As has been mentioned before,the Chinese are perfectly capable of producing high quality,high spec products.

In fact I am typing on an HP Laptop,resting on a Logitech Speaker Lapdesk,both of which are high quality,and made in China.

One would expect B & O to be exercising a stringent QC regime over one of it's third party suppliers.

If one feels that a product's quality is commensurate with it's cost,does it really matter where it is manufactured?

The problem with this "China" issue is more snobbery rather than knowledge of manufacturing. People just assume that only Western manufacturers are somehow pioneers of quality manufacturing. Ironic, considering there was a recent German poll and their view of British manufacturing quality was fairly low - viewerd as manufacturers poor quality goods.

Chinese manufacturers do what you tell them to do. When Apple, as an example, design their high-quality products, they don't design them around what their Chinese manufacturer is capable of producing! The other way around. Apple design the product in their labs and, when complete, they show the specs to their manufacturers and they get the factories tooled up to cope.

Indeed, I'd go as far as saying that the Chinese go beyond what they need to meet a clients requirements. They are only too happy to get it right. They are very very embarassed if they get production wrong - unlike in Britain where we can't get Brit workers interested in manufacturing.

As for Chinese "quality issues", those issues come from our consumer demand, rather than the supply. We DEMAND cheaper goods and, because of this, the suppliers are always finding ways to cut corners, so they can cut costs. To get your 50" TV for £799, the manufacturer uses even cheaper plastics, cheaper speakers and so on.

That's where the pereception of poor quality comes from, not the manufacturing process.

Armani and many luxury clothing brands have been producing in China for years and barely anyone has noticed. People still buy from those brands as frequentely has they have done previously. Only difference is, Armani is making more of a markup as they can get them produced more cheaply.

Getting the BeoPlay and other "cheaper" products produced in China doesn't affect my view of Bang & Olufsen. As I said above, the Chinese haven't designed the products for B&O. They are 100% B&O. They specify the design, the materials and the components.

We all worry about B&O losing money, share price going down and so on, then when they look at a way of saving some money and getting goods on the shelves more quickly - like other manufacturers - we see complaints coming in.

This is modern life. We all want cheaper prices and more quickly developed products, but we want them made in Denmark, too? We can't have both. Blame consumerism for a start.

And no-one said it is "made in Denmark". My BS8 quite proudly says "Made in China" !

I totally agree with Dkatz. Bang&Olufsen have lost it! Quality top brands do not fully out source.

When asked over the weekend about Chinese made products, my younger generation thought 'poor quality, high profit'.

I've just come back from a long weekend in the Lake District.  Our Lake House had a Yamaha micro system in it. I conected both my iPod and iPhone to it and it TOTALLY blow the BS8 away. Far clearer treble, better mid, far more bass and totally rocked a party. This retails at £299!!!   The BS8 is three times dearer. I'm totally to the conclusion that B&O are aimed at the rich old man who is stuck to their products. I saw the BS8 in the Apple Store in Covent Garden last week. There must have been 200 people in that store and not one person was interested in the B&O.   Made in China - outsourced B&O? Profit profit profit taken from the rich man!

Tod Daniel:

I totally agree with Dkatz. Bang&Olufsen have lost it! Quality top brands do not fully out source.

Most of the modern luxury clothing brands now manufacture in China. Most consumer electronic developers do, too.

There's a reason beyond pricing - it's supply. Apple will demand a certain amount of stock for their retail stores and there are only a few manufacturers capable of tooling up and producing product in quantity. B&O's factories are more suited to product on demand.

Just get used to it and, if you don't think the brand is for you, move on. I know, for one, I'll be enjoying my BS8 as much as I do any other B&O product (and more so, in many ways).

Tod Daniel:

Profit profit profit taken from the rich man!

Ironic considering the price of the products, 'eh?

Let's just see B&O fail and be done with it! Clearly you understand how to pull B&O out their hole better than B&O.

Question for Dkatz and Tod Daniel..

If the BeoSound 8 was truly manufactured and assembled (every last process - all the way) in Struer, Denmark.. would you pay £1,495 for it ?

That would be the price if it was 100% 'Made in Denmark'

Answer honestly.

Lee

There are a couple of people on this board who are always complaining about the price of the BS8 - they say it needs to be even cheaper. Now, I'm not going to fully disagree I'd like to see it come in at £699, but you are getting a lot of £890. You receive speakers close to BL4000 quality.

I barely can fault my BS8, but I can't always say that about my Danish-produced B&O kit. Particularly software issues (BV7, BS5 etc).

Here's that article about British manufacturing: http://www.guardian.co.uk/commentisfree/2012/jan/06/ian-jack-germany-manufactures-success?INTCMP=SRCH

And, as Brits love to consume (and seek the cheapest prices), we'd have more of a piece of the pie, if we weren't to blame for our own purchasing decisions:

http://www.guardian.co.uk/commentisfree/2011/dec/30/doing-it-german-way?INTCMP=ILCNETTXT3487

Probem with the general public, is that they want everything to be cheaper and cheaper, so they can consume more, more often, but they want a Swiss-made watch or a Danish TV in return.

Tod Daniel:

I totally agree with Dkatz. Bang&Olufsen have lost it! Quality top brands do not fully out source.

When asked over the weekend about Chinese made products, my younger generation thought 'poor quality, high profit'.

I've just come back from a long weekend in the Lake District.  Our Lake House had a Yamaha micro system in it. I conected both my iPod and iPhone to it and it TOTALLY blow the BS8 away. Far clearer treble, better mid, far more bass and totally rocked a party. This retails at £299!!!   The BS8 is three times dearer. I'm totally to the conclusion that B&O are aimed at the rich old man who is stuck to their products. I saw the BS8 in the Apple Store in Covent Garden last week. There must have been 200 people in that store and not one person was interested in the B&O.   Made in China - outsourced B&O? Profit profit profit taken from the rich man!

I don't believe I have been to the Apple store in Covent Garden but I assume they sell the same Apple products as all the other stores.  All Apple products are made in China and almost everything in an Apple store is made in China.  If customers are not interested in Beosound 8 in the Apple store, there must be some other reason.

BS8 is selling OK in apple stores - not sure about worldwide, but certainly enough or apple to be happy.

Also - the idea suggested here by some that apple buyers shun Chinese-made products with a premium price over "multibrand" is joke, surely.

Whilst some apple kit is not too pricey, much of the ( Chinese) range is twice the price of similar specified kit - just like much b&O kit is.

A no-optical drive notebook for £1000, laptops for £1800, desktop computers at £2k and over.

ALL of these can be substituted by products costing maybe 40 or 50%, and offering ( superficially) similar performance.

But, just as using a Beo4/5/6 to control Sky via a BV10 is simply a joy, I assume listening to mp3's and writing a word doc on backlit keys, within an alumium encased laptop is worth more than listening to the same MP3's whilst using my Acer netbook to write.

I don't think people realise that these days some of the best factories in the world are in China!

China has the money and infrastructure to spend large amounts of dollars on the best machinery in the world. They create amazing factories that can make anything, you just tell them the specs and the cost price. You can take absolutely anything to China, and you will find at least one factory that will be able to reproduce it to the exact same quality and specifications for a lot lower price. So much so, that you wouldn't even see the difference!

I think people should get off their high horses about Chinese manufacturing, just like they did in the 80's about Japanese manufacturing..

I agree with Dkatz. I see no other reason for moving production to China other than cost cutting and production volume. Logic and experience tells me, to do that, there has to be a compromise – That being quality. I’m a huge fan of B&O but the fact that their products are increasingly made in China or Korea is off-putting.

Terry - I am not saying that the Chinese are not capable of producing products. This is obvious with Apple products which are not bade quality to say the least but they are low level consumer products. No offense but an HP Laptop with Logitech Speaker Lapdesk is not what I consider to be high quality equipment! When I speak of quality I don't mean “specs” in fact most laptops have similar specs, it's about the build quality of the assembly. In this sense the Panasonic Toughbook which is built in Japan (they even make their motherboards in the same factory in Japan) of magnesium with a spillproof keyboard, shock sensors, a touchscreen, and super professional and heavy duty is a QUALITY ITEM.

The problem is that when you outsource you lose control because it is not your factory anymore. Yes they can try to be stringent and to an extent get somewhat decent quality but the BS8 does not commensurate the cost. It is manufactured for the same cost as units 1/5 of the price yet sold at 5 times more...

Moxxey – I have a lot of knowledge in manufacturing! I wrote my dissertation on outsourcing manufacturing to developing countries and on top of the years of research I have done, I have also visited dozens of factories around the world! British manufacturing is of excellent quality as is German. There will always be certain products which will lack in reliability as some British cars or even BMWs which are known for electrical problems. I have a Lotus which is handmade in Hethel, England and I love my car. It's been the most reliable car I have ever owned, moreso than my Volvo 760, Alfa Romeo GTV, Jeep Grand Cherokee, or others. I love knowing that the people who built it went through apprenticeship schemes training for years, that they are passionate about the company they work for and the cars they build. It's not something one can say about a company that hires people for tiny wages to build whatever for hundreds of companies like robots.

Apple differ from other manufacturers as you mentioned but they are still low level consumer products and reflect the cost. An iPod for 200-300 bucks is not that much, but if a handmade Danish/Italian/British/German Unit cost 1000 I would rather buy that to support the manufacturer that didn't outsource and that chose to support the local community and workers.

I will highly disagree with you on what you said about British workers not being interested in manufacturing. Most have been laid off because of outsourcing, it's not like companies are trying to produce in Britain but there are not enough workers to do the job. You are gravely mistaken if you think there are not extremely high quality and good British products. Look at Genesis car amplifiers which are completely handbuilt (even the circuit boards are hand soldered) in England. Their amplifiers are not that much more expensive than other brands which are made in China, yet they still turn a profit and the workers there are proud of their work. In fact not so long ago you could buy many British products for the same price as their outsourced counterparts, a case in point being Dyson which used to be made in England but is now made in Malaysia for 1/10 of the cost yet charging the same price if not more than when they were built in England! The companies are not trying to save the consumers money, they are trying to fill their pockets with lots more money! Hence there is a fallacy in your statement that it's all because consumers want cheaper products...

In terms of luxury brands, I don't consider Armani a luxury brand. Real luxury brands such as Louis Vuitton and Hermes don't outsource to China. My John Lobb shoes are bench made in England and so are Edward Greens which are the highest quality ready to wear shoes. There are so many insanely good quality British products that nobody can dispute. Rolls Royce is perhaps the best quality handcrafted car in the world, there are so many amazing products coming out of manufacturing in Britain that you would be surprised. Sunspel is another example, they make some of the best quality underwear in the world made in England! These are all truly high quality brands!

I don't worry about share prices or boardmembers or the CEO. This is exactly the problem with a lot of companies these days. They worry about their shareholders more than they do their consumers or their employees for that matter. If they can turn a higher profit and become mufti-millionaires In the process then why not make a higher profit? Who cares about the local community that suffers (look what happened to Detroit after GM pulled out to go to Mexico, thousands lost their livelihoods, many of whom worked for generations at GM) and the poverty that is then laid on to it or that the cities livelihood depends on its manufacturing sector?

As I mentioned Apple is an exception due to supply although cost is greatly reduced and profit margins are a lot higher. Although there are companies that manage to mass produce at a low cost and still meet supply and demand. A good example of this is American Apparel that produces all their products in the USA from US grown cotton. They charge about the same and actually less than many comparable brands that are made in China. There are always products you can buy for a comparable price that are made in the developed world. Another example is the German made champagne flutes I bought for $9 for a set of four brand new at the supermarket today, they are cheaper than Chinese ones I have seen for twice or three times as much and much better quality! There is even a vacuum manufacturer that brought manufacturing back to the USA called Riccar: http://www.riccar.com/ their Vacuums cost 200-250 USD which is less than Dyson and other brands that are made in Malaysia, China, etc! They still have a high profit margin and even produce their own plastics and parts for the vacuum in house!

9 Lee – Yes I would pay more than 1500 GBP for such a product if I wanted it and it was made in Denmark. For me B&O has always been an audiophile brand and a brand of Danish Design AND MANUFACTURE. I would rather pay a little bit more and buy the Beolab 4000 speakers which are not made in China and hook them up to my MP3 player or computer and have better quality sound than some ipod deck though. Bang and Olufsen users are used to the prices they pay for these products, who else would shell out 10,000 for a TV or speaker system? The point is by making these lower price goods they are lowering their standards as a brand.

Can you imagine Rolls Royce saying “We're going to outsource our manufacture to China so that we can build a car for the masses, yes it will cost 70,000 dollars and have some luxury.” They will never do that in a million years, in fact they make their own wood, stitch their own leather, all in house... Why is it that jumbo jet engines are made in their factory in England and not in China? There is a reason for it and it's called quality!

Moxxey – The whole point of B&O was that it wasn't for the general public. People who can afford B&O buy it regardless of price. I'm tried of hearing people complain about how expensive B&O is because it's not, at least not for the Danish made products. Compare it to other audiophile manufacturers who make their speakers in Denmark such as DALI and you will see that the high end B&O speakers are not that expensive. There is even Dynaudio which is actually cheaper than most B&O and also made in Denmark!There are many many other companies that do not lower their standards, do not outsource and do not market to the masses in order to fill their pockets with cash and their shareholders with dreams: Opera Loudspeakers – made in italy, Genesis Car Amplifiers- Made in England, FaitalPro – Made in Italy... Blue Jeans Cables are made in the Seattle, USA from US cable and Japanese connectors/terminators, they are audiophile quality and $6-10 a foot for an RCA for example! All of these companies make their products almost completely by hand, even soldering the circuit boards by hand!

I respect transparency, I respect companies that pay good wages and take care of their employees. I respect companies that support their local communities that offer trainee schemes.

Jonathan – You cannot even begin to compare China to Japan in terms of manufacturing. Japanese quality in the 80s was excellent and Japan was the richest country in the world at that time. In fact the wages were higher than in many other developed countries. Most companies did not outsource to Japan but in fact Japan had their OWN WORLD RENOWN COMPANIES such as Sony, Panasonic, Toshiba, etc... that took the world by storm with their own ingenuity and their own genius. China is the complete opposite, they just copy what is given to them to manufacture designed by the west, and manufactured FOR another company. China is a third world country with third world country wages, Japan is one of the richest countries in the world with one of the lowest separations between rich and poor, China is again the complete opposite. How many Chinese companies besides Lenovo do we know of? Not many... The point is that China manufactures FOR other countries, Japan manufactured for itself. Japan invented and designed many things, China just copies and makes what the west invents.

On top of this Japanese products are some of the most expensive and best quality in the world today as I mentioned with the Panasonic Toughbook. Interesting to note is that nearly all the Japanese companies outsource but they keep the higher end products to their own manufacturing sector. For example Canon and Nikon manufacture their higher end cameras (D1, 1D, 5D, etc...) whilst their lower end ones are made in Thailand, China, Philipines, etc.. Same with most of these companies. They don't even advertise this fact so most consumers are unaware. If quality really didn't matter why would they manufacture it in Japan instead of China? Why would nearly all the high end and professional equipment in the world be made in the developed world if not for quality? Don't tell me it's because they are afraid of getting copied because it's not like the technology is that far ahead, it's more about build quality than anything... Everything I buy is made in the developed world and there are thousands and thousands of companies that I will support that choose not to outsource. My Lanvin tie is made by hand in Italy, so is my Valentino shirt. My louis vuitton wallet is made in France, my John Lobb shoes are made in England, my Fujitsu computer is made in a special factory in Germany, the list goes on and on.

We as consumers have a CHOICE, I chose to boycott these outsourced products because I believe the companies are ripping me off. As mentioned if they charged much less for the product after outsourcing then I would understand but unfortunately the decrease in cost is not transferred to the consumer but only to the CEO, shareholders, etc...

Nobody seems to have answered my question as to where the Beosound 2 and Headhphones I have were built? It doesn't say on the box or unit or anywhere... I bought them in 2006... If nobody knows then B&O are definitely not being transparent enough with some of their products.  

Some very interesting points and again, I agree with you.  Could the whole outsourcing thing be a symptom of a “throw away society” these days. My impression is that many want the latest and greatest gadgets with all the bells and whistles as cheaply as possible. Who cares if it only lasts 3 years instead of 30 years.  It will be replaced anyway when the next model is available.

Dkatz:

Moxxey – I have a lot of knowledge in manufacturing! I wrote my dissertation on outsourcing manufacturing to developing countries..

I'm sure you did. That's something people tell me all the time. "hey, I mastered in this...!".

Well, this is my business. Tech publishing. Many years in this business, in a real-life environment.

Dkatz:

When I speak of quality I don't mean “specs” in fact most laptops have similar specs, it's about the build quality of the assembly.

When you design a product, you create a specification. This specification contains detailed information about how the product should be manufactured - the materials you want using, for example. The specification also accounts for the cost of the materials, which is why you don't get moulded rubber on the back of the BS8, as an example.

It is HP and others who decide on this specification, not the manufacturer. Apple, HP and others do not decide "what can my manufacturer produce? Ok, we'll work around their limitations". It's the other way around. Apple design a product and a manufacturer is found who can meet these specifications, the job plan. 

It's us consumers that demand poorer quality materials, simply as we demand lowers prices. As a result, HP and others specify poorer quality plastics, simply to bring the manufacturering costs in on a level where they can make a (good profit).

As I said in another thread, when Apple, B&O and others specify, say, a rubber for their products, the manufacturer doesn't turn around and say "we can't do that, we can't source the material" and Apple/B&O turn around and say "ok, let's do it in a cheap plastic instead!". That's not how the process works - your disseration research should have given you these basics.

The build quality is specified by the company designing the product. The primary reason that Apple, B&O, HP and others are using Chinese manufacturers, is simply to do with ramping up production to a level - and price point - where they can make a decent profit. If you knew the first thing about Apple, B&O and other luxury brands who manufacture in China, you'd also know that they would never compromise on quality, unless they had to raise the price - which is why the BL4000 level BS8 can come in at <$1000.

If you want to blame someone for poor build quality, blame consumers for demanding super-cheap prices and wanting products that, frankly, they can replace sooner rather than later. 95% of consumers do not want top quality superbly made products which they'll keep for years. 

From what I have read even now in China, the average wage has risen significantly factories are struggling to keep there costs down as low as they could do due to labour costs.  I think China are more than capable of producing a well made product, at a great price.  Its labour costs that kill manufacturing, hense why no british car manufacturers are left( also the fact that they were crap)!  Its a bold move for B&O and I hope it works for them as I wouldnt pay £1500 for something made in denmark when it can be sold for 2/3 of the price if made in china!  

In the future I think we will be making more stuff in africa after china is to much! Give it 10 years and someone will build a plant there producing something or another!

Dkatz:

The problem is that when you outsource you lose control because it is not your factory anymore. Yes they can try to be stringent and to an extent get somewhat decent quality but the BS8 does not commensurate the cost. It is manufactured for the same cost as units 1/5 of the price yet sold at 5 times more...

Firstly apologies for only responding to a short excerpt of you post -

Having Engineering, Manufacturing & Quality in the same building can actually have exactly the opposite effect! Finding problems in product which are ready to ship can create interesting issues which can result in the product being shipped anyway, knowing only a calculated percentage are likely to be returned. Other scenarios can and do occur with similar results - the rationale is often called a "business decision".

It is entirely possible, and I've seen it happen, that having product built by a third party results in standards being set high and being rigidly maintained. Any issues arising can be in effect "blamed" on someone else and product held until corrective actions have been put in place (and any resulting charges billed).

Having manufacturing and quality departments under the same plant manager is always an interesting watch!

Nickyg63:

 

In the future I think we will be making more stuff in africa after china is to much! Give it 10 years and someone will build a plant there producing something or another!

That will probably be the Chinese...and in a lot less than 10 years....

Massive land grab going on there ( and elsewhere) as China aquires oversees assetts.  Keep an eye out :-o

They are seemigly after resources at the moment - but once you own the land....

http://www.independent.co.uk/news/world/asia/fears-of-chinese-land-grab-as-beijings-billions-buy-up-resources-2095451.html

Moxxey – My dissertation was on how outsourcing manufacturing reduces control over the manufacturing process as you give up control to a third party. It was mainly however about how outsourcing manufacturing has caused a separation between rich and poor both in the developing and developed world. 10's of Millons have lost their jobs in the US alone in the past 20 years due to outsourcing manufacturing. This is all they knew how to do, retraining everyone in services is just unviable hence the unemployment rate rising. To top this off many in the third world are suffering too, yes their wages might cover basic food and amenities but they don't live an amazingly good life. On top of that the factory owners make hundreds of thousands, maybe millions off the thousands and thousands of people who work for pennies for them. Hence the separation between rich and poor, factory owners (less than 1% of the populations) getting richer whilst the rest of the population stays in poverty. In fact China has a lower rating than many African countries in terms of both development and poverty levels according to most international organizations and NGO's. They don't have the labour unions we do, I would pay 10 times more for a product because I respect companies that pay their employees well!

I have many friends who have their own companies, some that manufacture in their own country in their own factories and others who do outsource. The ones who outsource admit to me that they themselves think their product would be better quality if it were not outsourced (one of them is actually in publishing as well but not tech publishing). None of them have actually seen the factory (although this is not always the case, some big companies do go to China to visit the factories). None of them have LOWERED the prices to reflect the change to outsourcing for the consumer, some of them have even raised the prices whilst making a huge profit. My friends who didn’t outsource, such as my friend who manufactures nail nippers and cutting supplies in Japan, expanded and rebuilt his factory in Niigata, Japan so that he could meet the growing demand for his products. He created an even bigger workforce and has visited many factories in China, he could not find a single one that would manufacture to the quality that he demands.

That being said I have yet to find a laptop that's better built than a Panasonic Toughbook as far as build quality. I have yet to find a cotton softer than Italian ringspun cotton made in amazing Italian mills, have yet to find a wool finer than the super fine micron wools from New Zealand that win prizes everyear, have yet to see any kind of leather from China that even closely matches that of Hermes. Have yet to find glass as good quality as the ones you get from Murano in Italy.... The list can go on and on and China has yet to match the quality of those things... Why is it that the best violins in the world are made in Cremona? That nearly all audiophile products are made in developed countries? That all super professional photography and film equipment is made in developed countries? If China could match that quality they would and those products would be made there...

As mentioned before if China was so great and consumers were so stupid, then why are all the companies keeping the higher end stuff to their own manufacture? Why do Sinfoni and Audison make amps in Italy when they can make them in China for 1/10 of the price and make 10 times the profit? Why did Silicon Graphics make computers in the US from mostly US components and US made circuit boards, etc... (I have I owned many silicon graphics machines and parts) whilst the “consumer brands” made theirs in China? Yes perhaps part of it can be blamed on the consumer, but I am willing to pay a higher price for something that is not made in China.

Today I bought yet another thing – beautiful handmade Italian ceramic plates on sale for $2 (normally $8 which is still not expensive). Why would I buy Chinese ones for the same price? My point is you don't have to pay an arm and a leg to buy things which are not made in China if you are a consumer seeking cheaper products!

I don't think Apple is that much of a luxury brand, it's just an average consumer brand in my eyes. B&O is a luxury brand and that's why I can't see them making a <$1000 product of any sort (with the exception of MP3 player, headhphones, remotes or other accessories), especially if it is made in China. As I said, people who buy B&O are not average consumers like those who buy Bose and that's why I don't want it to become that kind of brand. People who bought B&O and paid $5000-10,000 for a pair of speakers were NOT the average consumers demanding lower prices that you are talking about. If they were they would not buy that! This is exactly my point!

Nicky – If you cannot pay 1500 quid for a Bang and Olufsen product why are you even a B&O enthusiast? People who buy B&O are people who are willing to pay thousands for decent quality speakers. The average wages are kept super low in China even if the have gone up they are still low enough for people not to go to other countries. There are still a few small British car manufacturrers that are independent such as Morgan. British cars are all made in Britain STILL, Rolls Royce, Bentley, Lotus (which I have and love and think is the best company in the world), Jaguar, the list goes on and on, they might be owned by a foreign company but they are all made in Britain mostly by British workers!

Nobody has answered my question yet about the Beosound 2 and Headphones...

Yes, thankfully the likes of Rolls~Royce and Bentley are not (yet!) going down this route. (Despite them both being owned now by two German giants sadly)  Is that proving to be detrimental to these luxury car brands?? On the contrary ~ both Rolls~Royce and Bentley Motors have both reported huge increases in their order books in the last week alone - up 31% and 37% respectively in 2011 compared to 2010!

The ironic thing about that is that an increasing percentage of these premium brand cars are being ordered by the new, super-rich of China's society, (those that own the manufacturing plants!!) who want to order a bespoke vehicle to their own specifications, and built by british craftsmen, then shipped to China and the like, for their own private use! Do they want to buy one of their own chinese made, low priced products to drive around in...? NO, they want the best in the world, they want to order Extended Wheel Based RR Phantoms costing £325,000 a piece, handcrafted in Goodwood, England or £220,000 bespoke Bentleys hand built in Crewe, Cheshire.

Rolls~Royce Trent engines are by far the most expensive jet engine on the market, and again still hand~built in UK  but Boeing, Airbus etc still want them despite the very high (premium) price of them, all down to the quality of the parts/components and the aftersales service package (which is truly unbelievable) - all things you dont necessarily get to the same degree with rival aero engine manufacturers. General Electric are RR's closest rivals.

This suggests to me that luxury brands that do not go down the outsourcing route and find that they can still survive, even prosper, even in these hard times of global economic downturn,  proves that outsourcing is definately not necessarily the route for premium brand survival. In fact there is a strong case to suggest it is exactly the wrong route to take. Who would have thought that car makers such as Royce & Bentley producing very small numbers of very highly priced products would actually be significantly increasing orders during this world recession? Those prestige companies that see no other option for survival than to outsource to china etc. I believe are in grave danger of their own fears becoming a reality for them, by the corresponding reduction in the level of prestige associated with their brand in the all consuming race to bring lower priced products to the consumer, ultimately could be a self-fulfilling phrophecy. Does B&O want to stay a genuine ultra-premium brand? Or do they want to be competitive with Bose and Sony and others? Maybe B&O should instead be seeking to protect it's 'ultra-luxury' and 'ultra-high price' image by designing and manufacturing in Denmark and keep aiming at 'money dont matter' customers who just want the absolute best...?

If B&O still make world class products that are the best (or among the very best) in the world, they should not be seeking to cut costs massively (by outsourcing) in order to survive. There is plenty of money out there that want to buy the best ~ and to those wealthy individuals price is not the issue - quality and exclusivity is. In other words, they dont really care how much it costs, their only concern is whether it is the best that money can buy......If B&O really does make the best, people will still pay for it. As china prospers massively from all its manufacturing, the wealthy chinese business owners over there may become a significant and growing export market for £20K, £30k, £100k televisions and £100k sound systems from B&O made in Denmark - providing that is, B&O can produce the 'best in the world'..... otherwise B&O may as well outsource and focus their efforts on reducing manufacturing costs in order to deliver the next generation of B&O customers with 'competitively priced' products competing on roughly the same platuea as Bose etc...

Regards,

Dkatz:

The whole point of B&O was that it wasn't for the general public. People who can afford B&O buy it regardless of price. I'm tried of hearing people complain about how expensive B&O is because it's not, at least not for the Danish made products.

Totally agree with this point. I hope B&O maintain the exclusivity of the brand, but I fear that products such as BS8 are going in the opposite direction.

Bentleyman:

Dkatz:

The whole point of B&O was that it wasn't for the general public. People who can afford B&O buy it regardless of price. I'm tried of hearing people complain about how expensive B&O is because it's not, at least not for the Danish made products.

 

Totally agree with this point. I hope B&O maintain the exclusivity of the brand, but I fear that products such as BS8 are going in the opposite direction.

Which, although I haven't read any of the B&O Play press releases so in many ways speaking from ignorance, I believe is one of the main points of the "B&O Play" idea.  Perhaps the BS8 should have been the B&O Play BS8, but then, maybe they had not thought of that yet.  That is, B&O Play = "cheap" products for the unwashed masses.  B&O = high class products for special people...   (note, there is some sarcasm in this post)

Stan:

Bentleyman:

Dkatz:

The whole point of B&O was that it wasn't for the general public. People who can afford B&O buy it regardless of price. I'm tried of hearing people complain about how expensive B&O is because it's not, at least not for the Danish made products.

 

Totally agree with this point. I hope B&O maintain the exclusivity of the brand, but I fear that products such as BS8 are going in the opposite direction.

Which, although I haven't read any of the B&O Play press releases so in many ways speaking from ignorance, I believe is one of the main points of the "B&O Play" idea.  Perhaps the BS8 should have been the B&O Play BS8, but then, maybe they had not thought of that yet.  That is, B&O Play = "cheap" products for the unwashed masses.  B&O = high class products for special people...   (note, there is some sarcasm in this post)

Having a sub-brand isn't unusual - and when it works, both the sub and the main brand benefit, and it needn't be devisive or fall into the peasants/yuppies stereotypes.

Another interest of mine is guitars, and I would use the US guitar companies as good examples of (broadly) succesful sub brands.

Fender have Squier, Gibson have Epiphone and Martin have Sigma.

There are others.

In each case the main brand "values" are reflected in products made with the sub brand logo - usually produced in the East. 

You can pay many thousands for the handmade, top end models or less than £100 for a real budget starter model - with many increments at £100/200 steps that give an interesting, desirable upgrade path with aspirational items at the top end but some realistically owneable stuff in the middle ground.

Fender even has a sub-divided main brand, with a MiM (Made in Mexico) line sitting below the USA made high-end models, but above the Squier brand.

It's fair to say that these sub-brands have not always been well received by "purists", and there have certainly been some dud models - but the same can be said of any product range - main or sub brand.

However, by and large these models do the job they are intended to do - a lower priced, "starter" version of high end models beyond the financial means of "the masses".

Some of the older versions now have desirability and collectability in their own right.

Unlike the B&O Play range, the guitar sub brands also tend to be vidually similar designs to the main lines, but made with lower spec materials and/or lower tolerances - think of a plastic Bsnd9000, or Beolab 6000's made with ABS rather than aluminium.

I hope B&O Play becomes a similar success. 

I would like to see the BS8 re-branded as the flagship PLAY item, probably the Form 2 as well - alongside some new items. 

Other suggestions would be :

c£50 - £70 in ear headphones - as phone/mp3 upgrades.

c£200 universal remote - would need to be plastic, control 995% of brands & B&O.

A 5 speaker DSS package kit for c£1500.  To sell out to non B&O TV users.  - Would need to be high end plastic ( think Bcom 6000) but strongly branded and sounding good - to get users of non B&O TV and audion "into" the brand with a set of B&O PLAY speakers on the end of their XXXX TV set up.

A range of £250 - £500 desk mounted computer speakers - to add onto home PC/apple set ups or for 2 channel TV upgrades.  Same design values as the DSS TV speaker kit - visually similar, with same drivers etc.

A smaller LCD TV for bedroom / kitchen / small TV use - retailing at £500 TOPs

A true portable radio - ideally like a high end Freeplay.  A BeoPlay Radio  Retailing at £150 ish.  For camping / gardening / weekend breaks. 

@Dkatz

I mostly agree with you. I recently wanted to buy table mats from Hermes (120€ a piece) but they were made in Vietnam. So I skipped that one...

I always look for products from high income countries but consumer electronics is different, especially display technology and software where R&D cost billions. B&O can only buy these things from others and can add some of their stuff. They can't be significantly better than the OEM but charge significantly more. And that's the problem even for the richest!

One good example is the Vertu: it's handmade in England. Compare it with an iPhone and most people would take the iPhone even if they were priced equally.

Luxury only works if you need much time, special materials and skills for manufacturing like clothes, watches, cars, trunks, leather goods, loudspeakers, lenses etc. Where R&D takes billions, there's no way you can charge a ultra premium and wait until break even with a small customer base (like 1000 people paying 1 mio $ for an iPhone). Therefore bringing manufacturing costs down is the only way for these companies.