I agree with KingStreet here. It's the enormous focus on share-performance that is breaking a lot of brands, forcing them to take short-cuts. B&O isn't losing money, but neither has it lived up to its potential -- which is actually a promising thing, in spite of the pessimism at the moment. If B&O had delivered its best efforts, and made the best possible use of its stores, etc., and still underperformed -- then there would be cause for dismay.

The potential is huge. 

soundproof:

I agree with KingStreet here. It's the enormous focus on share-performance that is breaking a lot of brands, forcing them to take short-cuts. B&O isn't losing money, but neither has it lived up to its potential -- which is actually a promising thing, in spite of the pessimism at the moment. If B&O had delivered its best efforts, and made the best possible use of its stores, etc., and still underperformed -- then there would be cause for dismay.

The potential is huge. 

Exactly.

Which is why I bought a shopfull ......now then, anyone want to buy a new telly

AT:

redfresnel:

In my opinion it's great that B&O has been careful with which formats to include in their systems. There has been much less formats in the past and it has probably been an easier decision with formats in the earlier days. But for example it was a good choice not make BETA recorder after VCR, even though beta is more proffesional format and would for that reason suit better for B&O, in theory.

I don't agree. The VHS vs Beta was a totally different problem: different tapes, mechanism, heads, and so on. There was no chance to integrate them, and they were really expensive for the first time. This also can be said about laserdisc, Video2000 and so on, so I'am agree, not to invest to a minor and special technology is a good decision. To make something more expensive to offer a rare format is not a good policy.

But the HD/SACD formats are totally different, because they are mostly and only software things, because You can use the same disc, the same mechanism, and the same electronics to play them - for cheap. And this way it's a real
good question: If a noname chinese factory can sell You in Europe a CD/SACD/DVD-A player for GBP 30, then why
a GBP 3000 thing doesn't support these formats? If You can purchase for GBP 400 a BR/HD DVD combo, then why
B&O doesn't offer it in a ten times more expensive player?

So, not to offer the cheap and easy solution for the premium quality in the premium class - IMHO it's not a good policy.

The whole Blue-Ray/HD DVD thing isn't actually as simple as it seems, because both systems use a different laser.

SACD/CD/DVD-A is a little simpler, but still not as simple as 'software'. The hardware required is different (SACD playback requires a laser which can re-focus on the SACD layer of a hybrid CD) and SACD/DVD-A both require substantially more complex hardware to decode the digital signal than CD.

About SACD.

This is an unscientific statistic but its an indicator.  There are more new vinyl LPs available than SACDs.  On the website for acousticsounds.com, which is one of the largest sources of audiophile media in the US, I counted 2642 SACDS and 3689 vinyl LPs available for purchase.  I have ordered from this company a few times without problem.

Unfortunately SACD is really a non-starter. I agree SACD does sound better but the selection of discs is limited.

ed7:

 

Listen guy’s…..

Hate to say it but I think most of you are putting the force of your relative frustrations with B&O as a cause of the “parting of ways” between B&O and TBS..

I've already answered this. It's nothing to do with the CEO. I couldn't care less about the B&O CEO. I couldn't care less about the M&S CEO. I care about the B&O products, brand and future. Nothing more. This discussion happened long before the B&O CEO was sacked - it just happens to be in this thread. If you really believe that this discussion is about the CEO, then you're very much misguided.

who cares if they don't care ? i don't care to care if they care

firing torben was really a weak judgement call if you ask me , ok he misread the market - but it's moving very fast these days , and the bno board are a bunch of boring old farts by the sound of it - no doubt he'll join apple and by next week be laughing AT his supposed superiors

moxxey:

355f:

On many occasions when i have posted regarding pricing I have had the response- well if price is an issue you cant afford B&O and this raised for me some interesting points. It seemed unlikely that B&O purchasers are so stupid they dont look at other products-

335f, I think in fairness that's exactly my experience with the majority (average) B&O customer. Even the dealers admit this. The average customer has a very high disposable income, is 40+, wants quality and ease-of-use and believes that B&O are the 'best in the business' and there's little point looking elsewhere for anything better. They go in there, choose a TV and possibly speakers, get it installed and keep it for years.

The snag is that even traditional B&O customers are starting to look elsewhere as people are simply more clued up than they were even four years ago. Like I mention in a previous thread, my landlords - in their late 40s - are typical B&O customers, but have become slightly more clued up with pricing (they all read the John Lewis 'get your Sony 32" LCD for £500 adverts in the Times, Telegraph etc). They see places like John Lewis promoting a LCD 32" TV for £500 and then go back to B&O and wonder why they have to pay nearly £7K for the BV7-32.

The reason why these people are so successful and have such a high disposable income....is due to them being prudish in their spending. The snag now is how do B&O realistically make these traditional customers realise that the same traditions still exist and it's still worth spending nearly 15x the amount on a B&O 32" than a Sony, from John Lewis.

Interestingly, my flat in london is in a block with some pretty well off individuals in it and they all have avants, bs9000, bl8000 but NO one has any of the newer items. £12500 for a plasma- stuff that comes the response- £8000 for an lcd- no way! NO one i know - within the busienss or outside of it believes that BnO is the best in the business now and thats without exception.

So these are individuals that know the brand but are no longer convinced it offers value for money- even if that value is deemed to be  7 times the cost of a sony.

So whilst one can accept there will always be millionaires who are barking- that does not compose the mass market and will only keep dealers alive in knightsbridge - and its this market that BnO have lost and i think this started about 2 years ago. A lot of credit and the fact that dealers are forced to buy product as BnO release new things has masked the problem. the fact that sales are down now is a lagging inicator of a much more serious problem!

Coming into this long thread very late, my 0.02 worth is that B&O are now operating in a particularly difficult environment which their business model doesn't quite work anymore.

Previously AV technologies were relatively stable CD tech, Standard TV Tubes etc. So B&O purchased mature, high quality components from other manufacturers such as Sony, Philips etc and repackaged them in superb style, linked them together, and made the product family look very desirable and indeed aspirational. At a cost which was several times the cost of competing products, but still seemed good value as a package.

Now however they still buy in components and repackage, but the pricing now seems out of kilter with the competition, just too expensive - still using a pricing multiple for the LCDs based on the price of flat screens 5 years ago before the market for these products took off. 5 years ago a plasma was typically 4-5k with the B&O at 7-8k. Now of course due to mass production these products are around 1-2k while the B&O equivalent are still 7-8k+. The differential is too great and crucially the competition is often technologically superior. The latest generation of Plasmas/LCDs are of considerably better picture quality than the those used in B&O products from last year and probably this year. Hence spending vast amounts on a B&O is not necessarily a good idea at the moment. Anyone who bought a first generation BV7 has a beautiful product but with an inferior picture performance to today's 2-3k high street Flat screen. Sound quality is a different matter as is connectivity. B&O really win out here.

Overall B&O have lost their competitive edge: good looks with excellent tech. At the moment it seems to be good looks only. My feeling is that the share price reflects the market's understanding of this and the CEO has been punished as a result.

One thing that has come out of this thread is that people remain very passionate about Bang.  This is sensational!  It is a company and product that inspires passion and something people get very emational about. But we must remain mindful that the decisions that have been made by Bang are not by one person - Torben.  They are calculated with many menbers of staff involved and many executives who weigh up these decisions. They are not considered lightly.

 Bang & Olufsen is one of the only electronic companys on this planet to remain profitable. Keep this in mind.

It appears Torbens departure has been unexpected, and sometimes these decisions themselvesn are fraught with complexity that we simply do not see and are not always totally product related.  Keep this in mind.

AT:

Alex:

But then its all about design again. Or not ? 

Good point.

IMHO currently B&O mostly want to sell their products only by the design, and that's the problem: It's not enough.

A B&O must be an artwork.

For me, it means not just a good design, but a real timeless design, and also a technological perfection. IMHO  You also must feel, that it was DREAMED by a genius, by a master of perfection.  A dream come true... Take a look on a Beocenter 9500, a Beocenter 9000, a Beocenter 2300 - You can really feel it. Even without a name on it, You will know, they are B&O.

They are truly artworks. You can put them to even a brand new luxury home, but You can put it into a royal castle right between a Leonardo and a Raffaello painting. And You will feel, that's absolutely ok - the only minor thing will be the question: why do You need the paintings? The true artwork is made by B&O... ;) 

They are perfect, they are truly timeless products.  

Do You feel this with a product, which is only labelled as B&O?

I agree with this. I have a 9300 w/BL8000's. When I look at the current product lineup I do not have that feeling. The wow factor of the 9300 touch panel, the link system ability, the 8000s were magic. There are no more products in the current B&O lineup I want, except a BL2, although I don't really want to look at it, just hear it. An 8000 mk III  that sounds the same a BL5 would be what I really want but they don't have that. I like my Beo4 (but two-way would be nicer) and I like our Beocom 1 phone. 

From B&O I would like to see-

- products that are magical

- prices that are reasonable- I can pay for a worker in Denmark (who is on his toes though!) and top-rate materials, but just raising the price of something to make it "special" is nonsense 

I would not worry too much about Mr. Ballegaard.  Since August of 2005 he exercised stock options and cash settlements from stock options for over 1,500,000. euros.  From the http://www.bang-olufsen.com/page.asp?id=101 insider trading.

President, CEO, Torben Ballegaard Sørensen has requested a cash settlement of options 

previously awarded. The cash settlement amounts to 8,562,400 DKK.  

Torben Ballegaard Sørensen has previously been awarded 35,000 options, which entit- 

led him to purchase 35,000 shares at a share price of 360. The cash settlement has been 

carried out based on a share price of 604.64, which corresponds to the average trading 

price for Bang & Olufsen a/s’ B-shares, on the Copenhagen Stock Exchange for the pre- 

vious 4 trading days.  

Name Torben Ballegaard Sørensen 

Reason President, CEO, in compliance with article 28a 

(2.1.) of the Danish Securities Trading Act  

Issuer Bang & Olufsen a/s 

ISIN DK0010218429 

Designation Shares 

Nature of Transaction Purchase (Execution of options) 

Trading Date 15th of August 2005 

Market Copenhagen Stock Exchange  

Number 10.000 

Market price (DKK) 2.010.000,00  

Name Torben Ballegaard Sørensen 

Reason President, CEO, in compliance with article 28a 

(2.1.) of the Danish Securities Trading Act  

Issuer Bang & Olufsen a/s 

ISIN DK0010218429 

Designation Shares 

Nature of Transaction Sale 

Trading Date 15th of August 2005 

Market Copenhagen Stock Exchange  

Number 10.000 

Market price (DKK) 4.731.000,00 

There was an interview with the chairman for B&O, Jørgen Worning, in the Danish paper Politiken today. Very interesting reading, the journalist really gives the chairman the knife, he almost gets mad at the journalist. The chairman says that there haven't been enough focus on the audio/video section of the firm, and he calls the automotive section for a "project with a slow horizont", probably meaning that he does not think it will pay off to produce sound systems to audi, aston aso (I disagree).

read it (if you know Danish and subscribe to politiken...)

br.

Christian

-------------------------------------------------

Overall B&O have lost their competitive edge: good looks with excellent tech. At the moment it seems to be good looks only.

--------------------------------------------------- 

This is it! 

You can't demand the same prices as years before while moving production to China or Eastern Europe. As many of us can see the products just DO NOT have the old quality and I just hope that they have enough intelligence in Denmark to see this and to keep production in Denmark. 

If not it's the same as BOSE: Now "Made in China" with lousy qualtiy and ONLY high prices, nothing else!

And don't argue "oh we have to be profitable etc.!" Have a look at the german company "T + A". They even write in their adds that it is made in their home country and this is what people who want to spend some serious money WANT to have!

"Made in China" is availabe in every supermarket etc. So why should I buy B&O anymore when they do the same?

TWG:

-------------------------------------------------

Overall B&O have lost their competitive edge: good looks with excellent tech. At the moment it seems to be good looks only.

--------------------------------------------------- 

 

This is it! 

You can't demand the same prices as years before while moving production to China or Eastern Europe. As many of us can see the products just DO NOT have the old quality and I just hope that they have enough intelligence in Denmark to see this and to keep production in Denmark. 

 

If not it's the same as BOSE: Now "Made in China" with lousy qualtiy and ONLY high prices, nothing else!

And don't argue "oh we have to be profitable etc.!" Have a look at the german company "T + A". They even write in their adds that it is made in their home country and this is what people who want to spend some serious money WANT to have!

"Made in China" is availabe in every supermarket etc. So why should I buy B&O anymore when they do the same?

Regardless of ones views on Chinese manufacturing, every major high end brand is now sourcing from China to some extent. One very high end brand has plans to move some product manufacturing wholescale to China.

The notion that one can develop high end, high tech products that look good and will de updated on a regular basis from a manufacturing base in Denmark where the costs are sky high is im afraid, a dream; when one looks at the world stage im amazed that individuals can think otherwise.

The company has already proved that it cant deliver that so i fail to understand why individuals think it is capable of it- past glories perhaps- in a far far different world from now im afraid.

What people with serious money want to have is a top quality product with high design and high price- thats package is unnobtainable by wholescale manufacture in Denmark. You can demand the same prices for products made in the Far East if the quality is as good, the technology is better and the products up to date.

Clearly you dont like bose, and i dont either but the quality now is no worse than it used to be and they are still in business- which I doubt BnO with present policies

I never understood why B&O kept it's prices so unrealistic high when they moved a lot of the production to an eastern-europe country.

Ik was expecting a huge price-fall.

I am sure if they don't lower the prices of their plasma and LCD televisions that it will be over very soon.

Bingo:

I never understood why B&O kept it's prices so unrealistic high when they moved a lot of the production to an eastern-europe country.

Ik was expecting a huge price-fall.

I think you've answered your own point: B&O realised that they could increase their profit margin further by moving to an Eastern European manufacturing plant. Their intention wasn't to suddenly reduce prices, it was to keep their existing portfolio and prices and increase their profit

Why? Well, why change a good thing. Up until fairly recently, B&O were on target. Also, only we know about this Czech plant. How many regular and average B&O customers will know any difference? Very few. So, if they can increase profit, and hope no-one notices, then why not?

I don't think this is their 'problem'. I'm sure that the Czech-based manufacturing is up to the required standards, or why would they risk moving across?

The problem is that the prices are too high for the technology you receive in return. The BL3, 9 and 5 are worth the investment, but few other B&O products - in 2008 - are really worth the investment. It doesn't matter where you manufacture the goods, but the average customer can't figure how a 'quality' product such as a Sony TV (remember, in the UK at least, Sony still is regarded as a quality brand) is on-sale at John Lewis for £500, yet the same size TV is on-sale a B&O for £6.5K. I wouldn't like to be the B&O sales person who has to explain the difference, which is why some sales staff are becoming a little disillusioned.

TWG:

You can't demand the same prices as years before while moving production to China or Eastern Europe. As many of us can see the products just DO NOT have the old quality and I just hope that they have enough intelligence in Denmark to see this and to keep production in Denmark. 

If not it's the same as BOSE: Now "Made in China" with lousy qualtiy and ONLY high prices, nothing else! And don't argue "oh we have to be profitable etc.!" Have a look at the german company "T + A". They even write in their adds that it is made in their home country and this is what people who want to spend some serious money WANT to have!

"Made in China" is availabe in every supermarket etc. So why should I buy B&O anymore when they do the same?

Mr10Percent:

I used to listen to football fans harp on about black and foreign plays here in the UK. The answer is simple. They were better than the rest of us and wanted less for doing more.

 

Are you sure? Drogba, Essien, Anelka (world's most expensive transferred player) aren't exactly cheap. Ravenelli was our most expensive player by far (on £48K per week, back in 1997) and Emerson constantly went AWOL. It's being argued that Alves - who is supposed to be on his way to Boro - is using us only as we've offered him a staggering £20m over 4 years. Fred wants a £600,000 'signing on fee' on top of his £12m transfer.

Are you sure they want less?

Back to B&O - yes, the BV7-40 surely has superior sound distribution. The snag is, most people now live in apartments, so the visual aspects are more relevant to the audio, for most. Just an example.

I dissagree with that. In the time of the LX2800, a top A brand television costed around 1500 euro and the LX about 1800 euro

Now a A brand 50 inch TOP plasma cost around 2500 euro (full HD Panasonic) i expect even a lower price this year.

And B&O charges at least around 13000 euro more for a 50 inch plasma. 4 HDMI inputs will become the standard by Panasonic, Pioneer and other so also there is the Beosystem 3 not unique in anymore.

Picture quality? Pioneer Kuro is really better. So why would people understand the price difference. More and more people don't and they are damn right!!!