Why Did You Drop the Max Line?

[BigEat]

I'm wondering why Headroom dropped the "Max" line. Cost? Low Sales? Etc. I've always thought every maker needed a flagship even if you carry no inventory, and build on special order. I'm sorry to see it go. Will their be some sort of replacement? Particularly in balanced configuration?

[TheSloth]

I never used to say this, but the Max line was basically no different to the Home line in performance. In fact I'd go as far as to say that no-one would be able to tell the difference between a Max and Home with the same electronics and/or DAC.

The real mystery for me is therefore why they killed the Balanced Home, and I'm sure we'll find a logical answer soon!

[BigEat]

Originally Posted by TheSloth

I never used to say this, but the Max line was basically no different to the Home line in performance. In fact I'd go as far as to say that no-one would be able to tell the difference between a Max and Home with the same electronics and/or DAC.

The real mystery for me is therefore why they killed the Balanced Home, and I'm sure we'll find a logical answer soon!

Great point. I'm a big Headroom fan, but I think they took their eye off the ball a bit on the whole audiophile desktop line. I'm concerned that it has stretched capacity for research an development on the core business and that the purist headphone line wll suffer or has suffered. If Headroom were a public company and I were an analyst I would worry about the breadth of the product offering etc. I'll downgrade from a "Buy" to a "Hold Long Term".

[Duggeh]

You think that because they managed to squeeze a huge amount of the performance of the flagship line into the new desktop line that they've taken their eye OFF the ball? You're nuts. Headroom has made more performance available to more people for less money and in less space. When they do eventually (and there will be one, but I really would not hold my breath) release their new statement model. Expect it to raise the bar again.

[TheSloth]

Originally Posted by BigEat

Great point. I'm a big Headroom fan, but I think they took their eye off the ball a bit on the whole audiophile desktop line. I'm concerned that it has stretched capacity for research an development on the core business and that the purist headphone line wll suffer or has suffered. If Headroom were a public company and I were an analyst I would worry about the breadth of the product offering etc. I'll downgrade from a "Buy" to a "Hold Long Term".

Remember what people said about the iPod when it was released? That had apparently nothing to do with Apple's core business, yet 7 years later their core business is better in every way because of it. Not trying to compare the Audiophile Desktop to the iPod, but sometimes the best way to help your core market is to make something somewhat outside of it.

As far as their core business is concerned, I can assure you they are working their butts off on some very ambitious projects in terms of Headphone amplification and sources, it's just that they are more complicated and have a longer R&D/lead time than products like the Audiophile desktop which, if you consider that relatively little original design had to go into the amps either in terms of the enclosure or electronics (no criticism intended) are easy to make and spread the brand name well.

I'm not worried...

[BigEat]

Originally Posted by Duggeh

You think that because they managed to squeeze a huge amount of the performance of the flagship line into the new desktop line that they've taken their eye OFF the ball? You're nuts. Headroom has made more performance available to more people for less money and in less space. When they do eventually (and there will be one, but I really would not hold my breath) release their new statement model. Expect it to raise the bar again.

From your over reaction and the somewhat personal nature of your response, I'll assume you missed the point, or have a keen lack of experience in finance or marketing or both.

But, to make the comparison easier to understand, I'm suggesting that if the cut-back in headphone amplifiers came at the expense of promoting the so-called desktop audiophile line, that would be a bit like Apple introducing Apple TV at the expense of reducing their Macbook line. You're own observation sort of proves my point. Your statement that "When they do eventually....and I wouldn't hold my breath" is in fact my point. I'm suggesting that had they avoided the migration into the destop line etc., they could have used the same money for either new high end headphone amplifiers, or even further to your point, a wider array of affordable headphone amplifiers. Or, a wider array headphones themselves. Headroom, in this market, has limits on finance, borrowing capability and carrying cost on their inventory. I admittedly don't know what any of those are, but if it means reducing products in their historical line of business, that's a concern if I'm an investor, stakeholder etc.

On the other hand, I'm sure Tyll has pressures to grow the business, seek new product lines etc., just like Apple and just like any company. That's not to say that the desktop line of products aren't good, don't sound great, don't represent good value. And maybe they've sold so well that it justified discontinuing some of the lower selling headphone amps. I hope that's the case cause I love Headroom too, and I would suggest that Headroom is in a way the anchor tenant of this entire hobby, this website and to some degree, this business. That's why any perception of a crack in the amour is a bit of a concern. But, if Headroom were public, and I'm glad they aren't their CFO I suspect would have some tough questions to answer in an analysts call.

[BigEat]

Originally Posted by TheSloth

Remember what people said about the iPod when it was released? That had apparently nothing to do with Apple's core business, yet 7 years later their core business is better in every way because of it. Not trying to compare the Audiophile Desktop to the iPod, but sometimes the best way to help your core market is to make something somewhat outside of it.

As far as their core business is concerned, I can assure you they are working their butts off on some very ambitious projects in terms of Headphone amplification and sources, it's just that they are more complicated and have a longer R&D/lead time than products like the Audiophile desktop which, if you consider that relatively little original design had to go into the amps either in terms of the enclosure or electronics (no criticism intended) are easy to make and spread the brand name well.

I'm not worried...

This is actually becoming a very interesting. Your point about the iPod is a great one. In a response above, I used the example of Apple TV. Fascinating how perspectives differ, I hope we are all right.

[grawk]

I think the appletv isn't done yet, it's just ahead of the curve. The appletv is for me the most exciting thing to happen in home entertainment systems in a LONG time. I can't wait til it gets the next iteration.

[BigEat]

Originally Posted by grawk

I think the appletv isn't done yet, it's just ahead of the curve. The appletv is for me the most exciting thing to happen in home entertainment systems in a LONG time. I can't wait til it gets the next iteration.

The Apple TV may be fine, or great, will be great. All of the above. But when it was introduced, it was a new line for Apple, and Apple didn't reduce its computer offerings...in fact, they expanded them (Macbook Air etc.).

[JorgeC]

Thanks for all the comments guys! ...

Just wanted to chime in that we do have some very big plans presently underway in our "core" market. Simply stated, our goal is to raise the whole headphone audio performance bar yet again in 2009 with our upcoming HeadRoom goodies...

Stay tuned, ya'll!

Cheers,
Jorge
HR Sales/Product Manager

[Tyll Hertsens]

Originally Posted by BigEat

I'll downgrade from a "Buy" to a "Hold Long Term".

Given the state of the economy, I'd say a 'hold' recommendation is pretty good.

Okay, seriously, great question, let me do you the honor of a serious answer. There are a number of issues here, and I'll address them in brief from an 'outside looking in' point of view, but I'll add there are numerous internal resource management issues, I won't bore you with, that adds various weights to the scale.

Discontinuing the Max and Home. We feel that a statement product isn't of too much use once the statement has been fully made and the technologies therein have been moved to lower cost products. It's now time for us to do a fairly long development project to make the next statement.

This is something we were going to do more in the early 09 time frame, but due to the economy and soft sales in Oct/Nov we took the opportunity to 'cash out' the remaining inventory of Max and Homes in order to finance our Christmas season without tapping our credit line, and to reduce the inventory future labor requirements to support the line in order to enter next year---which is very likely to continue to be economically soft---a little leaner and meaner.

Desktop Audiophile. First, I'll make a little argument that stretching a product line is a good thing: When we introduced the first BlockHead and the concept of balanced amps, there was ZERO demand for such a product as there were ZERO people who had balanced headphones. Well, long story short, that turned out pretty good and today I'd guess at least 10% of our dollar sales are attributable to balanced headphone related products.

The link to the Desktop Audiophile, I would argue, may be more direct. Once you make something like the current Desktop Amp you realize that you've made a promise to customers. The Desktop Amp is---and eventually will be---better called something like a Desktop Preamp. As we struggled to convey all the versatility to customers we found ourselves up against a conceptual wall: people just didn't understand what it does. (I'm not talking about you guys, but about the average audiophile who is savvy about normal audio gear but not about headphone gear.) If you tell someone, "this gizmo is the center of a desktop audio system, well, you've got to show them a desktop audio system someway or another.

Now, here's the tricky bit: We could either spend a whole lot of time slapping people upside the head with a whole bunch of words (which mostly don't get read in an ad) and get them to understand that a Desktop Amp is basically a preamp on your desk, or we could simply show them a picture that made it possible to make some assumptions based on their understanding of big stereo systems.

Show audiophiles this picture:



and they 'get it.'

Then there's the fact as mentioned above, that technically, it was a fairly easy development.

Then there's this little slap of reality: HeadRoom has to continue to grow to at least five times it current size. There are enough audiophiles to support that, but they DON'T LIKE HEADPHONES, they like speakers. You can scream and shout all you want (and I have) but you can't escape that fact. Doing the Audiophile Desktop is a broadening of the brand that allows audiophiles to identify with our products much more strongly.

Lastly, this is important but a bit too complex to go into in any depth, HeadRoom is a bootstrap operation. It is hard as hell to get the wiggle room needed to finance furthering developments. If I had a big wad of cash in my pocket, sure, I'd keep the Max for longer and I'd discontinue it only six months before the introduction of the next flagship. (It's important that there be that time off with the flagship product so you don't piss of recent purchasers.) But I don't, so I can't.

You see, your initial premise is wrong right from the start: HeadRoom is not a vehicle for outside investors. It's a bootstrap development for a couple of VC guys who invested a very small amount to see if it could turn into an "American Dream" project with a long term cash cow payoff. The goal is to get there from here eventually and with no addition need for cash. And that, amazingly and slowly, we're doing.

[ohnjee]

Please compare the performance
between Blockhead and Balanced Max.
I wonder the result since I'm a Blockhead user!

[cooperpwc]

Originally Posted by Tyll Hertsens

You see, your initial premise is wrong right from the start: HeadRoom is not a vehicle for outside investors. It's a bootstrap development for a couple of VC guys who invested a very small amount to see if it could turn into an "American Dream" project with a long term cash cow payoff. The goal is to get there from here eventually and with no addition need for cash. And that, amazingly and slowly, we're doing.

This is fantastic business statement. It makes me twice as glad to buy your products. (They also sound great.)

[wharfrat1]

Man, business is tough! All I can see is keep going, it's worked for this long, and I'm sure it will get you where you want to be. For shame on those people that will only do speakers, they don't know what they are missing!