There are many assumptions or assertions buried in the original question and several replies. First, the DAC chip is a small part of the cost of a DAC, and in the case of the R2R Schiits, know that they had to do a bunch of custom work to use those AD DACs since they are designed for instrumentation and therefore glitch. Engineering is expensive.
next, for those who think most high end is just marked up a lot - reality check. This industry sucks financially. yep, manufacturers can charge what the market will bear, but the market won't bear much. Why? Lots of people want to be in the business and try their hand at design. When supply rises, prices and markups fall. That’s the invisible hand at work. Want to make money? get into something like cement. Nobody finds it romantic.
The cost of almost any piece of electronic gear (speakers, aka furniture are similar but different at the same time) is driven by, in rough order:
R&D is a slower and more prototype-intensive process than most since measurements only take you so far in high end.
An aside, I’m beginning my DAC journey. I have three very early prototypes running. All use very different DAC chipsets. And yet, i have managed to make them sound fairly similar with the characteristics i always strive for. Lesson: the DAC is not the determining factor. Not saying I’m happy with any of these designs - they are are early days. I'm only saying that different chips wind up sounding the same when similar engineering recipes are applies to them.
In DACs you will find (or ought to!) multiple power supplies, and lots of money spend to contain and reduce noise - ground noise, radiated noise, reconstruction noise, blah, blah. Costly clocks and multiple series timing circuits. Isolation efforts between stages. A few dollars her and there add up.
G
next, for those who think most high end is just marked up a lot - reality check. This industry sucks financially. yep, manufacturers can charge what the market will bear, but the market won't bear much. Why? Lots of people want to be in the business and try their hand at design. When supply rises, prices and markups fall. That’s the invisible hand at work. Want to make money? get into something like cement. Nobody finds it romantic.
The cost of almost any piece of electronic gear (speakers, aka furniture are similar but different at the same time) is driven by, in rough order:
- The chassis
- The transformer(s)
- The jacks and other switchgear/hardware
- The box you ship it in
- Warranty costs, made worse if one wishes to accommodate user error, which is common. Sometimes user error seems mandatory.
- The custom PCBs, especially if large
- And then a few bucks for the various electronic components, even when quality stuff is being used
R&D is a slower and more prototype-intensive process than most since measurements only take you so far in high end.
An aside, I’m beginning my DAC journey. I have three very early prototypes running. All use very different DAC chipsets. And yet, i have managed to make them sound fairly similar with the characteristics i always strive for. Lesson: the DAC is not the determining factor. Not saying I’m happy with any of these designs - they are are early days. I'm only saying that different chips wind up sounding the same when similar engineering recipes are applies to them.
In DACs you will find (or ought to!) multiple power supplies, and lots of money spend to contain and reduce noise - ground noise, radiated noise, reconstruction noise, blah, blah. Costly clocks and multiple series timing circuits. Isolation efforts between stages. A few dollars her and there add up.
G