The Economy.. will hi end audio mfgs lower prices?

When I read these threads, I sometimes get the impression that many don't have a good idea of some of the basic cost/margin structures of consumer electronics goods.

For starters, the cost and market dynamics are very different between mass-market "commodity" products and specialist products. If you read the posts about video products on the Audiogon forums, it's immediately evident that what constitutes "expensive" or "worth the money" is much different in the video world, where virtually ALL products are sold in a mass-market, commodity context.

In hard economic times for a commodity market, what happens is that the larger, stronger companies have more resources to weather the conditions, and they will force the smaller companies out of their markets or out of business, or they will acquire them. This is exactly what happend in the automotive market in the 1930s, and something similar appears to be happening in the flat-panel television market (and its related OEM parts market) today. Consumer prices generally drop (frequently below actual manufacturing cost) as inventory is shed, and as stable companies strategize to force out their less-stable rivals. Just like poker.

But for a specialist, niche product like high-end audio, consumer prices are much more closely tied to actual manufacturing cost, and company survival is more closely tied to sound business management. Manufacturers will go out of business because their products are overpriced or irrelevant, or they fail to adapt to changing levels of demand. But the manufacturing costs will remain largely the same, and the players in a specialty market are WAY too small to really affect this, so the end price to the consumer will change relatively little.

So in a word, no.

a manufacturer who sells components direct, exceeding say $5000, who do not rely upon the sales of their components for the bulk of their disposable income, will probably not lower prices or go out of business.

it is the dealers who will fail and possibly, over time., more products will be sold direct.

the demand for high priced audio gear is relatively inelastic.

don't expect lower prices. in some cases, the mark up is too small for a manufacturer to lower prices.

It isn't the illegals coming in. It's the corporations looking for a higher profit margin by having third world countries making their goods. They get fatter wallets, and we get highere unemployment.

>> 02-18-09: Jvcvcrman08
>> Just to throw in my .02¢
>> This is what happens when you let in
>> way too many illegal`s.
>> ALL of the american jobs are now overseas
>> and yet they still come here.
>> The US needs to deport these people at once!
>> Otherwise the US WILL crumble and fall.
>> And DON`T think for one second that 3rd.
>> world countries, like China will help us out!
>> This is ALL Bill Clinton`s FAULT!
>> Get rid of NAFTA!
>> And stop importing goods from China!
>> And then you can stop shipping jobs overseas,
>> and THEN Americans WILL have jobs again, and then
>> the the economy will grow once again!
>> THIS IS THE ONLY WAY OUT OF THIS MESS!

Funny you should say this!
Your system picture shows all Japanese gear (Sony)!!
Not 1 piece of all-American gear!
It says your speakers are Infinity (American) but I cannot see a pix of it.

When I first started looking at the Naim CDX2 it was $5600.00, it went up to 6150.00 and more recently back to 5600.00. Sonus Faber just had a sale of speakers. I think that there will be a reshuffling of prices in some areas and consumers will be more carefull about their purchases.