Is it possible for a high end manufacturer to overprice their goods?


Having just read the interesting and hyperbole laden review by RH of the new Rockport Orion speakers in the latest issue of The Absolute Sound, one thing struck me..

is it possible in the high end for a manufacturer to overprice their product ( doesn’t have to be a speaker, but this example comes to mind)? I ask this, as the Orion is priced at $133k! Yes,a price that would probably make 99% of hobbyists squirm. Yet, the speaker now joins a number of competitors that are in the $100k realm. 
To that, this particular speaker stands just 50.3” tall and is just 14.3” wide…with one 13” woofer, one 7” midrange and a 1.25” beryllium dome ( which these days is nothing special at all…and could potentially lead to the nasties of beryllium bite).

The question is…given this speakers design and parts, which may or may not be SOTA, is it possible that this is just another overpriced product that will not sell, or is it like others, correctly priced for its target market? Thoughts…

128x128daveyf

Hilde45,

In a word, yes. That is what freedom, free will, and free markets are all about. I'd ask you what we should be allowed to spend on speakers, but maybe we should keep the moral and political discussions on Twitter, not an audio hobbiest website. 

"Bottom line: If you look at only the material cost and direct labor part of a $133k pair of speakers, you will find the speakers over priced."

This is a problem I and others have had with what we consider trolls on Audiogon. They quote the cost of materials and direct labor-so what? There are many other significant costs associated with equipment, particularly electronics and speakers which result in high costs relative to sales price/margins. The tweaks and cabling are where the margins can be huge and can be highly profitable. R&D generally costs the most to make a successful (sonically and economically) tweak. An SR Master Fuse at $595 sales price costs almost nothing to manufacturer but the R&D and/or luck created a masterpiece Fuse. A $22 Acme Fuse is absolutely a bargain compared to a stock 50 cent fuse. The margins are great but the results can also be great (Fuses saved my EAR 864 from resale as well as my Emotiva XDA-1 highly modified/upgraded DAC). I am neither poor nor very wealthy but at the cost of a "high-priced" tweak with high margins, I improved my system much more than paying for an equipment upgrade.

Again, will anyone address the potential problem of obsolescence/inability to repair due to a manufacturer’s bankruptcy?

P.S. I can afford an EAR 912 and already own(ed0 a $9K DAC (COS Engineering  D1v) and have a $150K listening room but chose musically more satisfying equipment regardless of price.

Daveyf,

interesting I got into speakers around 2002 in college and things were already pretty expensive. The Wilson Sophia came out and I think it was around $12k at least by the time I noticed it.
 

Interestingly as I have made more and more money in my adult life speakers just keep going up equally. By the time I was ready to buy Wilsons from both an interest and from an income standpoint they were on the Sophia 3 and it was $16,700, unless you wanted a different color then it was somehow $19,000???  Then today the Yvette (Sophia successor) is what $28k. So compared to my first engineering job out of school I make 2.6 times more now and Wilson have gone up 2.3 times in price. 
 

it is all pretty crazy to think about. I blame suckers who buy over priced stuff without a proper A/B test. I have no problem with people spending any amount of their money on anything but I don’t believe a lot of things are actually better and are just different. 

 I'd ask you what we should be allowed to spend on speakers, but maybe we should keep the moral and political discussions on Twitter, not an audio hobbiest website.

Sorry to let morality exceed it's appropriate boundaries. We must keep morality contained, or it might take hold. 

Good discussion, guys.

To the OP’s point, I think the answer is "yes" that high end manufacturers CAN overprice their goods. In the cost/performance metric of mere mortals (like us) the math just doesn’t work. And we feel a bit frustrated when folks inject their own value component into the mix that is clearly above our paygrades -- and didn’t ask OUR opinion about whether the sonic (or otherwise) value is there. How dare they!!

"Messaging" is an important element and could negatively impact current and future hobbyists. The question becomes WHERE are those messages being placed and HOW are they effected by them? Or is it just "noise."

I sold decent Hi-fi gear for decades. We had a speaker line whose market positioning statement included “owning 50% market share of speakers over $10k a pair.” When presenting this to customers, the vast majority were shocked that there were speakers over $10k a pair on the market. After allowing them a few seconds to "recover", I’d inject: "You’d be surprised by the number of speakers out there over $100k a pair." The point here is there are still virgin ears out there who can be introduced (properly) to high performance audio -- with an emphasis on sound-for-the-buck.

As @hilde45  suggested: "We must keep morality contained, or it might take hold."

I think there may be a valid (and, useful) point here that, perhaps, we have a higher purpose than being “audiophiles” in the grand scheme of things. I’m sure, more than once, someone (knowing our obsession with high performance audio) has asked our opinions. We’ve straightened people out more than once. Sometimes avoiding disaster (or divorce?). A helping hand (and, brain) can go a long way in separating “noise” from useful information, fact from fiction. As one professional contributor stated (I’m paraphrasing): “A high resolution audio system can be bought for under $5k.”. I agree with that statement provided the person can keep their ego in check.

I’ve spent quite a bit of time identifying elements that connect us and developed some materials to help illustrate the relative group size vs our level of intimacy. We, in this forum, fall into the “Shared Indulgences” group where we share things we are passionate about (music and the stuff that makes it happen). Above that group is a smaller (and, more intimate group) I refer to as “Purposeful Bonds” where there is some level of higher purpose in what we are doing. As you can see, there is the aspect of migration UP where some may seek a higher, more purposeful (and, yes, more ethical) involvement. Above that level is “Heartstrings” where deep friendships can develop as a result, and we become like family. The group below “us” (speaking purely of involvement in audio, not intellectually or other component) is the “Navigating Complexity” group. So, they are there just like us moving about trying to get things done when, all of sudden, we discover we share an interest. So, up the ladder we go. Or, not?

Here’s the link, if you want to check it out. You’ll need to scroll near the bottom to get to the pyramid.

https://youniteusa.com/connections

It’s also been said that "people spend money on what their attention is on." So, keeping this group and it’s influences on high performance audio helps insure the health of the industry -- and, the hobby.