9 LEE:

Flappo The Grate:

bno have more to lose than most brands , certainly in the av world

how on earth are they going to become competitive when everyone else's prices go down and there's go up ??  ?

i'd hate to be in their shoes right now !! 

I don't think B&O need to be competitive with mainstream brands Flappo, i think they have just let the whole pricing structure go a bit rhombus shaped!!

Back in the late 90's, an Avant was twice the price of it's nearest rival.  Wow.. TWICE the price - that's brave in any market.  However, the Avant was twice the television, with twice the image quality, twice the design, twice the sound quality (at least) - and discerning buyers were happy to pay twice the price of the nearest rival.

Zoom forward to present day..  the BV7. Around 4-5 times the price of it's nearest rival..  Problem - it's not 4-5 times better.

Bang & Olufsen are between a rock and a hard place, as slashing prices would really hack off the people who had recently paid top dollar.  Aiming at the ultra-high end may be a quick fix, as these people rarely care as long as the label is there. However, if you are trying to elevate the brand to high-fashion amongst the worlds million and billionaires you need to remember fashion has a habit of casting you aside when people get bored!

Only my ramblings...

Lee

 

Two issues here I think.

B&O should not reduce the prices- lets face it the percentage drop would need to be very siginificant to make a difference .

Aiming at the ultra high end wont work because they are miles behind better placed brands in that arena- and if they do that at least 70% of dealers will shut.

There are however many positive things they can do to improve matters by some margin and I wrote to the Chiarman of B&O some months ago but needless to say- never had a reply- and that says it all about present company ethos at Band & Olufsen.

Some companies need a corporate collapse to bring about a sea change .

No pricereduction and no high-end?

Well, you really believe you still can sell enough 20.000 euro 50 inch plasma's nowadays???

Lee is a absolutely right in his analyse

 Lee and many others B&O fan is willing to pay for the B&O brand, but we are not all idiots.

 My next next flatscreen ( or AV) will therefore be another brand,  that I can or will effort to pay ( proberly double as normal)

 (notice that I have  stocks in B&O 

Dear All:

Do not forget that part of price increases are also due to the weaker dollar, at least in the US.  

Notice how everyone mentions the superb value of the BL 5.  Perhaps, B&O needs to duplicate that level of success both commercially and media with its other products.  The audiophile community for the most have enjoyed the BL 5 which, I think, is a testament to its quality of sound reproduction.  

I enjoy B&O speakers because they are active and I do not have to deal with preamp, amplifier, etc.  They do, however, need to improve the components of their other speakers as well.  At least for now, I am enjoying the sound out of BL 9 but it could be improved for its cost.

Dario 

Guys......

I would just wait and see what happens. For me, I dont think B&O will come out of this economic downturn relatively too badly. Of course, that relative depends upon the depth and length of the downturn. Do they have enough cash to survive? I think their survival will have little to do with their products, features or design etc... It will be more to do with how they can cut costs to suit capacity (or more correctly demand).

Personally, I think all the low-end and mid-tier company's are going to do a lot worse; Mr & Mrs Neogeorgian from Doncaster or Reading are going to fare the worst. they are the ones in the face of +10% inflation, rising mortgage rates and taxation are going to stop changing thie Pioneer or Sony or Samsung every year for the latest and greatest. They're going to cut down on the Sky HD subscriptions and purchasing of BR-movies.

The distribution of population who do buy mainstream AV's (£1000 - 1500 panels and players) are going to have a far greater economic impact than a few low volume B&O sales. Sony, Pioneeer and Samsung etc..are going to struggle to cut capacity, will have invested very heavily in mass production facilities during the boom and will inevitably, I fear have to close down whole plants or consolidate outsourcing.

The game will be who can tolerate the cost of production longer than his competitors to survive, not volume.

My 2 cents

10%

Mr10Percent:

The distribution of population who do buy mainstream AV's (£1000 - 1500 panels and players) are going to have a far greater economic impact than a few low volume B&O sales. Sony, Pioneeer and Samsung etc..are going to struggle to cut capacity, will have invested very heavily in mass production facilities during the boom and will inevitably, I fear have to close down whole plants or consolidate outsourcing.

I definitely agree with this. 

In the US, I do think some of B&O's success of the last few years was tied to the housing market.  I recall reading an article in the newspaper a couple years ago about the trend of taking out larger mortgages to finance extravagant home theatre systems.  B&O was specifically referenced as a major benefactor of this trend.  This could also help explain the "detached from reality" pricing... it wasn't just the "super rich" buying their screens (as seems to be the consensus around here), but also overly optimistic Americans (enabled by overly optimistic financial institutions) leveraging the future value of their homes.  $20-30K?  No worries...  my house will appreciate more than that next year! (and for a couple years, it did!).  This probably represented much of the recent growth in US sales over the last few years. It could also explain why my local B&O dealer, until recently, didn't seem very interested in you unless you were looking to dump $20K in a home theater system.

Now, that market is gone, and it turns out there just aren't that many "super rich".  The question is how optimistic was B&O, and have they made bad investments based on an overly optimistic outlook on their future value.  I haven't heard of any big new factories - hopefully, they didn't take out a big loan for their fancy headquarters.  Given their public statement that started this thread, at least they have some grasp of reality and are on a path to size their company appropriately to the much lower demand...  Hopefully, there is some bloat to cut, and enough demand to keep their R&D intact. 

Then again, I got a mailing from B&O yesterday announcing the BV8 - in the attached letter, they said it had a price point that would make me want to say "I'll take two".  At ~$4K each, maybe they still don't get it.

Stan
 

reminds me of our wonderful labour government who after ten years of growth and now faced with the very real risk of a recession are blaming america ( how convenient ) rather than their own incompetence and over spending

what amuses me is that some people seem to think gordon brown is so smart

 he's the guy who made the all time classic/stupid quote 'we are putting an end to the boom and bust economic cycle !' 

maybe he sits on the bno board ? 

OK - give me a break.

Integration?  A B&O strength?  Compared to what is out there now, the stuff is still stuck in the 80's.  Sure if you buy EVERYTHING B&O that is one thing, but plug in an iPod?  plug in a TV audio signal?  I have been on this forum for years now and I still can not figure out powerlink, masterlink, beomedia, etc.  I have a PC2 - a useless piece of junk.  Sure the Beo4 is great, but it also is, what 20 years old?  This is just beyond the high priced TVs - the audio stuff as well.  My 3200 work on digital media technology that never caught on and is a pain to work with.  Yes, technology is moving very quickly - but so is the easy in which it can be integrated into a system.  Even the simple things would be nice - an extra AUX input?  Some better way to link non-B&O stuff (audio and video) to the rest of the world.  If B&O wants to continue on this exclusivity in terms of connectivity, price, high-end perceptions then they can follow the past of similar technologies that were better than the competition, but faded away..... can someone say BetaMax?  HD-DVD?  Records?  Or what about good ol'fashion CRTs?  I look thru magazines to see what Samsungs and Sonys are coming up with (not to mention Apple which is in a completely different Universe) and say Wow that is cool!  iTunes vs BeoPlayer - not even close!

My current B&O system will probably be my last - and I am hard pressed to even see addition to it anymore - there is no WOW and prices are silly and I will need something that will work with modern video (I will probably get an AppleTV for $250.... how much is Beomedia...and what exactly is it or how does it work. 

When Apple comes out with their home media system that is what I will get - and I know it will be cool, it will work, and I wont have to take out a second mortgage.... who cares if the rest of the world will also have it.

-michael