B&O Profits warning issued today

B&O Issued a profits warning today, read more HERE

I am not surpriced after all the problems they had with the Avant.

It sure has cost a lot of manpower/money.

Let us hope, that they recovered - and that the future results will be better.

The Avant seems to be a good selling product!

MM

12.5% share price drop today. Back where they were more than a year ago.

Still can't find the right position in the AV market. The Play products have too much competition.

Not sure about the Avant in the long term. The company had been there before with televisions with moving speakers. The art-on-the-wall or easel BV10 and BV11 design with upgraded panels should have given them the results they need on the TV side had they tweaked the price without dropping the long standng features like the accessories panel. The motorised stands, wall brackets and hinges should also be pushed for their unique wow factor.

Graham

Personally I'm not too worried. Some blood needs to be lost before the company gets stronger. It could have been worse...  B&O has lumped a lot of cash into new products, the problems therein, launches and a shake up.  

Play has a future, it just needs time and some tweaking. However, if you don't have any spare cash that becomes a problem!!

I don't get any bad vibes though.  I'm sure Tue and his gang have plans. 

Lee

 

My point of view

Like I wrote many month ago, I think in future, Bang & Olufsen will be only a manufacturer of prestigious loudspeakers.

They will stop the TV market.

BeoPlay is in a difficult level. Prices are too high for products "Made in China". They have either many products returns. The concurrence is very strong.

Bang & Olufsen continue to progress strongly in the audio automobile business. That is a very good point.

TVs are almost a commodity now as are many domestic esentials; not expected to last both functionally or in size/spec. Speakers alone now use apple products to drive them . What's left for B&O to get their markups ?  The ability to have neat installations ....

The only area the company are strong in is loudspeaker technology.

They need to put all their efforts into that area but the majority of the shops should close. 15-20 company owned shops in the UK should suffice for such a niche area.

The share price is on the floor. No other company has survived such a crash in share price to be valued just 5% of where it was 7 years ago.

Tue’s plan is in tatters. Hard to see how he can survive the January quarterly update.

Year after year production seems to be the problem. A high level production manager/director is the only answer.

It's an incredibly hard one this! How could they survive if they just make loudspeakers? Having had a life working in radio & broadcast, I haven't come across many who could afford to spend that amount of money on loudspeakers - especially now with the iPhone & smartphone generation. I finally saw the BL18 speakers in London last week and yes, they are the most beautiful looking speakers that i've ever seen. Just beautiful. But again, i'd need to be a millionaire to afford them. I can't think of many professionals that are starting families who would be able to afford these. Maybe B&O's only future is in the pink pound!

Tue seems to be working really really hard and yet everything seems to go under. But, I certainly don't think that's Tues fault - although I do blame him for destroying B&O's heritage by having their expensive kit made in China. To me, that killed it. B&O is Made in Denmark HENCE the HUGE prices! But, I bought an A8 (£589) which I love the look of. But I feel for Tue and I reckon, that this most be the hardest job that he's ever had in his life. Certainly the £5bilion profit that he forecast with 5 years was a little inaccurate or maybe arrogant.

I also agree with Vikinger with regards to BV10/BV11 just incredible designs - although David Lewis design shouldn't really be congratulated on this - it's a Marc Rothko painting design. Avant not a fan - cheap looking for me.

I hope the Play range continues to evolve. Maybe we'll see a BL6000 update like we did in the BL18 for the 8000. Anyway, always a real interesting read year after year.

I notice that the beoplay at its launch was very criticized here and finally a lot of b&o lovers have bought at least one (a9. A3, a8, v1..)

Even if the competition is fierce they should continue to invest in this range but again there should be a premium advantage to buy a pure bang olufsen product.

An a8 with better features than a beosound 8 and a S8 with the same number of amp than a beolab 14, that´s only commercial suicide.

I am convinced that the v1 range could be a huge success if the design was more conventional.

The brand absolutey needs to be more visible, the beoplay range is really good for that (originality, different outlets, lower prices ...).

I agree with Lee.  Tue has done a great job considering the challenge. Everyone seems to forget how deep the recession was.  Many countries are still having monetary problems.  With upward trend of many Western and Asian economies, things should improve at Bang and Olufsen.  The significant drop in oil prices will certainly help in the EU and North America.

I think B&O may have a great future.

linder:

I agree with Lee.  Tue has done a great job considering the challenge. Everyone seems to forget how deep the recession was.  Many countries are still having monetary problems.  With upward trend of many Western and Asian economies, things should improve at Bang and Olufsen.  The significant drop in oil prices will certainly help in the EU and North America.

I think B&O may have a great future.

+1

With low oil prices I'm betting Russian B&O sales will go down though. Hopefully a blip up in the economy will help offset what B&O spent on the Avant and such. It's a tough time to be in the electronics market, giants like Sony, Samsung, and Panasonic are struggling with product lineups and sales too.

I am also not worried. Every road has ups and downs.

If it was delays in bringing products to market against what was planned that's understandable

The play brand makes sense

And making in China is ok after all and producing in China isn't always cheaper. After all what happens when China's middle class is bigger and then their wages are as much as England or Germany or Australia ? Then the "world" will move production to Bangladesh or Brazil or wherever. The play brand is significantly cheaper than the B&O brand I believe but it's NOT VISIBLE anywhere and even if it is there is no marketing message.

Now that I have a bit more B&O I'm appreciating although it's not the cheapest it's by far not the most expensive but B&O aren't capitalising on this.

What other products besides the moment are there delays in that we're in their forecast.

The idea of the BV11 with updated specs like the avant at the avant prove point or slightly beneath would have also been a wise move. Or a BV 11 with a motor stand and speaker would have also been successful.

But it's only early days. The avant is just gaining it's legs.

Giddy up.

BeoBoy68:

 Bang & Olufsen will be only a manufacturer of prestigious loudspeakers.

Why would someone want to buy a B&O speaker without having a BV to connect it to?

 

Sure you can use the BL's with other tv's, but it is probably too fuzzy for most people.

And would they sell enough speakers to justify the production of them?

And as speakers for an audiosystem?

The time for the B&O audiosystems, as we knew them, is over.

I doubt that enough audiophile stereo purists would consider buying a BeoLab speaker - even if they are used to spend quite a lot on their equipment.

The BeoLab speakers were (and still are) made for the B&O ecosystem - equally used for sound from video and for music and benefitting from the audioengine built in to the BV's.

Using them just as an 'alternative' to the other active speakers would not justify the expertice (and manpower) needed to built them.

And how should they be positioned in the market today?

I am convinced, that B&O as a 'speakers manufacturer only' would not survive for long.

 

What makes the BeoLab's outstanding is their roles in a BV system.

 

MM

 

linder:

I agree with Lee.  Tue has done a great job considering the challenge. Everyone seems to forget how deep the recession was.  Many countries are still having monetary problems.  With upward trend of many Western and Asian economies, things should improve at Bang and Olufsen.  The significant drop in oil prices will certainly help in the EU and North America.

I think B&O may have a great future.

I am with you on that!

As Michael wrote above: 'Giddy up'.

Get back on the horses guys!

MM

B&O are missing the boat in speakers for non-B&O tvs. Everyone I know who has a normal TV always complains about the sound. If B&O had a few speaker bars that were simple to use with other brands, were easy to connect, looked good without being too daring, had visible branding, and were available in any electronics/tv retailer they would sell them by the truckload. 

People want a bit of luxury, they want perceived quality too. But people in general are lazy, and they want their needs satisfied immediately. So having to go to another store and figure out if speakers will work with what they have is too much effort for most. If there was a solution that was immediately available, it would make the decision making process so much easier.

 

B&O really need to redirect their marketing spend. The brand needs to be known and desired, and this needs to be done in a way that appeals to the masses. The H2 could have been this vehicle if it had (for example) a chrome ring around the edge and silver branding. A little bit of 'bling' for those that want to show off a little. It has the perfect pricepoint, but visually the product is a little demure. I know Beoworlders would hate this idea, but B&O needs a few items that don't appeal to the usual B&O customer. B&O needs a few things that appeal to the masses and gets the name out there, and drives volume sales. Let any retailer sell them, discount them, use them as loss leaders. Let them advertise these few items in catalogues, and let the retailers spend their marketing budget to promote the B&O brand. Consumers like a brand, and they like to associate and align with a brand. Get them in with a few cheaper items, and educate them about the better items. Put a mini catalogue in every item.

It may be horrible to us, but cashflow is king when it comes to business and B&O needs to find this method of cashflow..

I totally agree with Jonathan. B&O Play NEEDS a sound bar which I believe Totally Electric said over one year ago although I think everyone jumped on him for saying that. But look, 2005 BV7 launched what was that ugly thing bolted on??? A SOUND BAR!!! So B&O are experts at this.

You look around and in every city, in every part of Europe at least, you see LG and Samsung TVs - I must  admit that i'm being LG everywhere now. A B&O sound bar with BS8/A8 or even BeoLit12 sound quality for £500 would sell. Make it lovely looking too!

I don't think people are lazy about going to many shops to buy, maybe it's because it stresses them or maybe, they'll buy everything on line (I know I do :).

In the UK even Sainsburys supermarket has B&O PLAY for sale on line so the brand is appearing everywhere ALTHOUGH for some reason EVERY B&O product was missing from Apple Covent Garden, London last week apart from one H6 which was broken on the left hand channel!  Naim, B&W & BEATS were everywhere.

B&O needs to maintain some arrogance and integrity with products and prices and work on the provenience of the stuff. I paid £600 for a Beolit 12 in March which is Chinese and a few months later it was reduced to £430. If had been assembled in Denmark and remained at the same price that'd make me favourable about the brand when I come to spend money next year on  audio for a house remodel.

A B&O soundbar - a nice thought.

But who wants to spend more money on the soundbar, than they have spend for the tv?

A 'blingy' H2 would not save the company.

 

What B&O needs - if they shall maintain the actual activities - is more invested capital, especially for marketing etc.

The portfolio of today is strong, the management is good and the production has been reorganized during the last couple of years.

But the products must be sold to create a better cashflow - that's the main problem for a small company like B&O. They must sell much more, than they do now.

I wonder if (Tue and) Ole Andersen - the chairman of the B&O board - already have a plan?

MM

You have to consider that B&O needs to do a few things that traditional B&O customers wouldn't necessarily like or buy in to. B&O can't survive on sales from Beoworlders. They need to introduce the brand to new markets, particularly the younger mass markets. B&O is a desirable brand, and this is a massive strength. Lee cam attest to this, as B&O is one of the few brands that has a strong secondhand value. 

I gave a couple of EXAMPLES. I'm not an electonics manufacturer, this is B&O's forte.

B&O needs no new products now - they need to sell, what they already have (and have invested in).

They don't need more diversity - the will have to simplify their portfolio even more than already done.

That is why, I wrote 'marketing' - they need more/new costumers.

MM

B&O do what they always have done.

They are 30 years ahead in design, and have got very good new designers that have taken on the herritage well.

When it comes to the price of the products, it is the same as it has always been.

B&O products have through the decades costed not parts of a monthly income for an ordinary worker, but numbers of monthly vages. Nothing has changed.

They sell products that people buy, and some people take bank loans to buy because they want the items.

B&O products have value  and as second hand products they sell with good price.

Compared to china ***, that breaks after 3-4 years and end up in the dump, price, value in terms cannot even be compared to todays relative.

I have no doubt B&O will surivie.

B&O is a brave company that do exactly what more european companies should do, which is to NOT try to do what china do, but do something completly different..

B&O is one of Europes prides 

Another reason which is truly unforgivable for the prestigious brand is that they need to address issues with faults on products. For instance software and Airplay problems on the BeoLit12. A quick look through Amazon or Apple with readers comments totally destroys B&O's names before one even considers it. A wanted a BeoLit12 very much BUT was put off from the airplay issues on every website. Now that is terrible for sales isn't it!

Luckily the A8 which I have seems to be stable.

MM, a lot of people that I'm speaking to currently seem happy to pay £1000 for a TV so maybe they would consider a £500 B&O sound bar as sound bars really are pushed on UK website like John Lewis. If you click on a TV underneath it says 'Now add this' pointing at a matching sound bar.

Soundbars? Maybe a few years ago? It's a good idea but isn't this what the S8 is trying to achieve ?

Discreet speakers and a big subwoofer.

I suppose the difference is sound bars connect via hdmi and have other inputs but I think even if you had a soundbar wouldn't you in the end after having one still yearn for stereo separation in this application ?

But yes B&O need to appeal to a new markets. Beoworld fan boys will follow

We can all give our opinions on products and marketing and I do love and learn a lot from my fellow Beoworlders in this respect.

However, the financial position is very clear. Deeper in debt than ever and a crashing share pice.

On this evidence it cannot be said that the MD is doing a good job.

As much as I really want to buy a Beovision one day, I have difficulties justifying 8.000 EUR difference between soon-to-be-announced Avant 75" and Sony 75" S9005B.

Yes, I know, B&O has a built-in sound and integration features which are worth extra... ...but 8.000 EUR? You can buy a small car for a difference. And we talk top of the line Sony here and not some random brand.

Some people might say: "Well, then buy Sony and get the h..l out of this forum!", but I think that is exactly the problem B&O is facing in today's market and with current business strategy.

On one side, production has been moved to China to support economy-of-scale competitiveness - on the other pricing is still kept at a super premium level. Yes, I can get the 14.000 EUR price if it was made and assembled in Danemark, but... it wasn't. (Or am I wrong?)

Plus, let's keep in mind that one fundamental task of the TV set is to have a superior picture. Now what kind of superior PQ does B&O give for this 8K EUR extra?

Loudpeakers are a different story, and here I believe B&O is and will continue to be more competitive and their value proposition is more clear: fully integrated and optimized speakers+amplifier in a spectacular designed product made from high end materials. To me it looks like a valid investment and I plan to buy Beolab 18s.

On the Beovision side, I would see as a smart move from B&O if they broaden the portofolio in Beoplay TV segment and keep producing beautiful Beovision TVs under B&O for customers who don't need to compromise on financials. Either way, I wish B&O all the best and hope for a soon recovery.

Correction of my previous statement: 5.500 EUR difference, price in the above post was for Sony's 65" set.

AnalogPlanet:

On one side, production has been moved to China to support economy-of-scale competitiveness - on the other pricing is still kept at a super premium level. Yes, I can get the 14.000 EUR price if it was made and assembled in Danemark, but... it wasn't. (Or am I wrong?)

You are wrong!

The Avant - as well as the majority of the Bang & Olufsen products - are made in Europe. In the company-owned factories in the Czech Republic and in Struer (Denmark).

The Remote One - as an example - is made partly in Denmark and partly in Austria.

Yes, most of the products in the BeoPlay range are made/assempled in China - but they are developped and designed in Denmark.

MM

Thanks MM!

Okay, that compensates for 1.500 EUR price difference (for me personally). Another 3.000 EUR for built-in sound and home-integration platform. Which brings us to only 1.000 EUR "brand premium" - and that makes sense and is justified.

Well, then, it looks like B&O needs to work harder to market this equation to customers.

p.s. I would still hope for additional models in Beoplay TV.