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Old 4th February 2013, 10:48 PM   #71
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In the early to mid 90's I designed a number of listening rooms for customers of an ultra high-end audio line. The top loudspeakers of that line were $125,000 per pair as I recall.

The cabinets were certainly well made, but not stunning, the driver complement per side was 2 each 30cm Dynaudio woofers, accompanied by line array of 8 each Dynaudio dome mids and tweeters.

That many costly drivers will add up, but still, $125,000? I asked the owner of the company why they were priced so high. His immediate and matter of fact reply was "They are worth what customers will pay for them."

It was an honest answer. With the question of what is something worth, a necessary coefficient is "what is it worth to who?". They were certainly not worth that to me, but I couldn't really make the blanket argument that they were not worth the asking price since they were selling (and selling well for such a stratospherically expensive item).
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Old 5th February 2013, 03:57 AM   #72
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Well, this thread is silly. How come it costs $10 at the diner for $0.75 of eggs, toast, and coffee? Because it's a freaking business and that's what people will pay to have it prepared and served to them. They probably didn't even have any R&D costs on those eggs.
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Old 5th February 2013, 04:22 AM   #73
Pano is offline Pano  United States
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Sure they do. Millions were spent on the researching which came first, the chicken or the egg? They have to pass those costs on, you know.
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Old 5th February 2013, 04:25 AM   #74
FE3T is offline FE3T  Norway
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Originally Posted by Charles Darwin View Post

Almost every VW employee owns a VW.
One of the perks working for VW is (or was) that they can buy one VW per year at cost (by which I mean actual cost, not dealer prices).
After a year they can still sell them at a profit.
I got a similar reminder when i worked as a VW/Audi tech, but then i had allready learned quite a bit about the cars and the work shops business moral. I refused and got out of that business a couple of months later.
Now, more than 10 years later, i still refuse to consider a car from VW or Audi.

Last edited by FE3T; 5th February 2013 at 04:32 AM.
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Old 5th February 2013, 04:46 AM   #75
a.wayne is offline a.wayne  United States
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Ok we get it you love your Trabant ........
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Old 5th February 2013, 05:34 AM   #76
JMFahey is offline JMFahey  Argentina
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Driving a Trabby is cool !!!
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Old 5th February 2013, 08:08 AM   #77
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One thing that has not been mentioned is the time it takes to develop a speaker. Lynn Olson has often stated that it takes a designer at least 6 months to properly dial in a speaker design. That amounts to a lot of costs in terms of building rental and other overheads, never mind the salary of a good designer like Lynn himself. I am sometimes surprised that the manufacturers selling 'cheaper' loudspeakers survive. You'd have to move. Quite a bit of volume to pay for R&D. That is also why something like the Ariel is such a bargain. If the Ariels had to sell commercially they would have been pretty expensive. We DIYers often forget the time it takes to finally dial in the sound, or some of us never really bother too. Now why speakers using a single fullrange driver of well-known source should cost so much is a bit beyond me.

Enjoy,
Deon
Oh goodie, another chance to tell war stories about the hifi biz!

Things may have changed now, but the salary at Audionics was laughable. It literally went up three times when I took the unglamorous job of tech writer at Tektronix in 1979. (Little-known fact: tech writing can pay nearly as well as an EE job, and you don't need an EE degree. But you do have to write well, and translate scribbled engineering notes to human-understandable instructions. And don't get me started about "self-commenting" code!)

The deployment of personnel in most hifi companies is laughable as well. Engineering teams are almost unknown; there's usually only one actual designer or engineer, and he is always kept well out of sight, to maintain the happy illusion that the CEO is the latest incarnation of Einstein, who for some inexplicable reason is now working in hifi. The ratio of marketers (shills) to engineers is 3:1 or worse.

The dirty little secret of audio is that designers get tired of getting treated like dirt, and move to another manufacturer after a few years of abuse. This is the reason the "house sound" of XYZ manufacturer changes over time - the real people who made ABC famous product have moved on! Pretty similar to the reason the quality of food at a local restaurant changes over time - the chefs who made the reputation of the restaurant move on, taking their quality food with them.

The 6-month design-time figure is still pretty typical, although there is a new breed of designers who are proud of never auditioning what they design. A design-by-the-numbers, of course, can be knocked out in a matter of hours, although the sound quality will be less predictable. If there's no "house sound" for a given manufacturer, that's probably what's happening.

A more dire example are speaker manufacturers who have the Prez select the drivers and design the cabinet (so it looks pretty, of course), and then hire an outside consultant to design the crossover (which controls how the speaker will sound). When I'm at hifi shows, it usually takes a little digging to find out if the "official" designer actually did the real work, or just designed the cabinet and picked some drivers they thought might sound good.

Although it's traditional in the hifi biz to have a 1:5, or even 1:10 ratio between (raw parts + cabinet cost + assembly labor) to retail price, this doesn't apply to the $20,000-and-up market. I've thought about the Ariels, and they probably couldn't be profitably retailed for less than $10,000/pair (remember, the dealer gets 40%, and the regional rep another 5% or so). The Karna amps would certainly have to sell for $50,000, or more; they have a lot of expensive parts in them, and a lot of construction labor.

What puzzles me are high-priced transistor amps, preamps, and DACs and over-the-top speakers with the usual-suspect drivers and pretty ordinary crossovers. The most expensive parts of transistor amps are (1) the chassis + heatsinks (2) transformers (3) output transistors (4) power-supply caps. The circuit board and all the little parts on it are not that expensive, a couple hundred bucks at most. Same story for preamps and DACs; even the most pricey ESS Sabre 9018 converter is about $40 (in small quantities), and that has 8 channels of output! Discrete transistors and opamps are only a few bucks each (in quantities of 100 or more).

In terms of actual price of what-goes-in, I don't see why any transistor amp, preamp, or DAC goes for more than $5000 to $10,000, aside from the silly chassis with fancy NC-milled shapes. Anything above-and-beyond that is amortizing development cost, silly chassis (that has no effect on sound quality), and marketing costs (exhibiting at the CES can run $30,000, while the RMAF is around $3,000 to $5,000).

Tube amps and high-efficiency speakers are another matter. Pro drivers really do cost more, and the transformers that are mostly inevitable with tube gear are inherently labor-intensive to wind and assemble. Vacuum tubes have never been cheap; adjust for inflation, and tubes cost a lot in the 1930's, 1950's, and now. They've always been assembled with hand labor, and need to be individually tested and QC'ed, with a fairly high reject rate. There have proposals over the years to build them with robots (which would improve QC), but the capital expense is hard to justify with the small production quantities.

Last edited by Lynn Olson; 5th February 2013 at 08:26 AM.
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Old 5th February 2013, 08:35 AM   #78
lolo is offline lolo  France
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Amen!
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Old 5th February 2013, 09:21 AM   #79
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Driving a Trabby is cool !!!
Not sure about that but then the closest I ever got to Trabbies is making a few of them fly above the stage for a U2 tour back in '92.
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Old 5th February 2013, 03:04 PM   #80
DeonC is offline DeonC  South Africa
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Oh goodie, another chance to tell war stories about the hifi biz!
Thanks, Lynn. That opening line alone already had me in stitches.

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