Why did high end audio manufacturers take the wrong path in manufacturing gear?

@p05129 

You obviously missed Adam Smith's pin factory analogy. Also there's something known as the economies of scale. High volume manufactures rely on standardization and repetitiveness to make their mass produced products economical for the consumers buying them. How many parts do you think that go into building a Honda Civic that aren't used on every other single product in Honda's line up? Almost none! The only thing that distinguishes one model from another is it's sheet metal and the way the individual parts are organized and configured.

Expensive European cars with the exception of certain "entry level" models are made to order in not very large numbers. Not to mention that most customers lease them and beat the snot out of them while they have them and once traded for a new one after 36 months or so the dealer's auction them off and you find them for sale at the Audubon Hoopty Ville on the Auto mile to ordinary people trying to look prestigious with upside-down financing with a lot of addons. The dealer's know full well that the commitment on the note will never be met (though they still make money) because the first time something breaks the car will come of the road and usually wind up in impound and if there is anything left to it, it will be auctioned again on the tuner market. Hence the 50% depreciation. On the other hand, buy a Honda, Toyota or Subaru, make your payments and take care of it, you actually have an investment!

Speakers may only have a few parts but R & D is expensive in any industry, you simply have to advance the state of the art at any price level to remain competitive and you know what? With the enormous diversity of new products available to hobbyists, with how their tastes change and the way they move products through their systems there is an equally enormous glut of very reliable used products for enthusiasts to choose from that keeps production volumes low and costs high. That's why you can easily pay thousands putting a basic, relatively speaking, system together.

Oh, no one pays 10% on a credit card or personal loan, how about 20%+ - 30%+!

I wonder if this discussion would apply to stepping up models within the same brand. In considering two MM cartridges within the AT brand, both use the same resin cartridge body and same microline nude diamond tip, but one has a boron cantilever and the other aluminum. Will I be able to hear the difference? I realize it's only a $50 difference, but that still represents a 20% premium. Now apply this to moving up within a premium cartridge line like Lyra and the cost differences are many hundreds or even thousands between models. 

Don't get me wrong. Even at the low end of the hobby that my system occupies, I would probably buy the boron cantilever version because I would think it cool to have a more exotic stylus assembly. Will I hear the difference? Probably not but it will make me feel better.

Otoh, planned scarcity sometimes creates a demand on the part of the consumers.

The Berlin Philharmonic has released two sets of boxes of live performances with Herbert Von Karajan at the helm.  These are radio tapes remixed as SACDs.  Each release was limited to about 1500 sets.  I didn’t know about the first box, released last fall, and now it’s gone.  The second box is out, costs around $350 from the BPhil site (approximately $18 per disc).  The repertoire is less interesting to me than Box1 but I am tempted because of the scarcity.  Needless to see these are not available for streaming.  There are many other big box releases by record labels that have done well with limited releases.

  Now manufacturing an audio component has greater costs than releasing physical media, but scarcity comes into play here as well.  I rushed to buy an Oppo 203 that I didn’t need when they announced that they were going to stop manufacturing UDPs, as a hedge against my 105 ever falling.  Years later the 105 is still going strong, and I spin a disc once a month in the 203 just to make sure it still works.

  The whole audio market is shrinking in the West as our generation dies off.  Otoh our generation has all the money.  So it’s a challenge for HEA to extract those last dollars from us.

  The new customers will come from the East, as they are becoming more prosperous and in general appreciate audio and music more than our younger generations.  By creating a scarcity niche here, the HEA brands hope to boost their cred in the Far East Markets 

@p05129    What is your point of this thread?

Exclusivity is a major driver in any high-end market.  Trying to apply a basic "value" model to these types of products is simply not valid.  I am a big Porsche fan but I don't try and justify a new 911 every year for basic transportation.  The driving enjoyment and the quality of the product simply outweighs the cost for me.  One can make the same argument for high-end watches and audio as well.  Even though Porsche is suffering financially they are continuing to push new technologies and, if anything, even higher quality standards to differentiate themselves.  This, along with proper scale for the market, is key for this type of business model.  In today's market if high-end audio companies try to live mainly on the products of their past they are destined to fail.