Article about Wilson Audio in Fortune Magazine

[Da5id4Vz]

I found this article in Fortune magazine today:

http://www.fortune.com/fortune/small...460275,00.html



It is interesting to see what the "normal people" think about this.


Wilson's quest for quality has paid off handsomely. In 2002, the company says, it managed a $350,000 profit on sales of $7 million. At the same time, Wilson Audio owns the ultra-high-end market for speakers (north of $10,000), with a 50% share of that category.

[roddyama]

Originally posted by Da5id4Vz
Wilson's quest for quality has paid off handsomely. In 2002, the company says, it managed a $350,000 profit on sales of $7 million. At the same time, Wilson Audio owns the ultra-high-end market for speakers (north of $10,000), with a 50% share of that category.

Hi David,

I think I would be surprised if $7M was 50% of that market. I would have guessed that market to be somewhat larger. How may companies are there that sell speakers for >$10,000?

[Da5id4Vz]

Well these have to be the Wilson numbers and were likely not verified by the author.

From the statement the annual world market for >$10k speakers (stereo pairs or does this also include x.1 systems) is <$14 million. I guess there a lot of different ways of looking at this. The irrational, entrepreneur, audiophile wants to create the Roddyamaphone brand $20k loudspeaker featuring custom finishes and cryogenically treated TAD components.

From the text of the article it sounds like the company has a large portion of its overhead (its only admitting to a 5% return, and what good small entrepreneur would admit to more than that) is going towards educating and consulting with dealers and customers.

The consultation would have to be an important part of the business model. The people who are plunking this kind of cash down want to know that they are getting the very best. Consultation helps to support the owners need to know that they are getting what they are paying for.

Showing the customer that they have over 50% of their market segment also supports this need to know.

I have no recollection of ever hearing or even being in the same room with a Wilson Audio product. It would appear highly unlikely that I will ever have the miens(sp?) to consider such a purchase either.

I feel somewhat challenged by the claims of perfection. Is it there? Is my hearing good enough to appreciate it? Can I differentiate what Mr. Wilson does compared to what the devoted DIY members achieve?

[Peter Daniel]

Originally posted by Da5id4Vz

I feel somewhat challenged by the claims of perfection. Is it there? Is my hearing good enough to appreciate it? Can I differentiate what Mr. Wilson does compared to what the devoted DIY members achieve?

Materials and technology used to create Wilson's enclosures might not be available to most DIY members. Modyfied drivers, as well as years of experience in measuring loudspeakers and voicing them, might be another advantage Wilson has over DIY member.

[phase_accurate]

I once had the chance to listen to their Sophia model. To make things short: It is a beautifully sounding speaker with excellent craftmaship which I assume they will sell quite a lot to their typical customer.

But I can also say that my self-made Manger speakers still sound more like the "real thing" (O.K. maybe it's just because they are mine ) than these babies.


Regards

Charles

[Da5id4Vz]

I think that feeling challenged is usually more about personal doubt than it is intimidation. Its in that context that I made my remarks.

The manufacturing methods and procedures shown on the Wilson audio web site are more than impressive. High capitol expense for devices like the CNC cabinet machinery insure a uniform and ultra high quality product.

Advanced composite materials, applied where appropriate and not just for the sake of using them, I’m sure makes a huge difference also.

I’ve had the privilege to work with a few very talented acousticians. I also once had a summer job fixing stereos for Professors at a music school. From these experiences I know that there are people with extremely and legitimately discerning hearing.

I remain uncertain where I land between these people and the ones who love the sound of low bit rate MP-3. Highly engineered and evolved products such as Wilson Audio’s provoke me in this way, as do even simple yet innovative approaches to DIY components.

[Jocko Homo]

That is less than 10% return. I have investments that make more than that. Which is another reason not to build high-end audio for a living.

I suspect that the profit does not take into account the expenses of keeping a high-maintainance wife.

I hope that Dave doesn't read this.........[joke]

Jocko

[Da5id4Vz]

I don’t think that it is uncommon for businesses to minimize profits to 5% or less through strategic capitol purchasing.

If you have a really good year, it can more sense to upgrade the CNC mill, or buy the latest Audio Precision or TEF than it does to pay more taxes out.

Keep in mind that this 5% may be independent of all salaries and other compensation too.

[Jocko Homo]

"Salaries and other compensation". I feel safe in saying that is where most of it went.

Jocko

[faustian bargin]

...not if they also want to minimize income tax. a company car is a good perk, and additionally it can be depreciated.

additionally, why would they publicize their actual profit margin? don't you think they would be motivated to lowball that just to keep the tax man unawares?