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The Singing Machine Sees Investor Buzz Over New Products And Anticipation Over Upcoming Holiday Season

The Singing Machine (OTCBB:SMDM) has seen some significant trading volume in its stock the past few days, perhaps in anticipation of increasing sales this holiday season and the release of some new karaoke machine products later this year.

CEO Gary Atkinson believes his company is in just the right spot to take advantage of karaoke's increasing popularity.

He says that big box retailers are now looking for products to fill spots on shelves once filled by devices that have been made obsolete by Apple's (NASDAQ:AAPL) iPhone and iPad.

"Electronic retailers are seeing consumer electronic product categories being cannibalized by Apple and they are starting to look for other popular entertainment devices to fill their shelves," Atkinson says.

"There are not a lot of categories left that the iPhone hasn't replaced, but the karaoke machine offers a good solution for retailers as it provides a good, healthy margin for them."

Indeed, the company's CEO says that between the boom in reality performance shows like American Idol and the popularity of the machines themselves, electronic retailers are seeing karaoke as a " not just a niche business".

The company - whose karaoke machines, accessories, karaoke music downloads, and musical instruments are sold under the brands of Singing Machine and Sound X - reported a 26 per cent rise in net sales in its latest fiscal year ending in March, to around $25.9 million.

The Singing Machine already has a number of partnerships with big box retailers nationwide for the sell-through of its products, and has signed "a lot of commitments with new retailers" for this coming holiday season.

As a result, the company is optimistic for the coming fiscal year.

It is also planning to release a number of new products in time for the upcoming holiday season - its peak sales period - with an iPad-docking karaoke machine along with a Retina display iPad App designed specifically for the new machine to provide thousands of streaming karaoke songs available for subscription.

The new iPad-docking product will be able to play karaoke music from over four different sources through the machine, Atkinson says, including through iPhone, a USB drive and through conventional CD+Gs.

For 2012, the company has also redesigned its flagship Pedestal Karaoke line, which is the company's most visible and highest revenue generating line of products. New features will include recording functionality, easier music downloading experience, as well as enhanced iPhone support.

For the 12-month period that ended March 31, net income for the company swung to $463,000, an increase of over $1 million, compared to a net loss of approximately $599,000 in the last fiscal year.

The first to provide karaoke systems for home entertainment in the US, The Singing Machine sells its products in both North America and Europe.

The company, which emerged from bankruptcy in 1998 and underwent a restructuring in 2004, has come a long way.

In 2009, it launched its online karaoke music download business through a partnership with content provider Stingray Digital, and became the first karaoke company to provide legal karaoke downloads, with a selection of more than 8,000 titles.

The company's products are now featured across 1,800 stores across the US, with plans to expand its presence abroad.

In March, the company appeared on ABC's daytime entertainment talk show The View. The karaoke machine maker's 4TV device was featured in a Dr. Gadget segment, which highlighted five of the coolest new gadgets on the market.

Dr. Gadget, a radio and TV personality, showcased the product during a one minute clip and described it as the "new wave and new evolution of karaoke."

The Singing Machine 4TV is the industry's first home karaoke machine to support digital karaoke downloads in MP3+G format. The 4TV product also offers a USB microphone and remote-control as well as an interactive user interface.

On Friday, 1.5 million shares of the company's stock was traded on the over-the-counter market in the US, with almost 100,000 shares changing hands Monday. In the last month alone, its shares have more than doubled in price.