Jack Aarde: And is there any overlap with these 22 demo customers that — are any of them existing WiSA HT customers or any brands? Just wonder if there’s overlap?
Brett Moyer: Absolutely. There’s overlap with our existing HT people. But the majority of them, they may be the same company. But as we talked about for, call it, 18 months now, the new price points lets us go to new designs. So where we may be in a high-end architecture price point system and Harman had us in the citation line, well, at half price or 70% less, we can now talk to other product managers about other solutions. So that’s true for a lot of companies, right?
Operator: Our next question will come from Kevin Dede with HC Wainwright.
Kevin Dede: Can we look at industry inventory levels for a bit, Brett? Maybe you can just give us a little more assurances on how you see the CE market sort of bouncing back? I think given it’s — you made a great case for new product introduction. But I think the elephant in the room is whether or not you think consumers are going to snap. And I think a lot of that — at new stuff, a lot of that’s predicated on what’s available now. Maybe you could just walk us through what you’re thinking there?
Brett Moyer: Yes. So we can talk about the industry or we can talk about the risk to WiSA’s performance, right? So from our perspective, the bounce back is less significant than the Rio launch is less significant than the new product launches from a technology perspective in terms of driving full year growth right? From an industry perspective, we still see POs move from quarter 1 to quarter 2, quarter 2 to quarter 3, I mean current quarter to next quarter, not saying Q1, Q2, right? But from our perspective, the industry has known that they had excess inventory and overbuilt and undersold clearly, clearly since Q2 last year. The new inventory was out of balance and they missed 2021’s Christmas, but all signs indicate would have told any CE brand that Q3 was terrible, Q4 was terrible, et cetera, right?
You saw a lot of discounts in October, November. So from my perspective, when I say I think it comes back in line, I’m forecasting that 12 months is sufficient to address inventory imbalances, whether it’s cutting price or cutting production or all of the above, right? So that’s our basis for saying the industry should get aligned to the new demand levels by midyear.
Kevin Dede: Okay. That’s helpful. I like the way you professed your answer, though, Brett. Looking at it from a risk profile because I think that begs the question on the sourcing side. Given pandemic issues on component availability, maybe you could talk to your comfort level and seeing the product you need to meet demand you’re hoping for.
Brett Moyer: So I believe for us supplying to our customers modules, there are no issues. We have not gotten any issues on the Rio 5.1.4 build for Q3. The feedback we are getting from our customer — module customers is less around part shortages and more around just don’t need more product right now. Definitely times have shrunk. Could there be an IC that comes up short for somebody? Maybe. But that’s not the message primarily that we’re getting. Primarily, we’re getting the message of we don’t need product right now.
Kevin Dede: Okay. So little — I guess, little risk on your supply and your manufacturing, your ability to deliver, but greater risk on anticipation for end customer demand in the second half? Is that a fair assumption?
Brett Moyer: That’s a fair assessment, it’s for the HT products, right?
Kevin Dede: Okay. So you have much more confidence in addressing a larger market sort of in the mid-tier range or even lower tier for…
