a single-day alarm even though they didn’t know it was an option.

We are our best customer. We’re merchandisers. We’re innovative. We love fashion, and we can tie all that together and think, what do we want when we travel? Today, we have the #1 market share in the hotel bedside business, because we were the first to market. Consistently being first to market is 90% of what a company needs to sustain its #1 position.

It’s not enough to think of an idea—you have to sustain it too. By having a patents. By constantly recreating the cabinetry, to make it more user-friendly and tying in the latest technology, like docking. By including special shielding, so there is no static and interference from other devices.

What other consumer needs did you fill through innovation?

EA: In 1993, we went out to get the Timex license for our clocks/clock-radio categories. They didn’t even have a licensing division! We gave them the idea to license. Even today, there are brands out there that are not licensing that companies can go after, and there are brands which are licensing but haven’t thought of every category. Think out-of-the-box.

We were the first to incorporate nature sounds into a bedside clock radio. That taught us we can make a profit in a highly dense 30-year-old category. In 1997, we saw the Sharper Image Catalogue offered a $200 portable travel clock with nature sounds. ‘Wow, that’s a big price,’ we thought. ‘Not too many people can afford that. Let’s put it into a bedside clock radio for $20, $50, and $100.’

You need to have quality to be sustainable. Whether it’s a t-shirt or electronics, or a telephone, which can be a life-saving device. Today, retailers monitor consumer satisfaction. They monitor returns. It’s not about how much profit we can make on the sale, but does it stay sold and is the customer happy? Quality is essential; branding is essential. And innovation and being first to market is essential.

How do you generate ideas for fresh concepts each year?

EA: Communication. By having weekly meetings—with many different departments, even if they aren’t in the product development or innovation team. When all different personalities and talents get together in a room, for four hours a week over lunch, you get to learn about your colleagues. Then they get to talk, about what they want and need in a product. “My daughter said she wishes she had this,” a salesman might say to an engineer. Or, “Oh, my wife says her product doesn’t do enough…” “What should it do?” Those are the seeds of innovation. Our employees are our in-house focus group.

Very few companies bring semi-unaffiliated departments together. When I had an opportunity to reengineer the marketing and development of our company, I said I wanted to bring our people more often together…it’s all about communication!

How was the iHome born?

EA: It came about three months after we began to hold these lunch meetings/brainstorming sessions with different departments. After three months, owners/management could have said that nothing came of them. Then one day, a member of the team pulled out an iPod. It was the first model. I had read about it in an electronics magazine. He said, “You have to hear this, it sounds really good. I have 100 songs on it.” Mp3 players were on the market, but they were not very good in quality or design. Apple had a really cool and unique looking product. I thought, “This is great, this is the future.” And the team member said, “Yes, I think so.”

I looked across the room at an existing Timex CD clock radio. We wake and sleep to radio or CD, I said. Why can’t we wake and sleep to the iPod? Why can’t it talk to our alarm clock and vice versa? The engineers talked tech talk, and then they turned to me and said, “Ezra, we think you got something.” This was 2004.

After that meeting, the next day, I called Apple. They said we would be the 3rd or 4th audio licensee. There are 3500 now globally in numerous categories. At the time, they had just begun licensing speaker companies such as Bose, JBL, and Altec Lansing. We were not a real speaker company back then; today we are considered a leader in the field. When I told the Director of Licensing our idea, he said “That’s ingenious. When can we meet? I want to see what SDI Technologies is all about.” Three days later, he flew from California to New Jersey. He was impressed. He asked how long our company had been in business—at the time it was about 50 years. He said, “Apple is going to be the hottest company the world has seen. This will propel your company more than in its 50-year history.” He was right.

We’re Apple’s number one audio licensee and iHome is marketed  in 70 countries. We always reinvent the iPod clock radio. We diversify, develop portable products, and keep reinventing the clock radio. We’ve been first to market in a lot of categories, it’s in our DNA!

What are you doing to innovate today?

EA: Today, we’re going beyond Apple related products. We’re developing products for Android, the Samsung Tablet; and Smart Phones in general. It just takes a slight modification of a design and software. Our docks for Android, called SmartDesign, will be co-branded with iHome and debuting in April.

Does that double the market for iHome?

EA: It will take time because the Android user isn’t using their smart phone as much for music, even though it has almost the same capabilities. We’re also creating products for the Kindle Fire. The Kindle Fire added an audio element. You can download and listen to audio books and music. Our dock for the Kindle Fire will also be marketed under SmartDesign by iHome—that will debut in July.

Electronics, it seems, moves faster than most industries. What do you need to stay on pace with developments in the industry?

EA: For the Kindle Fire, we will be the first docking clock radio to market. We have teams of in-house industrial engineers and designers who understand mechanics of sound chambers, wires, and shielding. There are very few companies that can support development as quickly as we can. We’re already thinking about three or four features the next tablet will have and incorporating their features to be compatible with our devices.

We have to anticipate, and if we guess right, we have advantages to our product. As people upgrade their phones, we hope they will upgrade with their audio systems too.

Will we be hearing Siri’s voice throughout our homes?

EA: We may already—we have AirPlay. With AirPlay, the iPhone pairs with wireless speakers throughout your home. It’s Wi-Fi based, and the speakers stream music from your iPhone, iPod Touch, or iPad. It acts like a remote control.  Before, BlueTooth based speakers could communicate with your iPhone within 30 unobstructed feet. With Wi-Fi, the range is much further. Soon, very few products will be docking.

We were one of the first to develop AirPlay for Apple. We developed it with them—and only four companies at the time were granted the license to use the technology—iHome, Bang-Olufsen, JBL, and Denon.

With your Timex license, their name is on your product. But what does it mean when you have an Apple license if their logo isn’t on your products? It seems like a very different type of license.

EA: That’s a good question—it’s a software license. We are incorporating Apple’s patented pin connector. That’s what we put into each product.

So not anyone can develop a product for Apple.

EA: You have to have an agreement with Apple to be able to use their pin. We can then put the “made for iPhone” badge on the box, but not on the product.

So not anyone can make a dock, but anyone can make a case?

EA: That’s correct, you don’t need a license for a case, just for their technology.

What other items do you need a license for?

EA: Anyone who makes a product that charges or plays an Apple product has to pay a royalty. There are different rates for each category.

So, with Apple, being first to market is very important. You can’t take your time because you have a license.

EA: Right. And—Apple approves the quality today. In the beginning, they weren’t happy with the quality of the products that some licensees were producing. So they’ve tightened up lately. Let’s go look at some of the products.

Leave a Comment