A prickly sense of humour?

I am still thinking wy B&O doesn't behave like the other ultra luxury brands. These are known to be recession proof.

Not sure how many watch that, but I never ever saw B&O on MTV Cribs. But plenty of Bentleys and Ferraris. Many houses did have media installations. I think what one will find looking into these homes is that a/v equipment is always professionally installed without visible cables and such but otherwise normal, non super high end products like Sony/Panasonic/Pioneer.

Would love to learn how many customers are more like me making a decent living and B&O is my way of splurging versus really high income households where money doesn't matter. I think one might find that actual B&O customers that make up the majority of sales are most likely not belonging to that 2nd group and then their pricing model is just wrong. 

I wonder what would have happened if they would sell a BV7 TV at half price. Normally more volume would drive cost down, so margins still might have been OK.

Cheers 

JK 

I was once told by my dealer, that the total number of B&O products (major products i.e. TV’s, audio systems and loudspeakers) was circa 15,000 units per year for the entire UK.

If one could assume the UK constitutes say 10% of the world market of say a guestimated 150,000 units, one can realise that B&O probably makes no more than 150 TV’s, 150 audio products and 150 pairs of loudspeakers per day. Spread that over a lot of models:- There’s 3 to 4 different TV’s (of any meaning “volume” out of the dozen or so models. 3 or 4 audio products, 10 to 12 loudspeaker sets etc.

B&O is not a large volume producer by any sense. A large cottage producer. It probably makes only 50 BV7-40s and 50 BV7-32s per day absolute tops. BV9 is probably no more than a dozen a week! It therefore leads that electronics and components built to B&O specs for B&O are not going to be at the same price level as a similar component made by Sony on a 1000 to 5000 unit a day run. In fact they are probably going to be at almost individual consumer price per component once design, production design, tooling etc.. are all taken into account.

Thus re-aligning there price structure would not necessarily work;

a) they don’t have the capacity unless they build in the Far-East and none of us want that do we? What capacity do they capitalise? 10 fold increase in capacity?, 100 fold? Which lines – TVs, Audio, loudspeaker, all of them?

b) They would not be able to shave sufficient enough margin out of bulk-order component ordering. I doubt the return on investment would pay unless they changed the whole ethos of the company to a mass manufacturer. Then they are like Sony et al – unprofitable.

c) I suspect TBS’s business plan for expansion centred on introducing a wider range of smaller less expensive products (mobiles, MP3 players etc) where they really can make greater margins. They probably don’t make that much on a BV9 despite its high cost. That strategy has been blown out of the water with this years results as they cant keep the costs and one-off introduction costs down.

In terms of marketing and manufacture, I think they are in a pretty difficult situation. They are neither a true luxury brand nor an mainstream electronics company per se. They are somewhere in the middle of the two and that may not necessarily be a good business thing.

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If one could assume the UK constitutes say 10% of the world market of say a guestimated 150,000 units, one can realise that B&O probably makes no more than 150 TV’s

That's a hell of a lot of hand built TVs. I can't believe you say 'no more than..'. That's far more than I had expected. Indeed, I was told a few years ago that they only made a 'handful' of TVs per day! By 'handful', I estimated <30/day.

30 TVs a day or 150TVs a day - Im guessing and probably on the high-side but its not a lot of TVs and yes, they are probably all hand built. It is not however going to be 250 or 500 or 1000 TVs a day.

And the point is, is that the number is sufficineltly low that unit purchase cost of the components is going to be more or less the same whether its 30 or 150. (Im thinking PCBs, panels etc... are going to be bespoke batch ordering etc -i.e. just plain expensive).

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