Quote:
Originally Posted by akfaulkner
+1
Personally I suspect the margins are huge for a lot of high end equipment bc of the low numbers of customers...
It's ripe for someone to come in and turn things on their head by making something just as good and upgradable for more than half the price & marketed to a broader customer base.
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I think you are 100% correct. I think Mcintosh and B&W are doing a pretty good job pushing into a broader customer base mainly through selling at Magnolia. B&W is also smart to make partnerships with high end car companies to get their name out.
Samsung is making pretty big moves as well with their acquisition of Harman, and just yesterday it was announced that they acquired Arcam.
Despite healthy margins, there are too many manufacturers of Hifi equipment out there to remain profitable. The ones that are small operations with minimal overhead and owned by enthusiasts who are passionate about the hobby will stay open, as will those who are at the super high end... but the ones that are corporations, targeting the mid-high end (many of which are owned by private equity firms) have to make profits otherwise the owners will make drastic changes in the business model. There are some juggernauts in the space who will no doubt survive (ie. Mcintosh, B&W, Naim, Focal, Harman etc.) but the smaller firms will be bought up and within 10 years we will have a few small conglomerates controlling the industry. The same consolidation can be seen in high end fashion houses which occurred in the late 90s/early 00s.