Looking back I find it hard to pinpoint when this all started. There have always been premium products at price points way beyond my means. But I have a sense that at some point in the last year or two the general price development of the “state of the art” has transitioned from a polynomial function to an exponential one. It seems (to me at least) that all of a sudden prices are not just increasing in line with inflation, or even slightly faster than inflation, but that prices have started (at least) doubling between each generation. I feel we are witnessing some kind of “cost of listening crisis”.
Recent examples include:
The Taiko Olympus, €86,200 (c.f. Taiko Extreme €28,000 iirc)
The WADAX Reference server $64,900 and DAC $166,420
And last but by no means least(!) the Sonus Faber Suprema at $750,000 (c.f. The Sonus Faber SE @ $250,000) priced, no doubt, to ‘compete with’ (i.e. surpass) other ‘summit-fi’ offerings such as the Magico M9 or YG VX3.
Just think about that for a second. The price increase between the two latest generations of the state of the art from Sonus Faber is greater than the sum of all price increases between all previous generations ever. More than 2x greater! Wow.
It is very hard to believe that any of this is justified by any fundamental macroeconomic forces (wage inflation, energy inflation, raw materials inflation, semiconductor inflation, post-COVID supply chain disruption etc.) so what is going on?
I can understand that manufacturers are seeking shelter in the least interest-rate sensitive end of the market. But as well as being beyond the reach of the “audiophile middle-class”, that must surely account for the majority of their sales, are these manufacturers not at considerable risk of alienating their core customer base? Pushing forward the state of the art is one thing, but isn’t this pushing ‘greedflation’ a bit too far?
I have had a number of conversations with manufacturers and with dealers having particularly high end clients over the past years.
I think that the important thing is to understand that the market for audio products has expanded from one limited to substantially technically aware audio enthusiasts to a very wealthy luxury goods one whose members’ motivation is just to own the best,as expressed by price, be it watches, cars, property, yachts , artworks etc. Expertise ,particular knowledge or even interest, is not the object of the game. Physical manifestations of wealth and power are.
In regard to knowledge or even interest a dealer told me that I would be appalled at the number of his clients who would buy systems at the top price and lose interest leaving them as dust gatherers after a few weeks. Manufacturers of very expensive high end equipment have told me that their dealers in certain geographic markets have complained to them that their products were not expensive enough as competitors had come out with out at a higher price and they can no longer sell unless that manufacturer can up the price to reclaim its position as the most expensive there is - irrespective of any technical improvement.
Manufacturers know that to serve those markets it is essential to keep up the “arms race” of price. This has bred the luxury audio goods market which didn’t exist 30 or so years ago and is partly why very expensive product cases and product finishes exist. Manufacturers need to do this to stay in business.
As I have mentioned before, dCS could put the Vivaldi in a folded steel case sprayed back. It would cost quite a bit less ( though still be costly compared to entry level items). Nobody would buy it.
Have a look at the online magazine Mono & Stereo. It usually carries news of top end audio installations from a price range beyond most of us reading here ( and to the average “civilian” we are spending crazy money). Note where these installations are. Not in Europe or North America.
So, firstly , these very expensive units do not necessarily have to offer much actual sonic improvement. Actual meaning clearly audible. Secondly, they are not aimed at ( most of) us anyway.
If one can share the listening experience with other members of the household then paying as much as for a BMW 5 Series for a two channel hifi setup is fine IMO. Paying as much as for a Daytona SP3 is pure luxury.
I picked up the first Utopia22 at a 1,000 € trade-in promo and picked up a second one brand new recently because a dealer had to clear some inventory for working capital. The average cost for each worked out to 3,700 € which was a no-brainer for this headphone. If two people listen to the Lina stack with good enough cables at the same time, the price of the Lina is reasonable for the enjoyment it provides, IMO.
For a two channel system I’d rather use an equalizer or room correction system than spend huge sums on gear and fixing the acoustics of the room, I decided. I wouldn’t cut corners on the cables, though, but wouldn’t go beyond Cardas Clear Beyond.
I would! I’d buy it, and I’d love listening to it! My to biggest criticisms of Hi Fi components are 1) they are too large and b) and most are aestheticly challenged. I’d much rather hide most ancillary gear in a cabinet. I like the look of Harbeth speakers and the original Sonus Faber Snail, there is something special about the historical JA Michell turntables. Not much else does it for me. I expect i’m in the extreme minority though.
Other than the Tiffany lamp all we see in the iconic pic of Steve Jobs’s man cave is his bigrig comprising:
Michell Gyrodec Mk I
Threshold FET-One Pre
Threshold STASIS-1 Power
Denon TU-750s Tuner(!)
Acoustat Monitor 3 Speakers
Oh, and the three identifiable albums in the photo are: Bach Brandenberg Concertos (Jean-Pierre Rampal, Maurice André; RCA), Ella Fitzgerald: The Cole Porter Songbook (Vol. 1, Verve) and Steely Dan’s Aja (ABC).
Good points Pete. I reflect on a couple of wisdoms of my countryman Ingvar Kamprad, founder of IKEA, one referring to the supply side of this equation and one to the demand side:
To design a desk with may cost $1000 is easy for a furniture designer, but to design a functional and good desk that shall cost $50 can only be done by the very best.
I could regularly travel first class, but having money in abundance doesn’t seem like a good reason to waste it.
In the dcs forum, we are scrutinizing the pricing of exceptionally expensive products. We believe that items such as the Taiko Olympus and the WADAX Reference server have reached absurdly high price points. Meanwhile, at ASR, all dCS products are perceived as extremely expensive, with even the Bartók considered to be absurdly priced. This highlights the varying perspectives on this issue.
They should create an upper ‘bling’ tier where everything possible inside and outside of the product is made of pure gold, which should easily push the price up to stratospheric levels.
At which point there could be a level ‘down’ for us mortals who have to live with horrific substances such as aluminium and copper costing a fraction of the price. Everyone’s happy!
I’m now thinking of creating a business that sells gold-plated music servers…
Isnt it just lookin* at the top of the market from a few years back (2016) where the wilson masterchronosonics at 685k plus subs and the dagostino relentless monos at 275k a pair (2018) were alone?
OK, I somehow missed those. Maybe this is indeed not such a recent phenomenon as I thought.
Agreed, but traditional luxury goods (jewellery, fashion, cars, watches etc.) are very visible, flauntable status symbols. I would have thought a “wall of sound” like the Kharma Grand Enigma is more likely to have most people rolling their eyes. I guess what I missed, and which Pete’s post captures nicely is that high end audio seems to have become a luxury goods category with a market that likely includes or even relies on hyper-wealthy customers who don’t care much about musical reproduction whatsoever.
While I don’t disagree with yours/Pete’s view, looking at it from a manufacturer’s point of view, there’s significant value in developing products that are absolute state-of-the-art/money-no-object because of the learnings it can generate that can eventually trickle down to more affordable gear.
How those products are then priced and launched into the market varies; some manufacturers may decide to amortize the associated R&D costs across large sales-volumes/future-products and price them reasonably. Some don’t.
Absolutely, I am just struck by the difference in magnitude of the hike from ‘The Sonus Faber SE’ ($250k) and the Sonus Faber Suprema ($750k), i.e. $500k or 200% vs that from the Sonus Faber Aida ($120k) to ‘The Sonus Faber’ ($200k), $80k or 66%. The time between the releases was similar, was the R&D effort on the Supremes really six times greater?
(All prices upon release as best I can determine from Google).
Casting my mind back, that was not really a product in the sense of something you could buy from your dealer but a custom request from the owner along the lines of “build me the best you can”. The product name came later ,I guess when its existence caused Kharma to publicise it as a marketing tool. Incidentally , that was the cost of the speaker(s) but also entailed the building or fitting out a dedicated room for which it was designed at further cost.
That leads me to wonder how many of these products are real production items but are more in the way of concepts for showing at major exhibitions? Something car companies have done for years. Incidentally Sonus Faber have long been involved in the luxury market showing a custom in-car audio system for a Koenisegg supercar at Munich in 2013 I recall.
Yes, similar to the Linn and B&W tie-ups with Aston Martin, Burmester with Bugatti etc. These cases relate to technology actually installed in the cars so examples of a “two-way” halo effect where both brands benefit from association with each other. There are also examples of the “one-way” halo effect, such as Tidal and Bugatti, where Tidal simply uses Bugatti brand imagery (logo, colours, materials) to sprinkle aspirational fairy dust on products that have nothing to do with the marque or the car.
This mirrors the world of “collabs” in fashion, where a pair of Dior Jordans or Louis Vuitton Air Forces for example (both Nike sneakers for anyone wondering) will set you back as much as a higher end Nordost mains cable!
I have one of those upgraded car stereo cars. Its cool but sincerely really doesnt mimic real stereo. Much rather listen to engine noise most of the time anyway. Although i havent actually measured the sound floor in my car i expect the average car isnt much better than 50dbs. That doesnt leave much room for dynamic range however i do believe the porsche panamera has some dual window system to help minimize road noise.
Thats true Pete, but it’s just a question of numbers. That system afforded Kharma the opportunity to strengthen their speaker line on the back of that one sale.
I think you’re not far off in the comparison with “concept models”, like in the automotive industry where concept cars are built to push the envelope on technology and production methodology.
Good point. I find it easy to forget that many of these companies are literally cottage industries and one six- or seven-digit sale can move the dial on their profitability or even be transformational.
