The B&O problem?

180 replies
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This morning I was looking in to the window of a local TV shop here in Spain and side by side were two sets. One a 46" Leowe and the other a 46" Panasonic. Now whilst I concede the Leowe ,which was in white, looked a little more 'designer' to my eyes, it was €3000 more than the Panasonic. Standing there I tried to put myself into the mind of a potential customer.  Unless I was a customer intending for the Leowe to be connected to further Leowe products, I must say I couldn't see why I would ever be tempted to pay all this extra money, compared to the Panasonic and for a TV which in all likelihood would be 'out of date' in technology terms in little more than a year or so.  

Last week I was taking to my son-in-law who told me he was going out that day to buy a new Samsung 46" TV to replace his Sony Plasma. Somewhat tongue in cheek I said to him "have you thought about Bang & Olufsen, they look fabulous and will last you for years?" (he has owned a B&O TV). After he had stopped laughing (honestly) he told me he was already expecting to have to replace the new Samung in the next 1 to 2 years, so what was the point.

Just a couple of tales which, in my opinion, illustrates the modern day dilemma for B&O to be able sell to those other than the quite or very wealthy which was not the case in the past.

Of course, I fully accept that this may be their marketing strategy and which may prove to be successful and profitable.    

The price issue is an eternal theme on this forum. I guess you can look at it from different point of views - you can acknowledge the fact that a BeoVision customer will replace her set less often than a regular highstreet customer and you can acknowledge the fact that you can actually trade in your used BeoVision later on.

But, as with cars, you can focus only on the number of wheels or fuel consumption. Not all do, which I guess Aston Martin is quite happy with. How can you justify a Mercedes over a Ford, as engine technology and gadgets take a quantum jump every five years or so?

Roger

All the more reason that B&O better be Very sensitive to this enthusiast customer base.  Start with a config tool for users of Beo 5.

Next, better communication.

Barry

I agree with some of the points you make Roger, but the car analogy doesn't quite stack up. I drive a Jaguar XJ6, which is now a number of years old. In style, ride and performance terms it is little different than the latest model, other than the body of the latest car being made of aluminum rather than steel, a slight re-style and the inclusion now of more electronic 'gadgets' within it. In its basic function however, it is still up there with the best.

The primary function of a TV set is to display a TV picture. Period.

Sound, build and style are of course very important also and any price premium should reflect superiority in all the above qualities. Leaving aside the question of whether a B&O set does or does not produce a superior picture than some competitors, if, for the purpose of argument, it does at the moment, that is not much consolation if in a year or so's time, in this one respect, it finds itself behind the best of the 'competition'.  

I realise however I am on somewhat sticky ground combining 'build quality' and Jaguars of previous years in the same posting!

😕 

 

I think it will be interesting to review this post in say 12 and 24 months time with the current world-wide economic turndown:-

That companies that produce flat-screen TVs weren't making any money in 2007/8 certainly wont be doing so now and at least in 2009 and probably later. There will be less general demand.

Will this anticipated lack of demand stifle LCD and Plasma development as more people make do with their "budget" sets for longer?

Will a flat screen which was typically current for 6 months now be current for 12, 24 or 36 months as loss making screen manufacturers reduce R&D and cut volume?

B&O will be by no means immune but may fare significantly better (profitable, large margin, can cut production/R&D easily and cheaply) or will they suffer more than most (small company / high overheads / luxury segment electronics).

I guess the proper question is - although the rate that flat screens have developed technologically-wise is real, is the price that is charged sustainable for these large companies to sustain their market share when they no longer have volume to shore-up their costs - never mind profit?

10%

 

 

After a long hiatus, I thought I'd wade back in. 

I think Mr. 10%'s point is a very interesting one. I wonder if it's an issue of prolonged economic success that lead people to such fickle purchasing habits. It's amazing that people purchase flat panel TVs (which are only now beginning to come down to where tube televisions were when plasmas first came on the market) with the intention of taking them out to the curb in a few years. Isn't $1,000 still $1,000? 

I think that too many people confuse making an investment with eternal youth. I can't think of anything, save maybe a diamond, that isn't made somewhat obsolete by objects that succeed it. Better materials, better form factors, better performance, and more "up to date" styling will eventually make nearly any item objectively inferior. The point of an investment is not always to retain a monetary value or a technological or cultural currency, but to acquire something that brings you some joy or satisfaction. A nice watch, a bottle of wine to drink on a future anniversary, an automobile, or even a television can bring someone immeasurable joy while being simultaneously impractical in other ways.

If I count all of the electronics through the ages that have engaged me in some way or even momentarily arrested my attention it would be an exclusive list. A Brionvega tv and radio, a Tivoli Model 1, a MacBook Air, and the original iPod are a few, but I genuinely can't think of as many non-Bang & Olufsen products as we have in our current portfolio let alone the past generations still dutifully serving in homes around the world. 

I guess what I'm saying is that I like us the way we are! We're fussy and always a few steps behind. But I'll be damned if 90% of what we build isn't worthy of a place in a museum. The collection I've amassed brings me as much joy as a wine cellar or a Bugatti in the garage so why on earth would I want my beloved company to become another Samsung just so a few more people could afford the brand!? If we listened to the complaints on this board, even the majority ones, you wouldn't want us anymore. I know I wouldn't. 

Well said Trip and welcome back. I hope all is well or at least better?
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Alex and myself were a little short-handed defending the BS5 over the last couple of weeks.
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I'm sure you can colour it up a little now you are back? The water is lovely and warm!
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10%
Good to be back! If the BeoSound 5 thread rears its head again, I'll be sure to dive in. 

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