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Death Spiral?

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Jeff
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Jeff Posted: Fri, May 26 2017 12:07 AM

Well, I just heard that the B&O store in Atlanta, GA is no more, the only B&O store in my state. As of right now, according to the B&O web site, there are exactly 5 stores in the USA. Five, for a population of about 350 million. The Atlanta store was in a very high end area of town, in a high end mall that has no shortage of successful, expensive stores. The center display of cars was not Chevy or Ford, but Aston Martin and Bentley, and still the store went away.

This is getting to look suspiciously like a death spiral. No Netflix app on the 4K sets, no Spotify on the TVs now, etc. Not good. I wonder if Harman will try and prop B&O up just so that their acquisition of B&O as a car audio brand will still have worth. They did it with Infinity after a few car companies dropped Infinity as they were basically non-existent as a home audio brand, which forced Harman to keep Infinity alive when it should by all rights have been shut down.

Sad times for the faithful I think.

Jeff

I'm afraid I'm recovering from the BeoVirus. Sad

beotex
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beotex replied on Fri, May 26 2017 12:32 AM
That's not good about Atlanta, but I know there is one shop in Houston, one in Austin, and a new shop in Dallas being fitted later this year. A couple of years ago there was nothing in Texas, so I was seeing positive signs...
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Jeff:
according to the B&O web site, there are exactly 5 stores in the USA

Impossible - something like 22.   I just used their store locator and found five just in CA.

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linder replied on Fri, May 26 2017 5:41 AM

Jeff:

Well, I just heard that the B&O store in Atlanta, GA is no more, the only B&O store in my state. As of right now, according to the B&O web site, there are exactly 5 stores in the USA. Five, for a population of about 350 million. The Atlanta store was in a very high end area of town, in a high end mall that has no shortage of successful, expensive stores. The center display of cars was not Chevy or Ford, but Aston Martin and Bentley, and still the store went away.

This is getting to look suspiciously like a death spiral. No Netflix app on the 4K sets, no Spotify on the TVs now, etc. Not good. I wonder if Harman will try and prop B&O up just so that their acquisition of B&O as a car audio brand will still have worth. They did it with Infinity after a few car companies dropped Infinity as they were basically non-existent as a home audio brand, which forced Harman to keep Infinity alive when it should by all rights have been shut down.

Sad times for the faithful I think.

FYI. Samsung now owns Harman.  https://news.samsung.com/global/samsung-electronics-completes-acquisition-of-harman

B&O Automotive may disappear.  Mark Levinson automotive also owned by Samsung Harman is a stronger brand for premium cars.

I don't know if B&O is in a death spiral but it is definitely weaker in North America. 

Jeff
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Jeff replied on Fri, May 26 2017 11:30 AM

MediaBobNY:

Jeff:
according to the B&O web site, there are exactly 5 stores in the USA

Impossible - something like 22.   I just used their store locator and found five just in CA.

I just used it prior to posting that and it showed five. Not sure why you and I get different results.

OK, I just went through the list in a different way, I got 17 total, as some of the ones listed as "US" were in Canada or Mexico. Not as dire as 5 but not a healthy number either.

 

Jeff

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Hungedu
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Hungedu replied on Fri, May 26 2017 3:46 PM

I think this is part of a greater trend of brick & mortar stores closing only to have a better online sales presence. This has been clearly observed with Macy's, JC Penny and many others. Rent has become so ungodly expensive, and if people are only coming into stores to kick tires and say, "I'll be back when I win the lottery", no wonder most, if not all of the privately owned B&O stores are closing.

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Jeff replied on Fri, May 26 2017 4:38 PM

Unfortunately, certain things don't sell well without a storefront and being catered to by knowledgeable sales representatives and installers. LIke B&O, the complexity of integrating a system, especially one with new and old components, is not the thing you just buy online. I think B&O can get away with that with the Play line, the main systems, not so much. Yeah, I'd jump at the chance to buy a pair of 88k dollar speakers without hearing them.

Certainly, for certain items, online makes sense. I practically keep Amazon in business, but I don't buy certain kinds of things there, and I also live in the middle of nowhere, not much brick and mortar presence.

Jeff

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Tucker replied on Fri, May 26 2017 5:25 PM

I was very sad to see the Atlanta store close. I must have shown up there right before it happened.  Very dissapoonting.  

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Jeff replied on Fri, May 26 2017 6:02 PM

Tucker:

I was very sad to see the Atlanta store close. I must have shown up there right before it happened.  Very dissapoonting.  

I first met Dixon, the owner, about 5 years ago when I went to Atlanta to check out the store and the mall and such. He ran a good shop, very helpful and informative, good guy, took time to chat and explain/demo things. A good guy. I know another ex dealer who also was a really good guy, it's sad they are no longer dealers.

 

Jeff

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mjmedlo replied on Sat, May 27 2017 2:34 PM
I think you'll find that the pro partner model is the future.

Brock and mortar will fade away.

The brand is alive and well... pro partner distribution and sale allows the product to be sold and distributed without the outrageous overhead of high end boutiques.
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Sal replied on Sat, May 27 2017 3:31 PM

mjmedlo:
I think you'll find that the pro partner model is the future.

 

Brock and mortar will fade away.

 

The brand is alive and well... pro partner distribution and sale allows the product to be sold and distributed without the outrageous overhead of high end boutiques.

I'm curious about how the pro partner model works. If one wanted to see / demo a B&O product, what would an individual have to do if there were no brick and mortar stores? Where is the contact info for pro partners, and is the model geared for larger purchases, or can they also work for the individual who only wants to buy a single pair of BL17s as his first purchase for example?

 

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Jeff replied on Sat, May 27 2017 3:40 PM

I have the same questions Sal!

B&O has always seemed to have a lot less success and penetration of the US market as opposed to Europe and other locales, but at less than one dealer per state, and huge swaths of the country having no dealers, it makes you wonder how seriously they take the US market.

Time will tell I guess.

Jeff

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9 LEE replied on Sat, May 27 2017 4:14 PM

I'd never buy a Music System, or Audio System, without listening to it first. So, that would only mean you have to go somewhere if you're going to consider buying B&O...

Or, am I a dinosaur?  Does the younger generation just buy a magazine, or go online, look for reviews, and buy blind based on those?  

If that's the model, then I'm sure it works fine up to a certain price point - then you need to see what you're buying.....

Lee

PS : In addition to that - a lack of dealers means a lack of product out there. A lack of product means a lack of real brand awareness. A lack of real brand awareness means a lack of sales. A lack of sales means dealers will close. Oh.. hey.. hang on... that's a spiral!

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Jeff replied on Sat, May 27 2017 5:39 PM

Not to worry Lee, I'm sure B&O's huge advertising presence in hifi mags and other places will turn the tide and make sure everyone is aware of them. Whistle

Jeff

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mjmedlo replied on Sat, May 27 2017 6:09 PM
Sal:

I'm curious about how the pro partner model works. If one wanted to see / demo a B&O product, what would an individual have to do if there were no brick and mortar stores?

Simple: ask a pro partner for a demo.. they show up at your house with the item...

Where is the contact info for pro partners, and is the model geared for larger purchases, or can they also work for the individual who only wants to buy a single pair of BL17s as his first purchase for example?

This is a problem.. they have pro partners listed under the beo integration site.

I have a client who has bought one pair of headphones.. and one with a whole home sale..

Some of the partners have storefronts too.

I've chosen not too.

The pro partners aren't tied down to the brick and mortar restrictions..

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mjmedlo replied on Sat, May 27 2017 6:11 PM
Legitimate concerns... but honestly If you contact a partner they'll usually come to you.

Then you hear a system in your own home ..

A much better scenario for high end product IMO.
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9 LEE replied on Sat, May 27 2017 8:19 PM

mjmedlo:
Legitimate concerns... but honestly If you contact a partner they'll usually come to you..

Which puts pressure on you to buy, which most of us don't want when spending a lot of money...

For a high value purchase you want to browse, have a demo, possibly go home, mull it over, then (hopefully) take the plunge and have a deal. Buying a B&O system isn't like going to the supermarket - it should be a "Premium Experience" - because, after all, it's a "Premium Product".

What I wouldn't want, personally, is someone carting thousands of pounds worth of high-end kit to my home - spending an hour or two setting it up and going through the motions, then staring at me, smiling, with those non-threatening  "well, the time and effort I've just put into this better get me a sale" eyes.

High end = Face to Face, in a showroom environment. Bricks and Mortar premises. Somewhere you know you can walk into for help, advice and support. End of story.

Rant over. We need more stores.

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Mark-N replied on Sat, May 27 2017 8:33 PM

I have a high-end audio store near me, Gramophone.  I was looking at their web site and went to "Our Brands" and saw Bang and Olufsen!  I thought that this was great as long as it wasn't just the Play brand.  I stopped by today to pick up a couple of cables and I asked about B&O.  The salesman didn't know much about it but knew they had been in discussions for a long time, going one way or the other.  He thought it might be just some of the personal audio products.  I thought it would be great if B&O could get into an environment like that, well at least for me!

 

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mjmedlo replied on Sat, May 27 2017 8:43 PM
Mark-N:

I have a high-end audio store near me, Gramophone. I was looking at their web site and went to "Our Brands" and saw Bang and Olufsen! I thought that this was great as long as it wasn't just the Play brand. I stopped by today to pick up a couple of cables and I asked about B&O. The salesman didn't know much about it but knew they had been in discussions for a long time, going one way or the other. He thought it might be just some of the personal audio products. I thought it would be great if B&O could get into an environment like that, well at least for me!

Exactly ... pro partner defined.

Let's there be other brands and keeps the corporate control down..

The corporate control in this world is expensive. Store setups, stock, etc.

Hopefully it all shakes out.
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But why won't people go into these stores in the first place. Out of 400 pilots, Chris Harrison and I were regarded as the only Beonuts in the company. The subject even came up when I had to describe why I wanted to be a Captain Erm..

Now he's knobbed off to Qatar, I'm alone to fly the flag.

My local mall is full of shops selling £6-10,000 watches, so it can't be price. There's very much a view that the shops are a closed market for just a selected elite. All the time I hear "oh god I couldn't go in there could I"? The Bose shop no problem selling S8 priced surround sound systems, so why can't B&O?

I've been saying it for years, B&O needs to change its perception to both the public and some audiophiles, and retail some killer products again. I don't have a Beosound, as I don't think there's one currently good enough.

The Moment, the non HDR Beovision Horizon and 14 are hopefully just blips.

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Simonbeo replied on Sat, May 27 2017 10:30 PM

Are pilots the target audience for B&O then? It's different to a watch. There's no set-up required in your home for a watch and it can be taken to a place where you can show people you've spent considerably more than them on your symbol of wealth. A car is the same, but audio , other than headphones is home based. 

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moxxey replied on Sat, May 27 2017 10:30 PM

Chris Townsend:

My local mall is full of shops selling £6-10,000 watches, so it can't be price. 

Chris, just because the stores have the watches, it doesn't mean they sell (in big numbers). Also, don't forget, there's a rather huge difference between buying the right watch and a B&O TV. Buy a Patek or the right Rolex and, generally, speaking, they either retain value or go up in value - this means that you can buy a watch, wear it and it's an investment.

A B&O TV isn't an "investment" so it's not the same comparison at all. For example, my fairly modern £10,000+ BV12-65 is worth peanuts now. I'd be lucky to get £1K for it. Thus I can't really afford to trade-up as when the OLED B&O 65" reaches the market later this year. At £12K I'd have to find a £11K just to buy a slightly better picture than the same TV I have on the wall. And, frankly, I don't obsess over picture quality enough to warrant finding £11K. This means, as an existing B&O customer, a customer who has been upgrading B&O TVs since 2003, I'm now out priced/justified out of the B&O TV upgrade loop - worrying for my local store.

The point is, you can't compare watches with TVs.

The simple answer with B&O is that you can now get a top quality picture on a low price LG. You can now listen to decent audio on a £500 portable speaker (and, frankly, most people aren't audiophiles anyhow). There's no *need* for the average bloke on the street to walk in to a B&O store and look at £6K TVs or £5K speakers, sadly. It's a rare breed in 2017.

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Simonbeo:

Are pilots the target audience for B&O then? It's different to a watch. There's no set-up required in your home for a watch and it can be taken to a place where you can show people you've spent considerably more than them on your symbol of wealth. A car is the same, but audio , other than headphones is home based.

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Folks that spend all day wearing £900 headsets, who love technology and earn a minimum of £70k

Yes I do actually. All have houses with wall to wall Bose etc, but virtually none with B&O.

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Chris Townsend
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moxxey:

Chris, just because the stores have the watches, it doesn't mean they sell (in big numbers). Also, don't forget, there's a rather huge difference between buying the right watch and a B&O TV. Buy a Patek or the right Rolex and, generally, speaking, they either retain value or go up in value - this means that you can buy a watch, wear it and it's an investment.

A B&O TV isn't an "investment" so it's not the same comparison at all. For example, my fairly modern £10,000+ BV12-65 is worth peanuts now. I'd be lucky to get £1K for it. Thus I can't really afford to trade-up as when the OLED B&O 65" reaches the market later this year. At £12K I'd have to find a £11K just to buy a slightly better picture than the same TV I have on the wall. And, frankly, I don't obsess over picture quality enough to warrant finding £11K. This means, as an existing B&O customer, a customer who has been upgrading B&O TVs since 2003, I'm now out priced/justified out of the B&O TV upgrade loop - worrying for my local store.

The point is, you can't compare watches with TVs.

The simple answer with B&O is that you can now get a top quality picture on a low price LG. You can now listen to decent audio on a £500 portable speaker (and, frankly, most people aren't audiophiles anyhow). There's no *need* for the average bloke on the street to walk in to a B&O store and look at £6K TVs or £5K speakers, sadly. It's a rare breed in 2017.

I remember a time when my mum leased a B&O Tv, when they were about 2 1/2 times a good Sony. A premium price, but still affordable. We are about to move south and our 7-55 won't really suit our new house, and at best I reckon we'd get £2,500 for it. That's half a non HDR Horizon 48!

Now we've got the 5s I don't really need a Tv with a whopping sound system, just a good centre channel(like your 12-65) but £5,000 for a Horizon! I was in Fenwicks and they're retailing 55 inch OLED HDR TVs for under £1,500!

Anyway, I've got packing to doYes - thumbs up

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There is nothing wrong with my B&O TV set.

Do not attempt to adjust the picture.

It has been carefully and competently designed to deliver the best B&O experience of its time.

And B&O is, if nothing else, timeless.
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ed7 replied on Sun, May 28 2017 12:37 AM

Bang olufsen is a passion and hobby too!Big Smile,but imho should stick to making speakers only ,for now!

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ed7 replied on Sun, May 28 2017 12:42 AM

Headphone is fine tooWhistle

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JoeJet replied on Sun, May 28 2017 1:23 AM

 

Well I live in the Cayman Islands and there is a new store opening here soon, I don't know if it's a full B&O shop or Pro Partner but I was speaking to them the other day and they are going to have all current products on display including the 90's  can't wait to hear them. They also said they will have the new sound shape when available. The shop will be B&O by Audiophile (a local automation company) so I guess a pro partner. They have an avant 55 and 18's, 19 and 17's in their showroom at the moment, should be interesting hopefully they can fix things there as my 9000 is playing up.

 

 

 

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I am aware that there has been and will people who afford anything and everything but I'm not one of them. That will remain a constant factor and hopefully a constant part of B&O's profits every year but I don't fall into that category. For me with a middling income, a B&O purchase is something requiring a few months of saving and even longer deliberation. The death spiral for me is that their products are pulling away from my financial reach. If I go back 20 years, a top model B&O TV, top audio system or top speakers were 3-4 times something from Sony, Denon, Richersounds... but now top B&O is 8-10 times the price of these competitors. I believe B&O are losing middle income customers as the years march on and have nearly lost me. I won't even talk about all the software issues that 3 years later are still insolvable. Their saving grace from death spiral is a recent focus on Beoplay which is bringing in more income.

.

 

 

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Past: BL1, BL2, BL8000, BS9000, BL5, BC2, BS5, BV5, BV4-50, Beosystem 3, BL3, DVD1, Beoremote 4, Moment.

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moxxey replied on Sun, May 28 2017 8:24 AM

Chris Townsend:
Now we've got the 5s I don't really need a Tv with a whopping sound system, just a good centre channel(like your 12-65) but £5,000 for a Horizon! I was in Fenwicks and they're retailing 55 inch OLED HDR TVs for under £1,500!

Yes, it's a tough call justifying an "upgrade" these days. I used to move up every two years as a) my dealer nearly always gave me a great price for my 2-year-old B&O and b) the difference between trade-in and RRP was often reasonably minimal. Now, I'd have to find 80-90% of the cost for a relatively minor refresh. ie. is there really much of an improvement between a BV14-55 and BV11-55?

Also, don't forget the world is moving increasingly to streaming and digital downloads. Do you really need BL20s sat next to your TV to handle the audio presented through Netflix or your Apple TV? I don't think so.

It's all well and good saying B&O should specialise in speakers, but how many 20-somethings have the finances to justify BL18s or 20s? And how do you convince these next generation buyers that they need a huge pair of BL20s to listen to their digital audio in their tiny sitting rooms (as younger people can't afford big expensive property)?

What I'm saying is, B&O stores have the changing world stacked against them. Whenever I go in to a B&O store and see another customer (which is a extremely rare sight), those customers are nearly always 50-somethings. It's rare to ever see anyone under 35 in a B&O store and you need the next generation consumer to power your future.

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None of the current range would technically temp me away from my 7-55, or your 12-65. 7-5 year old TVs which is ancient in terms of progress.

I'd like to see the Horizon at 55inch with an OLED panel, likewise the 14 too.

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Sandyb replied on Sun, May 28 2017 11:10 AM

My best guess is that B&O will continue to exist, so i don't worry too much about support for products, but part of the journey has and will continue to be becoming ever more premium / expensive......especially when there is the cheaper Play brand, the upmarket brand will become out of reach for some older B&O customers......the product fidelity issue is clear i.e. that audio and video specs are one thing, but software functionality has become paramount, where is secondary before, and here B&O need to up their game.........whether they can is a big question.....they seem to be aware, and changes seem to have happened, but that should translate into stuff that works when released and rapid upgrades to bring full features......slow updates are just as frustrating as stuff that malfunctions....the X app experience is encouraging in some senses, as we see some greater engagement, but i'm still not sure a (what looks like) 6 month process to get a new app out with full functions is a great outcome.......

when it comes to the newer TVs, these software mis-steps are one thing, but i think in the end the more unforgivable aspect is the choice of panel....it simply can't handle dark scenes well at all, and the motion handling is bad.......i'm changing mine to an original Avant, which i hope on one of these 2 aspects at least is better.......my parents 1000 GBP Sony (4 years old) handled the same dark scene much better than my BV14, where it was unwatchable......in other respects their Sony is clearly not as strong picture wise, so its not a universal criticism, as in some cases the BV14 can be excellent, but if it can't handle dark scenes in some films / dramas, then its good points become a bit irrelevant........

anyway, the LG B&O's should be strong products, as they will be using top notch panels, so there should be a more compelling upgrade option soon enough........

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Sandyb:

....but part of the journey has and will continue to be becoming ever more premium / expensive......especially when there is the cheaper Play brand, the upmarket brand will become out of reach for some older B&O customers......

I am not sure, that you are right on this.

Buying B&O has always been expensive and premium.

Just think of the prices of the old BeoSystems - compared to this the coming BeoSound Shapes (in the basis configuration) might even be 'cheap'.

As for the prices of the tv's - think of the ridiculous expensive BV 7-55 - uhhh!

However if you don't need or want the specific B&O part of a tv (the soundengine, the speaker system, the NL capacity, one remote, placement options....) and start to compare the prices with what you pay for a 'premium' LG, Sony etc tv, you must - of cource - say that they are expensive.

Developing, designing, making and supporting (the integration part, also with the older B&O stuff) was never cheap and will never result in a cheap tv.

I am sure that the price of the new tv's will be comparable with the price of other premium tv's.......when you consider the costs for the specific B&O add-ons/features.

MM

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Sandyb replied on Sun, May 28 2017 12:34 PM

yes perhaps i exaggerated, but with a cheaper and more expensive line, they will be keen to maintain a distance / price differentiation between the two.....in the end the underlying concern is that the TVs even if the price makes sense, all things considered, they need to work / be worth the price (which i suspect they will).....and secondly that in a world of streaming etc, its tough to have a distinct and high quality music system.....not impossible by any means, just a tougher proposition......(a new music system type product should appear next year...)

 

 

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Duels replied on Sun, May 28 2017 1:34 PM
Sandyb:

......(a new music system type product should appear next year...)

Is that a hope or do you know this to be the case?
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vikinger replied on Sun, May 28 2017 1:55 PM

The dedicated stores are shrinking in number, and it's not only B&O. Sony and others are doing the same.

Low overheads can only be obtained by supplying the main products to department stores. But department stores are themselves under threat as a concept. Maybe only big sheds like Ikea will survive. 

Order online and have it delivered on a try and return basis via the likes of Amazon?  We should be getting away from the need for specialist installations when more and more products are just plug and play and virtually self-networking. Television weights are also dropping dramatically.

Graham

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Sandyb replied on Sun, May 28 2017 3:24 PM
Not in a position to say anything further,you will have to read between the lines...sorry
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Sandyb replied on Sun, May 28 2017 3:26 PM
Agreed, the dedicated Sony stores for example near me in London aren't exactly full of people either
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Jeff replied on Sun, May 28 2017 3:45 PM

seethroughyou:
I am aware that there has been and will people who afford anything and everything but I'm not one of them. That will remain a constant factor and hopefully a constant part of B&O's profits every year but I don't fall into that category. For me with a middling income, a B&O purchase is something requiring a few months of saving and even longer deliberation. The death spiral for me is that their products are pulling away from my financial reach. If I go back 20 years, a top model B&O TV, top audio system or top speakers were 3-4 times something from Sony, Denon, Richersounds... but now top B&O is 8-10 times the price of these competitors. I believe B&O are losing middle income customers as the years march on and have nearly lost me. I won't even talk about all the software issues that 3 years later are still insolvable. Their saving grace from death spiral is a recent focus on Beoplay which is bringing in more income.

You hit on a good point, prices. I am not wealthy, but I am firmly upper middle class in income, as an engineer I have made good money, still each B&O purchase required a lot of thought and budgeting (let's see, BS9000 or lobster tonight?). B&O naturally, I think, wants to operate in the rarefied upper end, who wouldn't? If you have the choice of selling 100 things at a 10 dollar profit or ten things at a 100 dollar profit, you choose the latter, fewer customers to deal with, etc. More money for less work always is good. But, you can't just say "We're ultra high end" and expect it to take. Especially if you have a recent history of error prone product development. It's hard to make a silk purse out of a sow's ear, and even if you succeed you have to convince the rich you have done so.  Add to that the nature of B&O, very modern artwork that also is AV equipment, you already are at somewhat of a disadvantage as not many people embrace such modernism, narrowing your potential market by making it out of reach price wise from the average artistic, modern design loving person doesn't sound like a good idea to me.

In Play, they have a scattershot approach to design and product. No continuity, take the Beolit 12, 15, 17. How many iterations before they "get it right" and have the right sound, product features, etc.? Not to mention reliability. The Beolit 12 had network issues, so the Beolit 15 got rid of everything but BT. Which seems to work well. I get the impression with Play that they are throwing things against the wall to see what sticks, and are buying a lot of pre-existing modules, network, BT, amps, etc., probably Chinese, that don't always work well.

And finally, in my rant here, I do not like the current design(er)s as much as Jensen, and especially Lewis.Lewis is, to my tastes, a far superior designer, or was I should say sadly.

Jeff

I'm afraid I'm recovering from the BeoVirus. Sad

vikinger
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vikinger replied on Sun, May 28 2017 4:12 PM

Money and taste.

I was persuaded by my better half to take a trip to the large Waitrose supermarket in Chester. On returning to our car I was astonished to find a huge white ugly lump parked next to us with the name Bentley on it. It completely filled the parking bay, was as tall as a truck cab (OK I exaggerate a little) and seemed to have a tiny interior into which you would have to climb.  As we drove out of the car park another similar Bentley overtook us.

On looking up these cars online I discovered that these truly ugly  4x4's are only £140K to £220K depending on engine etc.

Graham

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