From Bloomberg Professional Service: 

By Meera Bhatia
     April 8 (Bloomberg) -- Bang & Olufsen A/S, the Danish stereo
maker that has cut profit forecasts twice this year, reported a
78 percent drop in third-quarter earnings after spending on its
luxury consumer electronics weakened as economies slowed.
     Net income slid to 26.2 million kroner ($5.5 million), or
2.3 kroner per share, in the three months through February, from
118.2 million kroner, or 10.1 kroner, a year earlier, the
Struer, Denmark-based company said today in a statement. Sales
declined 15 percent to 1.04 billion kroner.
     Bang & Olufsen will seek to cut costs and may narrow its
product offer and spend less on marketing, Executive Vice
President Peter Thostrup said on a conference call. Inventory is
being pared and planned store openings may be reduced next year,
according to Thostrup, who took over the temporary running of
the company when Chief Executive Officer Torben Ballegaard
Soerensen was ousted in January.
     ``At the beginning of the fourth quarter, the sales situation
in the main business remains both challenging and difficult to
predict,'' Bang & Olufsen said today. ``All Western European
markets suffered declines in turnover in the third quarter.''
     Spending power is ebbing in Europe and the U.S. as growth
weakens, inflation rises and higher living costs sap incomes,
while sliding stock markets are weighing on consumer confidence.
That's cutting into purchases of higher-priced versions of goods
from clothes to vehicles at companies such as sports-car maker
Porsche SE, whose North American sales slid 24 percent in March.

                        Shares Gain
     Third-quarter sales missed the 1.12 billion-krone average
of four analysts' estimates. The company repeated its March 14
forecasts for annual sales of between 4.25 billion and 4.35
billion kroner and operating profit of 225 million to 275
million kroner.
     Bang & Olufsen rose 6.5 kroner, or 2.1 percent, to 322.5
kroner in Copenhagen. The stock has slid 33 percent in 2008, the
fourth-largest loss in the 21-company Bloomberg Europe Home
Furnishings Index, which has declined 16 percent.
     ``The market seems to be reacting to the fact that the
company is not downgrading forecasts again,'' Kenneth Winther,
an analyst at Capinordic Bank in Hellerup, Denmark, said by
telephone. ``There's very little news in the statement.''
     The electronics maker, whose BeoVision 7 40-inch television
with DVD player costs about $13,250, reduced its forecasts for the
second time last month after demand weakened in the U.S. and Bang
& Olufsen's main European markets. The first cut, in January, was
followed the next day by the ouster of Ballegaard Soerensen.

                          North America
     Third-quarter sales of goods carrying Bang & Olufsen's own
brand slid 14 percent. Revenue dropped 30 percent to 118 million
kroner on that basis in Denmark, fell 15 percent to 121 million
kroner in Germany, and declined 32 percent to 97 million kroner
in the U.K., the company's three biggest markets.
     ``This is not good news,'' Rune Moller, an analyst at Jyske
Bank in Silkeborg, Denmark, with an ``accumulate'' rating on the
stock, said of the lower sales. ``The reason for the drop is a
lack of product launches this and last year and the
macroeconomic development, which you can't change.''
     Branded sales declined 26 percent to 48 million kroner in
North America and were unchanged in local currencies, the company
said. Japanese revenue rose 36 percent to 15 million kroner.
     Sales were unchanged at the unit that installs Bang &
Olufsen audio and video gear in hotels run by chains including
InterContinental, Mandarin Oriental and Four Seasons. They more
than doubled at the automotive unit, which signed up sports-car
maker Aston Martin as a partner in December. The company opened
two new B1 stores carrying only its own goods in the quarter.

                      `Fluctuating Numbers'

     Bang & Olufsen's main markets remain ``challenging and
unpredictable,'' according to Thostrup, who the company said
last week will leave at the end of September. A new CEO will be
named this month, Bang & Olufsen has said.
     The company will ``readdress its cost base'' and is trying
to find a balance between trimming costs and protecting product
development, Thostrup said on the call.
     ``We've seen fluctuating numbers from week to week,'' the

executive said. ``Our European business remains difficult and
challenging to predict.''
     Third-quarter net income missed the 42.8 million-krone
average of four analysts' estimates compiled by Bloomberg.
     Development costs increased by 6 million kroner in the
quarter, while distribution and marketing expenses rose by about
3 million kroner, the company said. The gross margin was 46.4
percent compared with 46.7 percent in the year earlier period.

--Editor: Dan Weeks, Paul Jarvis.

To contact the reporter on this story:
Meera Bhatia in Oslo at +47-22-99-6195 or
mbhatia2@bloomberg.net.

Any predictions on what products will be cut next?

Beosound 3200?

Beosound 6? 

Beosound 4?

Beosound 3?

Beocenter 2 Audio only?

Beo 5?

Beovision 7-32?

Beovision 9?

Beolab 4 PC?

Beolab 6000?

 

 

 

 Someone should set up a vote thread. 

 

I was told the BeoSound 3200 will be among the first to go. Shame, really.

gorissek:

I was told the BeoSound 3200 will be among the first to go. Shame, really.

yes it is a shame b&o never came with a viable alternative,the design of 3200 is antiquated been from early 90s

And much worse to come im afraid

 

The busienssmodel is  not working anymore I regret to say,

Véry disruptive times... I'm not panicking at this time... but they’ll need something/someone to turn the tide. It’s only the first time in a number of years that profit is down… I hope that we can expect some kind of BeoLab 5-style product which can rock the AV world…

 Like I said a couple of weeks ago.. I expected it to be bloody...

Anyway... Products that can go? Although I'm a BIG fan of the BeoSound 9000... I think it's time to put it into retirement... BeoSound 6 can go too...

355f:

And much worse to come im afraid

 

The busienssmodel is  not working anymore I regret to say,

Afraid so... what see in the news is only a very small part of what will happen over the course of the next year or so... Brown and his stooges are lying to us on a daily basis... there is a lot of trouble and instability everywhere... all it will take is one more casulty in the financial markets and it could be a free for all... some very important and critical changes will be made, jobs will go.. question how much damage will B&O sustain and more importantly will B&O be able to stand it... 

Doom and Gloom!

Bang has been prepared for a slowing economy.  The company has weathered a few financial storms in its time.  Cutting some product is a sensible way of reducing cost base and introducing some new products when the timing is right.

 

 

I'm talking strictly from my gut here, but I think that lean times are just what Bang & Olufsen need. While we'd all like to take a red marker to their product portfolio to varying degrees, I think it's their marketing (or lack there of in many cases), their retail concept, and their failure to exploit a brand culture that are most drastically in need of attention. Sure some specs could be more competitive, and they could be more responsive to democratizing forces in AV like digital media, but it's the fact that their retail showrooms seldom convey the magic and history to the uninitiated. I've been to shops in Germany, France, UK, and the US and in almost every instance, the shopkeepers were not up to the task of selling me on the products let alone the tremendous culture that B&O has built over the decades. There have even been instances where I've challenged them to defend the product against lesser brands and they've either stuttered or in some cases even agreed that B&O was not up to the competition! As much as we argue here about the detail, what are newcomers to think with experiences like these! Hopefully B&O will get a bit ruthless in fleshing out their dealer network. And they can discontinue the BeoSound 6 & BeoVision 9 while they've got the axe out.

Rant complete. 

I don't think you will see any discontinuation. I think they will refrain from further venturing out into Phones with Samsung which I think is a good thing. I also doubt that we see more MP3 players.

The BS3200 can go. Without MP3 functionality I would see it's place for the design (my BS2300 still gives me lots of joy after 10 years) but the navgation through the MP3 library just gives that entire thing a funny aftertaste.

BS9000 has it's place. Is anybody asking to stop selling the Barcelona Chair?

 

 

i agree 100%

bno have such an illustrous past with so many technological firsts it seems crazy to me that they don't make more of a deal aboot this

why don't they have a small museum of bno in every shop - showing off what they've achieved over the years , maybe have a smaller version of the massive book they do - give it away

also stop making crappy rebadged phones and mp3 players that do nothing for the brand

Personally,I think that it is a false hope that a knowledge of B & O's history,of technological innovations,would help to sell more of the current products.

I think that the Company really needs to ask itself if it is wise/really able to operate in those areas where technology is rapidly changing,and where,for good or ill,price/performance comparisons will be made,eg mobile telephones,MP3 players,and,dare I say it,flat panel TVs.

One expects to pay a premium for a luxury product,but to my mind it's performance must at least match what is currently available.

I would be extremely annoyed if I purchased a very expensive product that required frequent firmware updates to correct performance shortcomings.

Additionally,to expect potential new customers to commit themselves to a single brand system of very expensive products might be counter productive.

Why not extend B & O's compatability with other manufacturer's products,eg Beosystem 3?

Not to take us too far off topic, but this "incompatibility" myth should be put to bed. Exactly what is not compatible with what? BeoSystem 3s can run other manufacturer's panels, projectors, screens, lighting, drapery, DVD players, set top boxes, game consoles, media servers, etc. Their audio systems can accept any stereo source as auxiliary. Their speakers can be plugged into any system out there from amp to pre-amp, to headphone jack with the right cables. I fail to see what additional compatibility is required?

Yes indeed, difficult times for all companies, B&O is no exception. the bursting financial-airbubble in the states will sadly leave its marks all over the world.but B&O have lived through and servived several bad periods in the past, hopefully they will do the same now.

It's still an issue of less gain and no real loss so far, let's not make things worse than they really are; the modern financial market is so tense en jumpy to [over]react.If we all say to eachother things are going down, one thing will be certain: .............things will go down. self-forfilling prophecy...............imho.

Pound going down, dollar going down; euro going up and makes B&O more expensive outside europe for starters and so on.

3200 will have to go [BS4 replaced it, did'nt it?] as well as 9000 [sadly]

TripEnglish:

Not to take us too far off topic, but this "incompatibility" myth should be put to bed. Exactly what is not compatible with what? BeoSystem 3s can run other manufacturer's panels, projectors, screens, lighting, drapery, DVD players, set top boxes, game consoles, media servers, etc. Their audio systems can accept any stereo source as auxiliary. Their speakers can be plugged into any system out there from amp to pre-amp, to headphone jack with the right cables. I fail to see what additional compatibility is required?

This is a little off topic but still relevant to this thread.

It is really not clear what beosytem 3 will in fact do with third party products and if it actually improves things ( beyond a SS processor)

Just to prove the point time and time again on here we have individuals trying to make third party products work and they are frustrated that either they cant, or more likely that BS3 makes the image worse and not better. This is particularly the case when using an HD projector- the image is just to dark. A lack of proper instruction manual and dealers with little knowledge outside of BnO doesnt help either. There is always a problem connecting anything to it, from flashing with blue ray, darkening of image and worse quality with HD projector, poor third party dvd control- the list goes on. Meanwhile other companies that dont masquerade as a serious AV company offer software and formware upgrades over the internet. The BnO customer ( having already been stuffed on the price) is forced to pay fthe dealer for updates( mainly due to poor development) even pay for updating a remote control- in this day and age this is crazy.

|Fast forward to dealership- well if you want the best for compatability and picture you buy the BV4 for £6K comes the answer and thats why customers have left in droves and i dont believe the latest figures show the worst.

So what third party panels does the BS3 PROPERLY support where the auto contrast works and the image is improved upon as a result.

Answer NONE for plasma excepting the panasonic D9 ( even then there are problems as i discovered)  and none for LCD which represents 75% of sales now

The dealers dont help as they know nothing about third party products- so the impression given by the company, its dealers and staff is that B&O is a one make solution.

As for lighting and drapes and dvd players it wont support that either without expensive interfaces ( other than dvd) and the dvd control is basic at best.

Why would a serious customer bother with all that nonsense? when they can get products that do it in a far easier fashion than this 'integration' I keep hearing about B&O. I have all these BnO products but once one tried to move away to third party it does not integrate

when all you have on some speakers is a powerlink socket this does little to encourage individuals to use third party products with that.

Please explain how i connect my BL9 with 1 powerlink socket to my denon amp so that the speakers switch properly- it seems the noise floor of the denon keeps the speakers awake, so i need a seperate transformer to generate the switching voltage .  And this is 'integration???

Bang and olufsen and the dealers need to get real about the situation in consumer electronics before they all go out of business

The only product that should go are those that are not profitable.  If the 3200 or 9000 continue to sell at a profit, why ax them?  I suppose one could argue that the production, marketing and sales a marginally profitable product may consume resources better spent on more profitable products, but I don't get the impression that there are waiting lists for existing (or near future) products.

Who here has insight into the profitability of different product lines?  I'm sure if somebody does, they're not allowed to talk publicly about it. 

I think we'll get some insight into the profitability of various products when we see which ones disappear...

Stan

Bno always the same things. Kick the BL 8000, the beo4, the bs9000, bs3200 out !!! They have to go forward. 20 years of product cycle are more thn enough. kick them out all.

IMHO, Bl8000, (and maybe BS3200 and BS9000, but I'm not sure about these) are still the most sold items in the B&O portfolio, mainly because of the iconic design, but the sound is still quite correct. Stopping this products is a nonsense : the production is totally rentabilised, and thus the profit margin is among the highest of the portfolio. Maybe they can make bl8000 mkIII with acoustic lens hidden behind the cloth, improved drivers and amplifiers, but only tech addicts like us will notice the improvement, the masses will continue to buy them like before, not much more...

355f,

Though a few of your points are factually inaccurate (I don't say this confrontationally as you'll read here), I have to say that I am overall very sympathetic to this perspective. As a dealer myself, I'd like to think that customers and potential customers are taken better care of than your post suggests, but I'm afraid that I know it isn't true. As I've said in a previous post, I think that the problem lies more in the dealer network than in the products themselves. Having worked with them for nearly 8 years, I personally believe them to be superior in nearly every way to any competing product or concept, but even people who frequent this forum and undoubtedly love the product aren't necessarily getting the best information at the dealer level. It's unfortunate that so many retailers can't engage intelligently beyond our portfolio because we can be a valuable addition as components as well as full solutions.

I'll try to address a few of your issues here: 

While you're correct, some of the active picture corrections work only with the BeoVision panels, I would simply say that there is really no way around this. We don't make Vizios, Pioneers, Samsungs, etc. That sort of adaptive technology is a Bang & Olufsen innovation, and is therefore present in our products and some of the panels on which they're based. Additionally, our panels are expensive not just because of the additional features (anti-glare front glass, aluminum frame, etc.) but because we make a profit. Look at what has just happened to our beloved competitor Pioneer! Maybe they could have learned something from our business model.

And yes, LCDs, Plasmas, etc. all actually do benefit from the source analysis & correction performed by the internal processors. Several of my clients use panels varying from Sony Bravias to Pioneers Elites, and all show a clear benefit. Of course I would also argue your point here that occasionally some tinkering in submenus is necessary to get geometry just perfect and if the salesperson doesn't perform this tinkering, than you're left to wonder what this $8,000 box is doing to your poor Bravia! So this is a great example of where dealers are not living up to the products.

As for the picture on high end projectors, this is easily correctable in either the BeoSystem 3 or the projector itself, though I must admit that this is not a widespread problem. 

Lighting & drapes are quite easily controlled with a few inexpensive relays (less than $300 US). If you're already going to have motorized window treatments and Lutron lighting, than the cost and complication to have the BeoSystem 3 take command is negligible.

As for control of 3rd party products, I would argue that it is exceptionally comprehensive and with the Beo 5, even easier than ever. The Beo 5 will also control non-B&O with time and this will allow even more seamless integration of non-B&O panels and peripherals that may not be directly controlled by a BeoSystem 3.

As for the speakers with Powerlink only, if the noise floor on the Denon is keeping them awake, this sounds like an issue with the Denon and not the BeoLab 9s. Any active loudspeaker has to identify a line sensitivity to turn on and off and so would occur with other brands of active speakers. If the sensitivity was turned down, we'd have complaints that quiet sounds wouldn't wake them up.

I hope that this clears some things up. And again, I apologize. I take these criticisms very personally sometimes because dealers allow many inaccuracies to go unchecked and in turn, many people are missing out on fantastic user experiences. Our products play very nicely with other brands and often enhance the whole experience either from a quality standpoint or from a usability standpoint. Sure they're expensive, but the alternatives at our level of build quality and performance make us look like a bargain! 

Stan, 

While I can't speak for worldwide figures, I can say those products mentioned continue to sell well. As slow as B&O may be to adopt new technologies, they have been fairly agile in dropping less profitable concepts. I liked a comment earlier in this thread that nobody wants the Barcelona chair discontinued, so why the 9000. Customers are voting with their feet and the 9000 and 3200 continue to sell briskly.

It's very insightful that only gearheads would demand more performance than a pair of BeoLab 8000s. While ALT has brought many into the brand who would have otherwise gone with more serious competitors, there is also no reason to do away with profitable and iconic products. 

TripEnglish, just a quick on the BS3. Unfortunately the issue with the dark levels in conjunction with 3rd party projectors (I own a JVC HD1 and it is a shame how bad the BS3 handles HD sources) is not adjustable. According to B&O even a calibration will not help as it is the way B&O has programmed the processor. So it is feature not a bug....I am close to sell my BS3.

Karsten 

TripEnglish:

355f,

Though a few of your points are factually inaccurate (I don't say this confrontationally as you'll read here), I have to say that I am overall very sympathetic to this perspective. As a dealer myself, I'd like to think that customers and potential customers are taken better care of than your post suggests, but I'm afraid that I know it isn't true. As I've said in a previous post, I think that the problem lies more in the dealer network than in the products themselves. Having worked with them for nearly 8 years, I personally believe them to be superior in nearly every way to any competing product or concept, but even people who frequent this forum and undoubtedly love the product aren't necessarily getting the best information at the dealer level. It's unfortunate that so many retailers can't engage intelligently beyond our portfolio because we can be a valuable addition as components as well as full solutions.

Superior in every way to competing products at the price??  have to beg to differ there im afraid. Most products im working with daily perfom better and are superior.

I'll try to address a few of your issues here: 

While you're correct, some of the active picture corrections work only with the BeoVision panels, I would simply say that there is really no way around this. We don't make Vizios, Pioneers, Samsungs, etc. That sort of adaptive technology is a Bang & Olufsen innovation, and is therefore present in our products and some of the panels on which they're based. Additionally, our panels are expensive not just because of the additional features (anti-glare front glass, aluminum frame, etc.) but because we make a profit. Look at what has just happened to our beloved competitor Pioneer! Maybe they could have learned something from our business model.

 

You have supported my case the bs3 only works properly with beovision panels.

 

You cant compare pioneer who actually invested tens of millions in actually MAKING plasma - to BnO who just import it from panasonic and charge the earth for it- and thats the point- the business model you refer to is over.

And yes, LCDs, Plasmas, etc. all actually do benefit from the source analysis & correction performed by the internal processors. Several of my clients use panels varying from Sony Bravias to Pioneers Elites, and all show a clear benefit. Of course I would also argue your point here that occasionally some tinkering in submenus is necessary to get geometry just perfect and if the salesperson doesn't perform this tinkering, than you're left to wonder what this $8,000 box is doing to your poor Bravia! So this is a great example of where dealers are not living up to the products.

If they buy bravias why bother with bs3 anyway- its well known to be one of the worst performing sets out there.

I have pioneer elites on loan here and the bs3 does not aid the picture in my experience

As for the picture on high end projectors, this is easily correctable in either the BeoSystem 3 or the projector itself, though I must admit that this is not a widespread problem. 

Not so the tru hidef projectors work best bypassing the BS3 altogether

Lighting & drapes are quite easily controlled with a few inexpensive relays (less than $300 US). If you're already going to have motorized window treatments and Lutron lighting, than the cost and complication to have the BeoSystem 3 take command is negligible.

 

If I have lutron I dont need BS3!!  the bs3 doesnt actually really do ANYTHING in that regard. In can interpret rs323 but thats it.

As for control of 3rd party products, I would argue that it is exceptionally comprehensive and with the Beo 5, even easier than ever. The Beo 5 will also control non-B&O with time and this will allow even more seamless integration of non-B&O panels and peripherals that may not be directly controlled by a BeoSystem 3.

Fact is it beo 5 ( i have one) cant even control the present BnO  products properly without going backwards and forward to the dealer to resolve the issues because there is no user software and it does not control third party products now and when it does you can bet it wont do third partyb products in a seamless way.

As for the speakers with Powerlink only, if the noise floor on the Denon is keeping them awake, this sounds like an issue with the Denon and not the BeoLab 9s. Any active loudspeaker has to identify a line sensitivity to turn on and off and so would occur with other brands of active speakers. If the sensitivity was turned down, we'd have complaints that quiet sounds wouldn't wake them up.

Why have power link only sockets on the speakers?? why do other active speakers like meridian work ok with my high end denon- certainly higher end than ANYTHING bno can produce.

I hope that this clears some things up. And again, I apologize. I take these criticisms very personally sometimes because dealers allow many inaccuracies to go unchecked and in turn, many people are missing out on fantastic user experiences. Our products play very nicely with other brands and often enhance the whole experience either from a quality standpoint or from a usability standpoint. Sure they're expensive, but the alternatives at our level of build quality and performance make us look like a bargain! 

I understand that these points are made by a dealer with a somewhat restricted view of the market and im afraid not one of my points has been cleared up by this post as i have indicated.

With respect if the picture is as good as you paint it why will BnO very shortly be losing money with a catastophic drop in sales?? could it be because most dont share a dealers vision and the obvious vested interest such a relationship entails

@ Trip. I can follow your points in regards to the panels. However for projectors, I agree with Kawo. They support 2 old outdated projectors officially that is it. They don't have an own product neither do I want them to come up with one. There are few projectors that technically will not work at all. This was posted before here, I have forgotten which one they were.

Who would want to spend 60 to 100k on a home theater and then get an old projector or get something that may stop working down the line as it is not officially supported.

 If they provide their own solution, I don't see a reason why they should bend over. However where not, I think they need to work out the "official" support. 

 

I am still very grateful that they support Apple TV from my BV8. That is perfectly integrated through the STB. That is a prime example how it should be and shows they listen to their customers. That makes me also believe that they had very good reasons why BV8 doesnt have surround or we still not get many HDMIs on most TVs.

JK 

 

 

 What on earth would possess someone to buy a Denon? I've seen a few in my day, but I went to the website to explore and I threw up in my mouth. How could any specification or feature in the world be worth having something that dreary and complex polluting your home? Seriously? I'm not being glib here. 

Time after time people throw bricks at Bang & Olufsen and I have to wonder to myself, "then what are they buying?" When I look at things like a Denon receiver, I don't even know what to think. It would be like wearing sandals with a suit. I just don't understand the perspective.

I can only imagine that you'll come back with "BUT IT DOES THIS AND THIS AND SUPPORTS 24FPS!!! AND IT HAS 32 HDMI INPUTS AND THEY'RE ALL HDMI 1.3 AND AND AND AND." But I'll just glaze over and wonder, "who gives a sh**?" It's ugly. It's complex. It's cheap. It has a remote that cost 12 cents to design and 2 minutes to design. Now I'll need to program some idiotic handheld pontoon of a universal remote control and people will come to visit me and whisper behind my back about how they're "worried."

 

Just one more thing:

http://usa.denon.com/ProductDetails/3922.asp

Seriously, I couldn't stop laughing when I saw that minefield of logos of all the things that this hideous box "supports." I can't take anyone serious who gripes about the BeoSystem 3 and then goes and buys something like this. Seriously. It gives me a headache just thinking about what this thing is like to own. This website is the most embarrassing thing I've ever seen.