John, all I'm saying is that there are obvious things that have to be done and covering all your costs and adding a margin for profit is obviously a basic requirement. What you seem to be saying is that the price of a product can never be too high since it assures the producer a long life. What I am saying is that there are various price points in the market, so that one has to be able to hit the target squarely and then to have enough volume for a long enough period for things to work and to allow you to develop newer products and continue the cycle. The problem appears to me that these companies initially seem to be on the right track, but that they hit a rough patch with sales going down due to how quirky the audio market is. |
The company still exists from what I can tell, and has concentrated on its Anthem line. Correct me if I'm wrong. |
Did the SF people move on to another venture? Are they still "in the business" under a new name or working for other people? I can't imagine that design talent just disappeared. |
Pbb, so then by your theory, the companies that went out of business did so because they overpriced their products? Obviously if the market felt that they represented a good value for the money, they would sell enough units.
There are plenty of companies who sell products in the same price range as Sonic Frontiers and Aragon, that are still in business. So either these two companies were not selling enough units, which would be hard to believe since most believe they represented good value, or their profit margin per unit was not high enough. FWIW, when you have a low profit margin, you would have to sell many more widgets to stay afloat. You cannot expect to sell as many Audio Research units as Denon units would sell, therefore the profit margin has to be different. When you have a high end company trying to sell units at Denon/Sony profit margins, that company won't be around for long, because they will never sell as many units as Denon/Sony.
John |
I second Hales. I just picked up a set of Concept 5s'. What a speaker. The other speakers I have are now standing in a corner. |
I was wondering exactly the same thing about roofing contractors. Why is it that you hire them and they give you a ten year guarantee and then they have disolved in two years and formed a new company....?
Perhaps the barriers to entry are too low and competition too fierce and the high end customers a fickle lot which chase the latest marketing hype. Perhaps high end audio has overshot the mainstream customer (cheap systems, even the dreaded Bose, are on the whole pretty darn good). Dunno...good question, as I sit here in Houston airport there is not a single Audio magazine available at the newstands.....but tons of stuff on home improvement, cars,fitness, PC's, self-help, hollywood celebs and regular newsmagazines. Fergilicious was on the cover of one magazine....mmmh hard for a black or gold amplifier face plate to compete with that!!! |
Pbb, they make the gold for the Far East. I've been told that 75% of the North American high end manufacturers business is from Asia. The Asians like gold, and shiny looks. That's why silver and gold are so popular with high end manufacturers. Not for the USA, but for their main customers in Asia, where black is repulsive.
FWIW, I agree with you, I prefer black faceplates. |
John, no what I am saying is that the price that was asked for the product was probably correctly set to enable the manufacturer to make enough money to stay in business. But all this hinges on how many units the manufacturer can sell. You are saying that their lack of staying power only results in having set their prices too low, had they done otherwise they would still be in business. I'm saying that the fickle nature of audio buyers is what kills them. Using your logic, cars would still be the province of royalty and the moneyed and would still be made by hand by Rolls-Royce, Hispano-Suiza and Dusenberg. I am sure there is a different story behind the demise of each of these companies or of these brands and that too low a selling price is not necessarily the issue. |
As a follow up to my first answer, now I think I know what caused the demise of Sonic Frontiers: I was looking at the new listings for the day and there was one for an SF preamp, looked at the pictures and now I'm certain I know what done it: the ugly gold faceplate! Why would anyone not want anything but the beautiful black faceplate I will never know. |
Nice replies from all. Some of the companies mentioned I did own-Spica,Apogee,once considered Kinergetics(did I spell that right)at one point. Alas gone but not forgotton.
Bret |
Pbb, first of all it's bass ackwards. Secondly, I don't really understand how you said anything differently than what I said. Different words, but the same general philosophy. You are saying these companies went under because they didn't charge enough money for their products, correct? That is what I was saying.
Or are you blaming the consumer and not the company? I would tend to disagree with this. Ultimately, the company can only blame themselves for their financial liability. I cannot blame the company I work for if my finances aren't in order. It's simple economics, if you aren't making enough profit margin to stay in business, you either raise your prices, cut corners or go out of business. Especially if your theory is correct, and people out here are just dying to pay more money.
Obviously, designing, manufacturing and marketing hi-fi electronics is not what some manufacturers make it out to be either. Otherwise, they'd still be with us.
FWIW, companies that offer exceptional value and cannot stay afloat because of it is not limited to audio. That is why the Hudson automobile company went under many years ago. Naturally companies love to get their foot in the door by offering exceptional quality at bargain prices. Once in the door, you have to play the game in order to stay in the game. That would mean to lower quality and/or raise prices to pay the price of doing business.
Otherwise, you wind up in a "Do you remember?" thread.
John |
John, you have that back asswards: they don't gouge the buyer, so they don't reap the rewards of the fundamental equation of high-enders, that is more money always equals better sound. Designing, manufacturing and marketing hi-fi electronics is not what high-enders make it out to be. That people can't comprehend economies of scale and that they believe that companies who can only build things in small runs, and consequently sell at prices that are way too high, produce the best sounding equipment is what normally kills companies offering products with a superior price/performance ratio. The other outfits have latched on to this reality and are only more than willing to inflate their prices to sell their stuff to people who need to inflate their fragile egos. |
Klipsch bought the name a few years ago, as I recall, then the Aragon name quietly disappeared into the audio abyss.
Many of these companies go out of business because they offer too much value. They are not getting enough monetary return on the quality they put out and cannot remain afloat. One has to make sure the profit margin is enough to stay viable.
John |
Add Hales - a great speaker company |
Apogee speakers-the stages could do vocals like no other speaker I've heard.
Dunlavy speakers- another buyout and shut it down story.
Sonic Frontiers-I agree that was a shock. |
Spica, too. Some of the best loudspeakers made, at affordable prices. They were bought by an electronics company, then shut down. I spoke to the original owner (John Bau) about this once. He seemed quite surprised and disapointed. He sounded like a man of principal, saying how he wanted to make great speakers people could afford, and refused to pursue the crazy $$ high-end market. A real shame and loss to the high-end market.
Regarding Aragon, they were associated with Acurus. Are they gone too? |
The disappearance of Sonic Frontiers always intrigued me as their products are still popular in the used market and still sell for fairly decent prices. |
