This is our flagship amplifier. I had the idea of 'something' for a long time but it was pretty nebulous. But along came a customer that wanted something beyond our MA-2s, and was willing (he said) to wait, **but also to pay for it**. If anyone is still CONFUSE, there's NO hope. |
Martykl, thanks for the question. I'm not exactly sure how to answer- it might help to tell the story of the MA-3.
This is our flagship amplifier. I had the idea of 'something' for a long time but it was pretty nebulous. But along came a customer that wanted something beyond our MA-2s, and was willing (he said) to wait, **but also to pay for it**.
So I really had to think about what an amplifier like that would really be. I went though 15 chassis concepts and about 7 major circuit concepts before I settled on something that I thought we could build but also suited the 'idea'. That process took 7 years and involved a few blind alleys. Ultimately we lost money on the original amplifier, which is pretty normal on any R&D project.
Now to your question- what would such a preamp even look like? There are a lot of questions to be answered, and we have an issue of perspective- from where I sit, we already make the state of the art in that the existing MP-1 has a patented direct-coupled (and very reliable) balanced output. It has no feedback, and only 3 stages of gain from the LOMC phono input to the output of the linestage. It can drive headphones directly (something most tube preamps can't do without additional circuitry) and is fully differential and balanced from input to output.
I don't care what preamp you are talking about, what I just put in that last paragraph is a mouthful of SOTA stuff.
So to give the question justice its simply going to take time, but since this is the 2nd time this has been asked of me maybe I better devote some time to it... |
Response34,
No need to apologize.
I wish you the best of sucess with your Purity Audio Design products.
Best Regards, |
A question for Mr. Atmasphere,
Were you to design the best linestage of which you are capable, without regard to cost, and applied the "standard mark-up" formula you referenced earlier:
A) Where do you think it might weigh in?
B) What do expect the cost (per pound) might be?
We can do the rest of the math.
It might be enlightening for the OP, given the specific question he raised. (I'm kinda curious, too.)
Marty |
charles1dad... I apologize if my post came across as someone here suggesting that companies should not make a profit. I meant it as a general statement as it has been suggested (indirectly) in various threads over the years that companies should not use the excuse of recovering R&D for thier pricing.
It was simply refreshing to see grannyring's post.
Again, my apologies. |
08-30-11: Pubul57
True, it is not infinitely elastic, but it can stretch pretty far, why you often seen 10 different tiers of cables running from $3/ft to $3,000/ft - you just never know how much demand there might be to have the very, very, very, absolutely very best.
Pubul57 (System | Threads | Answers | This Thread) This could be the reason Magico is raising prices on the new Q series speakers. Probably miscalculating the high demand? or/both price increase of Al. |
Doesn't matter how far it stretches, it still obeys the supply, demand and price principle. |
True, it is not infinitely elastic, but it can stretch pretty far, why you often seen 10 different tiers of cables running from $3/ft to $3,000/ft - you just never know how much demand there might be to have the very, very, very, absolutely very best. |
If price rises, demand will decrease. There are fewer buyers that can afford it no matter how much status it bring you. If you can't afford it, you can't afford it. |
In economics, "Veblen goods" are items for which buying preference increases as price increases -- as the higher the price, the greater the status -- instead of decreasing according to the law of demand. In other words, one is buying something other than the thing itself and the price untethered from the cost of production or necessarily the inherent quality or function of the goods - the essence of luxury goods (and in audio, having lots of parts and multiple boxes, the heavier the better, the more one can extend what the "market is willing to pay" ). |
08-30-11: Pubul57
Because some art is an investment grade asset driven by the psychologogy of scarcity creating "value", and a marketplace with enough buyers for whom having enough money is a small concern. Spending $1,000,000 to get $2,000,000 five years later for some dried paint doesn't seem irrational, though perhaps inexplicable. Though there does not seem to be a correlation between complexity and simplicity and the price of art, unlike some "modern" linestages.
Pubul57 (System | Threads | Answers | This Thread) It's the same free market and capitalistic "COMMON SENSE" principles whether it's automobiles, line stage, paintings ... The price is ultimately driven by demand for purchases made for investment or personal enjoyment. |
Because some art is an investment grade asset driven by the psychologogy of scarcity creating "value", and a marketplace with enough buyers for whom having enough money is a small concern. Spending $1,000,000 to get $2,000,000 five years later for some dried paint doesn't seem irrational, though perhaps inexplicable. Though there does not seem to be a correlation between complexity and simplicity and the price of art, unlike some "modern" linestages. |
Seeings this tree of a thread has branched off in many directions, it's my turn.
My curiousity has me wondering why/how some artists can charge so much for their paintings??? I mean how much does canvas and paint cost anyway? And worse, there are people who pay these prices, millions sometimes. Wow.
Don't know why I had those thoughts (or do I). :-) |
You know, like soup kitchens for a rainy day.
As to uber prices, it is not a rip off if the sound is commensurate with the cost, even accepting the law of dimishing returns - unfortuanately some expensive products justify the expense and some do not - eventually the market figures it out, but it can take a long time, especially against concerted advertising and "review" campaigns. |
"Socialist merely want to use goverment to counter extreme capitalism and to provide services"
Tongue in cheek I surely hope Tbg. |
Charles1dad, I think it would be a communist who would say that capitalists are ripping off the consumers. Socialists merely want to use government to counter extreme capitalism and to provide services.
Under capitalism the buyer is expected to seek quality at the lowest cost. This may include pressing the dealer for the very lowest price. Similarly there is no such thing as an uber price. Rather there will be a high price that no one or few will pay and the manufacturer will either lower the price or cease production. |
Hi,
Response34, I don`t recall a single post during this thread where anyone said or even suggested a company should`nt make a profit. There`s been in fact quite a few here(myself included) who openly support capitalism and free market principles.
Some of us have question the "uber" high prices of some components in terms of price/value, but realize that`s clearly up to the buying public to make that call, as it should be.
Refreshingly this thread so far has been free of the socialist-like view that all these high end companies want to do is charge "unfair" prices and ripoff the helpless consumer.
Best Regards, |
Pubul57
I think you do know the answer for NAD. Small margin, but very high volume over many years. Just a different business model and marketing strategy. Bet NAD sold/sells more units then the Constellation preamp in one day part.
In addition the technology used in that one integrated was also used in many other NAD pieces of high volume. NAD sells many items in their total line so the costs of R&D are also spread out over many products - many high volume products.
Both models can work, but close managing of costs is paramount in both models. |
It is a miracle that NAD was able to recoup all their R&D costs with a $220 integrated amplifier - I guess selling a million units helped on the profit front. |
Thank you Grannyring for your post on 8-27 where you go through some of the cost of running a company and developing upper end products.
Our Purity Audio Design linestage was reviewed in that same Absolute Sound issue as the Constellation pieces. While this was not an inexpensive linestage, we have other models above this.
We have spent the last several years developing this line and this kind of R&D is not even close to being cheap. Overhead of running such a company is is not small and you still have to pay the bills even during the R&D stages.
Bottom line is that it is still a business. The price of products is based on many things (not only the cost of parts used) and since you did such a good job of going through most of them in your post, it will save space in this post.
I still don't understand those who do not think companies should make any profit. I'm sure they don't go to work everyday and work for free. |
Charles1dad, regarding your examples- I don't know about all of them but I know about some and those are good examples. |
Charles1dad,
Did not mean to imply my system was all that .... Really just pointing out my experiences and I sure wish I could have another listening room with an equally well thought out "simple" system with SET tube amps. I have a place in my heart for them. |
Pubul 57,
Nelson Pass is an excellent exampe of a proven brilliant designer who devotes much thought and energy toward developing great designs as simply as reasonably possible. His newest First Watt SIT amplifier is a further advance along that path.
Grannyring I don`t question the quality of your system,I know there are complex components that sound very good. It just seems that talented designers who use their creativity and resources get better results following the simplicity path as opposed to the complex,multi-part,mutiple stages approach. |
On the amp front, the best sounding SS I have ever heard were some the Pass Aleph 3/2 and the J - all very simple in physical terms of parts and circuit - but always driving easy and sensitive speaker loads. Driving a tough speaker may require more complexity to deal with the load and necessary gain - it does seem his mantra is get the job done as simply as possible; which of course requires some serious design skills to execute - why haiku can be so difficult to do well -- simplicity is difficult. |
Charles1dad,
My current tube pre is a well executed, pretty simple design and the best I have yet to hear. I share the same general assumptions as you, but I have not heard enough to say simple is best. I just don't know for sure. I would love to live with a well reviewed $70,000 pre for a month or so:-)
Over the years I have assembled many good sounding systems. One that was particularly pleasing included 3.5 watt set amps, zero oversampling battery powered dac, belt drive transport, single driver horn speakers and both a passive and simple active preamp. Great sounding system that however did not match the realism of my current system. My current system is more complex if you will. Soundlab M1 speakers with an active crossover which is much more complex then my past horn speaker.
My current 600 watt/channel amp is more complex then my 3.5 watt SET amps to be sure and so on..However the end result of this system is more like the real thing.
I bet I could assemble another simple system as good as what I now think is my reference, but just have not gone in that direction as I am most content.
In the end, I am not sure one way is better then the other. I just don't know. |
One other thing for us to consider. If we rest and stay put on known current simple and complex designs, then we will never progress and learn what is possible.
I say continue to develop on both fronts (simple and complex) to the benefit of all Aphiles. |
Well it's not necessary if you're not shooting for the very, very best and trying to push SOTA.If using established means and really not pushing the limits is all one wants, then the push for that last vestage of improvement is a waste of time and money.
For others the 10 percent improvement and learning that comes from pushing to see "what if" we took this idea to the limit is a passion and worthy goal.
We all however benefit from the latter with new technology and learnings that result. These SOTA units also make it possible for each of us to decide for ourselves if that small improvement in fidelity is worth it. Without these efforts many of us would wonder "what if" or "what is possible if" and how much better could a stereo sound? We can know by going to a dealer and hearing. |
Up front I `ll admit to being an advocate of free market capitalism. Sellers can set what ever price thay want and the consumer either complies or rejects(for what ever reason).
Grannyring you make some interesting points concerning factors that determine the cost of a product. Where I differ to some degree is the case touted for complexity. Generaliy It seems simpler circuits/designs built to a high standard with superior parts usally sound better(exceptions of course) than their highly complex competitors. While one can marvel at the impressive engineering achievement, many of this uber technical products don`t often past the "natural" sound test i.e. tone and realism of voice and instruments.
I`ve attended numerous audio shows including CES 4 times and have heard many of the praised high power-ultra expensive components and have been rather disappointed. Obviously this is subjective, they can sound very spectacular in an audiophile-hifi realm, but deviate from what natural music really sounds like. The simpler (within reason) circuits tend to sound like the live music I`m used to hearing, organic flow and sheer purity.Ears are good true detectors. Just one humble opinion. |
Grannyring, it was the Constellation review that prompted my original post. It appears to be an enormously complex product for a linestage. Whether or not the Constellation pushes some theoretical state of the art is a question I'll probably never know. But I will ask is that level of complexity and its resulting cost really necessary for top level performance? My gut level reaction is that's it overkill for a device that adds 12dB of gain, switches between sources and adjusts the volume level. It's just my opinion. |
...I find it interesting that "OR" can stand for either Operating Room or Oakland Raiders. Coincidence? I don't think so.
Lately I've been dividing my attention between Irene and this thread. One is a phenomena that is wreaking havoc, upsetting people and causing a lot of anxiety. The other is a hurricane. Onemug, H.S. Thompson has nothing on you ;-) Vbr, Sam |
Correction - Absolute Sound has the Constellation Altair preamp review not Stereophile. |
Applause to Charles1dad for actually backing up his convictions by naming names.
At this point I may be talking out of both sides of my mouth but I think it comes down to what the consumer thinks he is paying for. I believe that Atmasphere's comments are correct when the consumer is focused on sonic issues. The consumer has many choices and the competition is fierce. In accord with basic microeconomic theory a manufacturer in this situation would have a hard go if he tries to price his product significantly above the competition. The situation changes radically if sound quality is not a high priority. If the consumer is buying because of, let's call it exclusivity, then the manufacturer has far more leeway in what he can price his product. The consumer has to believe that the product cannot be easily substituted for by another product of equal or better quality. In their mind there is something unique or exclusive about that particular product. If you want to buy the model of car that won the 1962 24 LeMans, that's one thing. If you want to buy the actual Ferrari that won the race, it's a whole other thing.
Based upon the responses to this thread by actual owners of high cost linestage they very clearly state that they purchased based upon sound quality.
I am not familiar with every company you mention, but I suspect Kondo and Audio Note fall into the exclusivity camp. That's not to say these companies aren't making superb products -- it's only to note that there is heavy mystique surrounding them. Magico has clearly moved into the sound quality camp. When they were doing one-off horns they might have be exclusivity sellers, but that's not the case now. Their product line has diversified and they freely admit that their newer, less expensive products are better than what they sold before. |
“Is it not a fair question to ask what prompts a tripling in price for what essentially should be a fairly simple electronic device?"
Some preamps are not simple in design and are SOTA accomplishments that push the whole industry further. The current issue of Stereophile is a great example with the review of the Constellation Altair preamp for $65,000. Please read the review if you get a chance. They have taken some technology spoken about on many Agon threads, including this one, to the next level. Many "experts" say this is perhaps the finest sounding preamp available. It is certainly reasonable to suggest this preamp and others pushing for SOTA performance have obtained it with something other than a simple design. In fact it is also reasonable to say these units outperform some simple units when plugged into many top end systems.
Simple it not the only way to fidelity and I suppose these SOTA units can be found to recreate music better than some of the best simple units available. If you ask First Sound, Pass Labs and others which preamp they make that sounds the best, they will not tell you it is their entry level design or passive they offer. No, they will tell you it is their top of the line active that is their SOTA effort. Is it because they are liars are just want to make more money? The answer is no as they have a passion for audio and design with that passion.
What does it cost to develop a product like the Constellation Altair preamp? I do know this; many a company has gone out of business because they do not understand (fail) to account for all the real costs involved in the sale of their products. Selling a $65,000 preamp will carry with it many needed costs for sales and marketing in addition to R&D and manufacturing.
C osts such as doing all the shows, travel, sales demonstrations, advertising, developing relationships, total media campaigns, advertising agency work, the considerable R&D time and expense and on and on.... I can tell you companies spend millions developing rather simple food products in R&D alone!
I see nothing wrong or evil with all of the marketing and sales costs involved. They are a must if a company expects to bust through and sell a modest number of $65,000 units.
How many $65,000 units do you think they will sell? This is not a volume business opportunity, but rather a very small number of units will be sold and the modest number sold will need to cover the costs mentioned above. So yes the margin made on the sale is and must be very high. The business model dictates this.
There will always be some examples of products priced at SOTA levels that are really a sham that is unfortunately the reality of humans and life. So beware, but to dismiss honest examples of SOTA passion combined with the needed business model is short sighted. Some attempts at SOTA will not be simple and that is both OK and needed as we all strive towards fidelity. |
Atmasphere,
There are many exceptions to your statement regarding fair market markup.To name a few, Lamm,Kondo,Audio Note UK upper levels,Wavac,Burmester,Magico,Tidal etc. Or are these bad examples? |
Everything is priced at what the manufacturer thinks the market will bear as long as it is sufficiently above costs and a sufficient profit. If it doesn't sell either he lowers the price or goes out of business.
I think 5X parts and labor is the old retail price giving points to the retailer. |
Atmasphere ,Thank you for your participation and your excellent products as well.Evidently you didn't read my earlier posts on this thread.
Your business model may have a simple markup formula and being you sell direct to end users would you agree that your suggested retail and possibly mark up will differ from a Mfg.that sells through franchised dealers.
Further,would an importer also price components differently then you would.
Lets say the industry mark up is 5X the cost.If the cost is $1000 Are you saying that every mfg,will price that component at $5000 and if that component for whatever reason is deemed superior to the competition,would you agree that it I swill be priced much higher with out regard to the cost.
Products for this hobby will be priced at whatever the market will bear
Again I thank you for your participation and your very informative website |
Lately I've been dividing my attention between Irene and this thread. One is a phenomena that is wreaking havoc, upsetting people and causing a lot of anxiety. The other is a hurricane. LOL- Great adaptation of the classic lawyer joke! |
Do you buy into the "urban legend" that some folks mark up the price higher because selling at a reasonable markup, but lower price point, would result in audiophile dismissing the quality of the product?
This may occur in other industries as well, but it seems many believe it to be true in this one. Yes, it must be a competitive market, but you also have to worry about being "too" cheap to be taken seriously as a countervailing pressure. |
Naturally all products are marketed with consideration to cost.What I was referring to was that there are no strict norms as to mark-up.All products will sell for whatever the market will bear. This statement is just not supported by the facts of this industry. Believe it or not, its rather competitive so if someone comes out with an over-priced product they may have troubles selling it. As a result most manufacturers stick to a fairly simple markup formula. |
Onhwy57,
Naturally all products are marketed with consideration to cost.What I was referring to was that there are no strict norms as to mark-up.All products will sell for whatever the market will bear.It is for the consumer to say yea or nay |
Pubul57 , In the old days or golden era as I refer to it.Very few good sounding components also looked good.In fact some not only didn't appeal to the eye the construction was also shabby.Yet,they still sounded good.At least I thought they sounded good but then again I was new to this hobby.
Over time the WAF forced designers to consider better cosmetics.I agree that many of todays components are overdone and that the added value does not warrant the new retail prices but as you stated we are all free to buy or not.
You have a very nice system,Enjoy it. |
Goldeneraguy, I for one wasn't complaining about the price of items or knocking those who buy them. I simply observed that a new, very much higher price level seems to have emerged for top of the line preamps. Is it not a fair question to ask what prompts a tripling in price for what essentially should be a fairly simple electronic device? Could you provide an example of a linestage manufacturer who's product pricing bears no relation to his manufacturing/marketing/distribution costs?
Knghifi, how did I know you would sidestep the questions? I'm just glad I live in a society where people can make outrageous claims and then not back them up. It's all part of the price for a free society. |
08-26-11: Goldeneraguy
...I dont understand why so many here complain about the cost or knock others that purchased one of these so called over priced items.
As for me, I never complain about the price, or a company's profit margins, we are all free to buy or not to buy. What does get a bit of a rise out of me is the belief that you get what you pay for and more expensive means better - it ain't necessarily so, at least not beyond a certain price point, one which I think is lower than most would suspect. At least as sound quality goes, and then there are several aspect of a product that can be quite costly that have little to nothing to do with sound but cosmetics, ergonomics, and pride of ownership (bling factor). |
Hi Charles,
I've been going back and forth on passive vs. active as you know for a couple of years. I find that my passive sounds more real and less in the way, then most of the actives (some sota)that have been through my system.
So my flea powered Franks drives my system to 90+ spl's with ease and enough of the punch that pleases me. Not sure many 300b amps could pull that off but as you often state YMMV.
Regards, |
Onhwy61,I believe you feel that components are or should be priced on a cost plus basis.It just isn't done that way. Every item has a Market Price.This price has nothing to do with its cost.
If a manufacturer's suggested retail price is competitive
to its competition it may survive.
If it is superior in quality the maker should reap a very healthy profit.
If it is inferior well,who knows what will happen.
If an end user feels the product is over priced or he simply cant afford it he has the option not to purchase that product.Not all components are priced for the masses I dont understand why so many here complain about the cost or knock others that purchased one of these so called over priced items.
|
Onhwy61, you don't have to be sorry but if you are still confuse, then you are beyond my ability ... out of bullets. Good luck! |
A manufacturer will charge whatever the market will bear. It has nothing to do with design, manufacturer cost ... as long as there is demand for whatever reason. Knghifi, sorry I don't understand. Perhaps you could provide a few examples of high end linestages that fit your model of business behavior. Alternatively, you could explain how demand for higher end linestages is unrelated to design considerations or manufacturing costs. |
Thorman: "The Manufacturers operate at a Mark up of 500%...Thats the reality of it....."
I suppose that's true from one perspective, and I've heard that parts cost typically is only about one-SEVENTH of the RR$.
But do understand, first, that the manufacturer is lucky to get 1/2 of that retail price, and then labor, plant overhead, customer service, administrative costs, product-development costs, and last and only last, profit have to be covered in that wholesale price. Lots of hi-end-equipment manufacturers are NOT profitable and eventually die. Certainly some hi-end manufacturers are profitable, but to blab with no apparent understanding that equipment manufacturers operate on a 500% markup is simply idiot.
. |
Mitch4t and C1ferrari,
glad you appreciated the humor.
In this day of acronyms, I find it interesting that "OR" can stand for either Operating Room or Oakland Raiders. Coincidence? I don't think so.
Looks like it's been heading southward from my 8-23 post.
Lately I've been dividing my attention between Irene and this thread. One is a phenomena that is wreaking havoc, upsetting people and causing a lot of anxiety. The other is a hurricane. |
Sam I see where you`re coming from, nothing wrong with that approach to system building at all. We all choose are own way to musical joy. |
