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Fame and fortune: Klegg Electronics owner links with celebrity to compete with industry giants.

When Paula Abdul handed out Klegg Minis to audience members on The TonyDanza Show in February, she did more than put the smallest color-display MP3 player into the hands of eager recipients. The American Idol diva put the spotlight on a product developed by a black-owned firm.

The brainchild of Dennis Gentles, the Klegg Mini has appeared on CBS and NBC, on VHI's The Fabulous Life (on which Abdul performed while holding the MP3 player) and at the Virgin

Megastore in Times Square (where it was the focus of a three-day promotional event).

So what's the buzz about, you ask? Well, it's all over a 1.8-by-l.6-inch MP3 player that holds up to 250 songs and 10,000 images. It sells for $49.99 to $99.99, depending on memory size, via the company's Website (www.klegg.com) and at select retailers. The product was developed and manufactured by Las Vegas-based Klegg Electronics Inc., which Gentles, 32, launched in 2003 with $70,000 of his own money. In addition to MP3 players, the company's consumer products line offers slim-line televisions and high-end home theater systems.

Klegg's current product lineup includes the M6 501 surround-sound home theater system, the KP line of plasma televisions, the R6150 and R6110 LCD remote controls, and the C7 and I9 in-wall/ceiling speakers. Using technology and aesthetics as a foundation, the firm's engineers have designed a home theater system with speakers that are only slightly larger than a credit card yet powerful enough to provide "thunderous but precise base resolution," explains Gentles.

The 13-employee company got its start as a distributor for a European-based consumer electronics brand, which Gentles later purchased and brought to the United States. Having previously run a computer consulting firm for 10 years, Gentles says his dream was to build a business that could bring consumer electronics products together in a seamless fashion through home networks and similar systems.

Working with a third-party marketing firm, Gentles set out to find a musically-oriented spokesperson who could spread the word about the Klegg Mini. Abdul's association with American Idol made her the perfect choice. Gentles offered her a combination of company stock and cash in exchange for touting the product in the national media, on the company's Website, and in other venues.

Currently, 24 dealers distribute Klegg's products nationally. In addition to high-end dealers such as Sound City, new retailers include Speaker City in Burbank, California, and Audio Vision in San Francisco; HomeTronics Lifestyles in North Haven, Connecticut; Summit Sound in Bangor, Maine; and TV Specialist Inc. in Salt Lake City. Gentles hopes to increase the number of dealers to 65 by the end of the year, and Klegg has just closed on a deal to sell the Minis at Tower Records.

Company sales have grown from $240,000 in 2005 to an expected $1.5 million this year, and several new products-engineered around marketplace needs and an aesthetically-pleasing design--are in the cards, including media server products. Gentles also plans to open retail stores that would focus on custom home installations for consumers.

Knowing the potential of the MP3 market alone, Sean Wargo, director of industry an@is for the Arlington, Virginia-based Consumer Electronics Association, sees potential for small firms that can rise above the noise generated by Apple's iPod. Sales of portable MP3 players more than doubled in 2004 to nearly 7 million units, accounting for $1.2 billion in revenues, according to the CEA. "Those brands that harness the opportunity and offer targeted products to a specific consumer group will definitely find opportunity in this growing market," Wargo says.
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Title Annotation:BLACK DIGERATI
Author:McCrea, Bridget
Publication:Black Enterprise
Geographic Code:1USA
Date:Aug 1, 2006
Words:599
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