SecProbe.io

CORRESP
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corresp

Brian H. Blaney

Tel. 602.445.8322

Fax. 602.445.8603

BlaneyB@gtlaw.com

November 16, 2005

VIA FEDERAL EXPRESS AND THE EDGAR SYSTEM

Securities and Exchange Commission

Division of Corporation Finance

Mail Stop 3561

100 F Street N.E.

Washington, D.C. 20549

Attention: Howard Baik

    Re:

    Directed Electronics, Inc.

    Amendment No. 1 to Registration Statement on Form S-1

    Filed October 17, 2005

    File No. 333-127823

Ladies and Gentlemen:

     We express our appreciation for your prompt and thorough review of Amendment No. 1 to
Registration Statement on Form S-1 (“Amendment No. 1”) of Directed Electronics, Inc., a Florida
corporation (the “Company”). On behalf of the Company, we are responding to comments on Amendment
No. 1 provided by the staff (the “Staff”) of the Securities and Exchange Commission by letter dated
November 2, 2005. In conjunction with these responses, the Company is filing Amendment No. 2 to
the Registration Statement (the “Amendment”) via EDGAR.

     Pursuant to our discussions with the Staff, the Company’s responses to Staff comments Nos. 1
through 13 are indicated below, directly following a restatement of each comment in bold,
italicized type. Please note that the Company responded to Staff comments Nos. 14 through 19 by
letter dated November 10, 2005. To further facilitate the Staff’s review, the enclosed courtesy
copies of the Amendment have been marked in the margins to indicate the location of revisions made
in response to the corresponding comment numbers.

Summary, page 1

    1.

    SEC Comment: We note your response to comment 1 of our comment letter
dated September 22, 2005. We reissue the comment as it applies to the sections entitled
“Our Competitive Strengths” and “Our Strategy.” This information is more appropriately
discussed in the complete business section. Please revise.

    Company Response: Pursuant to your request, the Company has further revised
the prospectus summary. The Company believes that the revised prospectus summary
complies in all respects with Item 503 of Regulation S-K.

ALBANY

AMSTERDAM

ATLANTA

BOCA RATON

BOSTON

CHICAGO

DALLAS

DELAWARE

DENVER

FORT LAUDERDALE

HOUSTON

LAS VEGAS

LOS ANGELES

MIAMI

NEW JERSEY

NEW YORK

ORANGE COUNTY, CA

ORLANDO

SACRAMENTO

SILICON VALLEY

PHILADELPHIA

PHOENIX

TALLAHASSEE

TOKYO

TYSONS CORNER

WASHINGTON, D.C.

WEST PALM BEACH

ZURICH

www.gtlaw.com

Greenberg Traurig, LLP | Attorneys at Law | 2375 East Camelback Road, Suite 700 | Phoenix, Arizona 85016 | Tel. 602.445.8000 | Fax 602.445.8100

Securities and Exchange Commission

November 16, 2005

Page 2

Our Business, page 1

    2.

    SEC Comment: We note your response to comment 4 of our letter dated
September 22, 2005; however, we note that you continue to state that you “have
increased revenue consistently every year for the last 15 years.” Please revise to omit
or balance this disclosure with net income trends for the past 15 years.

    Company Response: Pursuant to your request, the Company has revised the
disclosure to omit the language referred to in your comment.

    3.

    SEC Comment: We note the information you provided in response to
comment 5 of our letter dated September 22, 2005. It is unclear how the information you
provided supports your statement referenced in the first bullet point that you are the
“largest designer and marketer of consumer branded vehicle security and convenience
systems.” Please revise or provide additional support.

    Company Response: Pursuant to your request, the Company has revised the
disclosure to clarify that the Company is the “largest designer and marketer of
consumer branded vehicle security and convenience systems” based on sales.

    4.

    SEC Comment: We note your response to comment 5 of our letter dated
September 22, 2005. We note that the information you provide indicates that James E.
Minarik is a member of the Board of Industry Leaders for the Consumer Electronics
Association and a governor in the Electronic Industries Alliance. However, it is
unclear how this information supports the statement that James E. Minarik is widely
recognized for his industry leadership. Please omit the statement, or revise to
describe his positions in the CEA and EIA.

    Company Response: Pursuant to your request, the Company has revised the
statement in accordance with your comment. As revised, the statement now reads that
James E. Minarik “is a member of the Board of Industry Leaders for the Consumer
Electronics Association and a governor of the Electronic Industries Alliance.”

    5.

    SEC Comment: We note your response to comment 6 of our letter dated
September 22, 2005. We reissue that part of our comment asking you to disclose in the
prospectus how you are a “leader” or the “largest designer and marketer.” For example,
it appears that you are measuring leadership in terms of market share and sales revenue
and that you are relying on the report by Bobit Business Media. Please also tell us
whether this Bobit report was prepared specifically for you. If so, tell why you have
not named the preparer as an expert and included a consent pursuant to Rule 436. In
addition, we note that you have obtained a consent from Consumer Electronics
Association. Please tell us why you have not filed this consent and named Consumer
Electronics Association as an expert.

    Company Response: Pursuant to your request, the Company has revised the
disclosure to clarify that the Company is the “largest designer and marketer of
consumer branded vehicle security and convenience systems” based on sales.

    The Company believes that the Bobit Business Media (“Bobit”) report does not
constitute information from a report or opinion of an expert or counsel and
accordingly does not fall under Rule 436, the rule that would require a consent to
be filed as an exhibit to the Registration Statement.

Greenberg Traurig, LLP

Securities and Exchange Commission

November 16, 2005

Page 3

    Bobit is the publisher of Mobile Electronics magazine. Bobit routinely conducts
over 200 studies across 20 markets each year. The published results of one of these
reports was attached as Exhibit B to the Company’s response to comment 5 of the
Staff’s letter dated September 22, 2005. This report, which the Company did not
request and did not provide any compensation for, was a 2004 survey conducted by
Mobile Electronics magazine that asked a question of industry retailers
substantially similar to those in the 2005 Study discussed below regarding their
most preferred security/keyless entry and remote start products.

    More recently, the Company requested Mobile Electronics to conduct a market share
study (the “2005 Study”) for the Company’s different brands, for which the Company
paid a fee to Bobit. Due to the nature and complexity of the 2005 Study, and the
breadth of the industry, Mobile Electronics is the only industry source able to
conduct the research because of its wide circulation and subscriber base, and
because of Bobit’s research capabilities. The methodology of Bobit’s research was a
broad, independent survey of retail subscribers from the Mobile Electronics
subscriber base, not retailers solely affiliated with the Company.

    The 2005 Study does not focus solely on the Company’s brands, but rather on the
total retail market size of audio, video, security, and remote convenience products,
including the market share of the Company’s competitors. According to Bobit as set
forth in its report with respect to the 2005 Study, the purpose of the 2005 Study
was to (1) determine overall industry size and market size of security, remote
start, keyless entry, and related accessories; and (2) determine market share of all
brands sold in the marketplace. To further this end, the questions Bobit asked in
the survey relating to the 2005 Study were general questions regarding which brands
the retailers carry, and what percentage of their sales were accounted for by each
brand. Thus, the information obtained from Bobit constitutes general industry
information that was not, and was not designed to be, specific to the Company. In
many respects, the 2005 Study was a follow-on and update to the prior survey in
order to provide the Company with more detailed information regarding its market
share.

    Furthermore, the 2005 Study is not summarized or quoted in the Registration
Statement. Accordingly, the Company does not believe that a consent from Bobit
pursuant to Rule 436 is required or appropriate.

    The report from the Consumer Electronics Association, while not publicly available,
is available to the general public for a nominal cost. The Consumer Electronics
Association report entitled “U.S. Consumer Electronics Sales & Forecasts 2000-2005”
is available for $149 on the Consumer Electronics Association website at www.ce.org.
Neither a password nor membership to the association is required to access the
website. Further, the report was not commissioned by the Company but rather is a
research tool used by analysts to track the consumer electronics industry. The
report contains general industry information and is not specific to the Company.
Therefore, the Company has not named the Consumer Electronics Association as an
expert in the Registration Statement pursuant to Rule 436.

Risk Factors, page 3

    6.

    SEC Comment: Please note that the meaning of terms in the summary must
be clear from their context. Please revise to disclose the risks that you are referring
to, rather than cross-referencing to the risk factors section.

Greenberg Traurig, LLP

Securities and Exchange Commission

November 16, 2005

Page 4

     Company Response: Pursuant to your request, the Company has revised the
prospectus summary to disclose certain of the material risks facing the Company.

Industry, page 48

    7.

    SEC Comment: We note that you provided crime data in connection with
your statement that “[i]n 2003, content theft from vehicles amounted to approximately
$1.6 billion in the United States;” however, we were unable to locate support for this
statement in Exhibit F. Please revise or advise us.

    Company Response: Pursuant to your request, attached to this letter as
Exhibit A is a report from the U.S. Department of Justice, Federal Bureau of
Investigation, entitled “Crime in the United States 2004.” This information
recently became available and updates the 2003 data. The Company has indicated in
this report, which is publicly available, the support for the relevant statements
contained in the registration statement.

Executive Compensation, page 71

    8.

    SEC Comment: We note your response to comment 20 of our letter dated
September 22, 2005. Please revise to include the 2005 compensation in the table, rather
than in a footnote.

    Company Response: Pursuant to your request, the Company has revised the
Summary Compensation Table to include 2005 base salary information for the “named
executive officers.” Please note, however, that certain of the information relating
to “Bonus” and “All Other Compensation” will not be available until after the
Company’s fiscal year end on December 31, 2005. Accordingly, the Company has noted
this in footnotes to the Summary Compensation Table.

Certain Relationships and Related Party Transactions, page 76

    9.

    SEC Comment: We note your responses to comments 28 and 41 of our
letter dated September 22, 2005 and that employees purchased the convertible promissory
notes. Please tell us whether any current or former members of management were among
these purchasers, and if so, describe these transactions in the prospectus.

    Company Response: Pursuant to your request, the Company has revised the
disclosure in Certain Relationships and Related Party Transactions to describe
purchases of the convertible promissory notes by any director or executive officer
of the Company, and any security holder known to the Company to own more than five
percent of any class of the Company’s voting securities.

Sale Bonus Agreements, page 76

    10.

    SEC Comment: We note your response to comment 21 of our letter dated
September 22, 2005. Please quantify the cash and stock that each named executive will
receive. In addition, we note that you have only filed the sale bonus agreement for Mr.
Minarik. Please file each of the sale bonus agreements that were entered into with
related parties.

    Company Response: Pursuant to your request, the disclosure under “Sale
Bonus Agreements” has been revised to reflect the amount of cash and restricted
stock units that each named executive will receive. Supplementally, please be
advised that Exhibit

Greenberg Traurig, LLP

Securities and Exchange Commission

November 16, 2005

Page 5

    10.5 is the form of Key Employee Sale Bonus Agreement for all key employees except
Mr. Minarik. Mr. Minarik’s Sale Bonus Agreement is Exhibit 10.4. The form of Key Employee
Sale Bonus Cancellation Agreement for all key employees except
Mr. Minarik will be filed
as Exhibit 10.20. The Sale Bonus Cancellation Agreement
with Mr. Minarik will be filed as
Exhibit 10.21. Except for the specific key employee percentages
(which will result in different disclosed amounts to the named executive officers),
all of the agreements for key employees other than Mr. Minarik are the same.

Associate Equity Gain Program, page 76

    11.

    SEC Comment: We note that you have revised your disclosure regarding
the associate equity gain program. Previously, you disclosed that executive officers
were included in the associate equity gain program and that executives would be paid a
separate termination fee in connection with this program. In your current disclosure,
you state that none of your executives are participants. Please explain this
discrepancy and revise your disclosure to describe the associate equity gain program
before and after this offering and any termination payments on an individual basis.

    Company Response: Please be advised that the Associate Equity Gain Program
(Exhibit 10.6) provides that program payments will be distributed solely to
“Qualifying Associates,” the definition of which excludes, among other persons, (i)
all members of the Company’s Executive Committee, and (ii) each member of management
and any other employee who either has an ownership interest in the Company or who
has been formally offered an opportunity to invest in the Company. The Company has
confirmed that no executive officer participates or is eligible to participate in
the Associate Equity Gain Program.

    Pursuant to your request, additional disclosure has been added to “Associate Equity
Gain Program” to clarify that the program will be terminated upon the completion of
the offering, and to also state that no individual will receive more than the
specified amount of cash and restricted stock units.

Principal and Selling Stockholders, page 78

    12.

    SEC Comment: We note your responses to comments 23 and 24 of our
letter dated September 22, 2005. Please disclose that none of the selling stockholders
are broker-dealers, as indicated in your response. Please also revise footnote (4) to
disclose the affiliation with a broker-dealer and name the registered broker-dealer.

    Company Response: Pursuant to your request, the Company has revised the
disclosure regarding principal and selling shareholders to indicate that none of the
selling stockholders are broker-dealers and to disclose the name of any registered
broker-dealer with which any selling shareholder is affiliated.

Description of Capital Stock, page 80

Common Stock, page 80

    13.

    SEC Comment: We note your response to comment 25 of our letter dated
September 22, 2005. We note that holders of Class A and B common stock were entitled to
dividends. Please tell us whether you intend to pay any dividends in connection with
the conversion or in connection with this offering.