Worst DIY Installs Ever Part 7
10 Must-Have Products for Your Next Install
6 Amazing High-End Home Theaters
8 Awesome Turntables for Spinning Vinyl
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$20,000 Theater-in-a-Box Has High-End A/V Components, AMX Automation, Xbox 360+HD DVD, iPod Dock
SE2: The Business
Pyle sold his stake in Aurant in 2005 to found SE2, although he and his former colleagues had been working on an all-purpose box for years.
A prototype ITC was shown to a few dealers in January 2006, where feedback was "phenomenal," according to Pyle.
Some local Salt Lake City integrators have installed the product already, but SE2 will make its official debut at the CEDIA Expo, where the company will begin accepting dealer applications. "We don't see a problem with market demand," Pyle says. "It's about how fast we want to grow."
He anticipates selling about 500 units in 2008.
Four people including Pyle work full time at SE2, but the company also works with about 30 contractors. Pyle expects to have about 15 full-time employees by CEDIA. The company has 11 patents.
The next product in the line will be a cheaper box in a plastic case -- ideal for classrooms and boardrooms, Pyle thinks. He does not anticipate coming down much in the home theater market; in fact, a higher-end solution, maybe in the neighborhood of $30,000, would be the next extension in the ITC line.
SE2 has gone through a couple rounds of funding and now has a larger VC on board.
The Good & Bad of a Theater-in-a-Box
The SE2 -- and the effort that went into it -- is a remarkable achievement; however, this product isn't for everybody. The purists will want to pick their own components and customize their own remote controls, probably one with a touchscreen or at least an LCD display. (No, the touchscreen on the ITC chassis is not removable for use, just for servicing.)
Many dealers will want to incorporate the ITC into a whole-house system, but you really can't. If the doorbell rings, you can't get a picture of the visitor in a PIP on the screen.
There really is very little tweaking that integrators can do on their own.
SE2 at CEDIA
Since Vidikron supplies the video processors, SE2 will be shown at the Vidikron/Runco booth, #510.
Then again, that's the beauty of the system, which can solve so many problems for integrators: dealing with dozens of different vendors, even getting access to certain vendors, storing piles of components, building racks, dealing with discrete codes, crimping cables, and generally getting everything to work. The ITC just works. SE2 burns in every system for 36 hours before shipping it.
Many integrators will see the complete integration as a margin-killer. Cables, racks, fans, remotes, and programming can be a nice boost to the bottom line. But what dealers lose in accessory sales, they gain in higher-volume installations. What's more, if the home theater electronics are only $20,000 total, the client can put more money into higher-end screens, furniture and acoustical panels -- things that don't tend to break.
In addition, dealers will save plenty in the service department. They won't get calls because a cable disconnects from a component. They won't get blamed when the Internet goes down. They won't have to fret about a system overheating.
And here's a good one: How hard is it to find good A/V installers? With the ITC, you won't need so many of them to install and troubleshoot a system.
If there is a problem with a system, SE2 can tap in remotely, diagnose the problem and fix it. If they can't fix it, now that's a problem. The company voids a lot of warranties with the ITC. Pyle says SE2 itself warranties the system for five years.
So what if SE2 goes out of business? That's a whole lot worse than if the manufacturer of your broken A/V receiver goes away. Just buy a new receiver. Putting so much faith into a non self-serviceable system could frighten more than a few integrators.
Bottom line: If I were an integrator, I'd sleep a whole lot better the night before the Superbowl if my customers had integrated home theaters where little can go wrong.
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19 Comments (displayed in order by date/time)
Yes, bym051d is right.
The drive on the right is the HD-DVD drive which is only used for movies and not gaming. The drive on the left is the DVD-9 drive that is used to play the games.
Story should be updated with this info.
Thanks for catching this. Sorry for the lapse.
Mike Pyle is delusional if he thinks someone will buy this product. Number one it looks ugly. It’s why you see so many manufacturers nowadays put a great deal of money into enhancing the cosmetic look of their product (ie-Kaleidescape). The concept is a good one although I have a feeling that in the end it will be a waste of time and money.
Aurant tried the same approach several years ago with building systems for dealers and then shipping it to them. Again a nice pie in the sky idea but it failed.
Don’t get me wrong. I have a great deal of respect for what Mike has accomplished in this industry. If Mike could design the product to look better, show everyone that he plans to stay in business and support this product, and market the heck out of the product maybe he’ll prove me wrong.
Good luck selling that ugly baby to a homeowner. [Or to anyone else for that matter…what were they thinking?]
...I think I just vomited after looking at those photos again.
Like any home theater “rack”, this product is not meant to sit in the open next to your TV. It would probably go in a rack in a remote room or a cabinet near the display.
Okay, I can see this product maybe getting a place to sit in a cabinet near the display, but certainly not a remote room. What happens when I want to change games or take my iPod outside?
It’s an interesting concept, but why integrate an Xbox and for that matter, why HD-DVD? For $20,000 I could offer a custom a much better custom solution and give them a choice of a Nintendo Wii, a PS3, or an Xbox. And by the way, the PS3 is the gaming console of the coming year. The Wii is still revolutionary, but the PS3 will have its day very soon. The Xbox 360 should be used as nothing more than a Media Center Extender or to play Halo.
Instead of a grey metallic finish to the outside, which makes it look something like a college dorm refrigerator and a mainframe server, dress it up in a nice wood cabinet with various color stain choices and let’s situate it near the popcorn machine in a dedicated home theater room. As is, the only place it can be put is inside a cabinet.
Ed,
The ITC can be configured for Xbox and Wii. We basically have 2 drive bays with the main drive as the Xbox 360. The second drive can be either the HD-DVD or Wii. The PS3 is a very nice console but not that easy to integrate from a user experiance stand point. We will be coming out with other drive options once we see what the market demands.
We also went with the 360 as a great way to access Windows Media Centers.
Since we are a modular system we can put anything we want in the box. We just went with what we think is teh best solution out now. Things can and will change.
This is a very high performance high end system. The game console is the least important part of the system.
It really does look pretty nice in person. It has a very timeless architectural feel. Everyone that sees it in person falls in love.
That being said I really like your idea of the wood cabinet concept.
It is great to get different perspectives and ideas real time. Well mostly 
Thanks,
Michael
So what do we tell the customer when a drive goes out on the Xbox? Sorry, but we will have to take your whole system down while we send it in for repairs? That’s one of the best things about seperat components, when something breaks, it’s easy to toss in a loaner or just replace it. That’s why TV/DVD/VCR combo’s never caught on as a main unit, great for the extra bedroom or Rv, but not the main TV.
Jeff,
Good point!
that is why we made every part of the ITC modular. We send out a new drive and the end use can just swap it out. No configuration or programming needed.
With TV/DVD/VCR Combo you got multiple cheap parts and none of them worked very well by themselves much less as a complete solution. With the ITC we use best of bread components.
Most of the AV gear available is built with Features and price at the top of the list and usability, performance, reliability, and serviceability are way down the list if there at all.
Again thanks for the comments!
Michael
Wow—this looks pretty cool to me. And obviously the system is genius or why else would top notch manufacturers like Vidikron, Bryston, Transparent Audio and AMX work with the company? Sounds like someone is jealous of a good idea ...
Ben
I agree with Julie’s comments that this product is designed for rack installations where the client won’t see the system. The premise of the system and Mike’s understanding of the market are what should make this product interesting to clients.
I will add if a client is looking for equipment to display there are plenty of brands that offer performance and industrial design that will fit those consumers’ criteria.
In that scenario a dealer should be selling a client into Meridian, Halcro, Mark Levinson, Sonus faber and Linn for example. I also wouldn’t judge the product by a Web graphic. I recommend to check it out for yourself at CEDIA in a few weeks.
Wouldn’t it be cheaper for a dealer to sell the homeowner a Middle Atlantic BRK rack, a Crestron AMS (which incorporates a high-quality surround sound processor, 4 zone multi-room, and control processor), with a good quality DVD player, and choice of gaming system all for less money and money making potential?
Again I think Mike has come up with a good idea but if I’m a betting man I would say the above scenario I posted above is the better way to go.
The Crestron system is fine, but the combination of Bryston, Triad, Transparent and AMX is top-of-the-line and as a plug-and-play system install with the margins that Mike’s line proposes is worth investigating from an installer’s perspective.
What type of margins is Mike saying that dealers will make on his product?
This idea seems like ACS Contracts part 2!
Looks like 1 XBOX360 and on XBOX HD-DVD drive, not 2 XBOX360s.