Introduction

The first half of this year finished with sales dollars down 3%, sales units down 8%, and ASPs up 6% compared to 2006. Calculated average selling prices are up over 5% in 7 of 8 switch types. The following summarizes the switch market and is based on data collected from manufacturers participating in Switch Tracks market information services.

Also, the C&K brand returns as the sale of ITT’s switch business is finalized.

Overall Switch Sales and Booking Trends

In 2006, sales for the total North American switch market ended a seasonal pattern established in 2003 and 2004 where the best performance is registered in the first two quarters then measures move lower through Q3 and improve in Q4. In 2007 we may see a return to this pattern as Q1 made a strong recovery for Q4 of last year and Q2 results moved lower. The graph below shows the sales and booking indexes for the total switch market for Q2 2005 through 2007.

Overall Switch Market Price Trends

For the chartered period below, the average selling price (ASP) and average booking price (ABP) were fairly stable from the end of 2005 through Q3 of 2006. During this period the overall ASP gained slightly and ABP was above the ASP but declining. Then Q4 saw a significant jump in prices that was caused by two factors. First manufacturers appear to be raising their prices. But this is secondary to a mix shift where unit sales of lower priced switches fell at a higher rate than more costly switches. This shift in mix was a quarterly event and a correction occurred in the first quarter of this year. However, selling prices and booking prices for the first half of this year are above last year’s level and trending higher.

Performance by Switch Type

The second quarter versus the first showed sales dollar declines in all but keylock, snap action, and toggle switch types. Units decreased for all types other than keylock and a slight increase for toggle switches. ASPs declined for three of eight types with an overall 4% increase. Q2 compared to a year ago shows declines across all switch types in dollars and units with significant increases in ASPs, except for toggle switch’s slight decrease. Year-to-date growth shows dollars are 3% lower with losses in all types other than rocker and tact. First half units are down for all types and ASPs have seen significant increase over 2006.

When compared to the last quarter, booking dollars were lower in all eight groups and units decreased in all but snap action switches both finishing about 4% to 5% lower in total. A significant mix shift in rocker and slide switches led to significant ABP increases over Q1. Booked dollars in Q2 versus a year ago were down in all types and most significantly in DIP, rocker, and tact. Units were down uniformly for all but toggles. Booked prices rose for five of eight groups and in total. Year-to-date bookings contrasted to 2006 is very similar to the comparison to Q2 of last year with slightly better results. The YTD change in the ABP for push buttons is driven by considerably fewer, lower-priced products being booked versus a year ago The table below shows the growth rates for bookings dollars, units, and average prices over the previous, same quarter and first half of last year.

The C&K Brand Returns

ITT Industries purchased C&K seven or eight years ago. When it did it retired the venerable C&K brand in favor of its own. At the end of July ITT completed the sale of its switch business to Littlejohn LLC, a private equity firm. At the end of July an announcement was made that C&K Components is the new brand and company name for the former C&K Components of Newton MA; the Rudolf Schadow Company of Berlin Germany; and the Jeanrenaud switch company of Dole France.

C&K Components becomes a division of CoActive Technologies, a maker of electromechanical switches, interface controls, keypads, dome arrays and modules that is headquartered in Hong Kong. CoActive Technologies is owned by Littlejohn LLC.