How much do headphones cost? - Page 3

nobody wants to drop prices, who wants to kill the golden goose.

the Chinese have taken the tube amp market by storm, soon or later they'll do the same w/ headphones.

Estimating production costs is tricky from our outside perspective. It also varies from industry to industry, selling 2$-shoes for 200$ and than claiming that you cannot afford proper education, wages, safety-, environmental- and social-standards is one extreme...

Sennheiser is family-company and mostly engineer-driven in their professional department (don't start with their consumer crap made in China) - no need for growth at any cost, no debts, long-sighted thinking and investments.

The HD800 took 6 years to develop, they sold about 4000 pieces in 6 months and final assembly (not production of the components!) takes 45min - these are the known facts, so let's estimate given that they want ROI within 20000 pieces (over 2 years are in fact very long-sighted for the electronic industry):

R&D with 5 people (most likely more, but not always working on the same project) in 6 years @ 100000€/year + tools/equipment = 3.000.000€/20000 = 150€

Production Equipment One assembly line + testing equipment propably doesn't cost very much, let's say 1.000.000€/20000 = 50€

Materials not very much because most material is sourced as finished component from suppliers, let's say 5€

Tools which can only be used for the HD800, especially molding tools by the suppliers, let's say 12 tools costing 50000€ each in average / 20000
= 30€

Supplied parts additional to the tool costs mentioned before, the material and their margin, let's say 100€ (the Neutrik plug alone costs over 3€ for a normal customer)

Assembly including every costs (maintaining workplace, power, wage, tax, margin) in Germany is usally between 50-150€/h (about 15-25€/h wage for the worker) for 45min = 75€

So the rough estimation would be 410€ - but it could be easily 100-200€ more or less without knowing additional facts.

That comes close to a fair price for a high-quality-product, I'm sure they're making more money with one of their chinese headsets - it's most likely not their big "cash-cow"...

By the way, Beyer and Sennheiser manufacture their high-quality drivers in Germany - not in China. In fact, Beyer even manufactures most mechanical parts themselves and Sennheiser sends drivers from Ireland/Germany to China to assemble their lower-end headphones.... The HD800 uses a South Korean cable (not the plugs) and Japanese microfibre for the cushions (which are made in Germany) - the rest is nearly entirly made in Germany.

Most workers from Sennheiser/Beyer are skilled crafstmen, they are educated/trained about 3 years (usually in corporation with a technical school and their own education department) before starting their work. Many machines are exclusive for Sennheiser/Beyer, some of them are even developed and made by them, they both have over 60 years experience - Chinese won't be able to manufacture headphones like the T1 or HD800 without re-thinking their mindset regarding quality, production, education and people.

Ok, but some of the cheap beyers(DTX serie?) use the same Chinese OEM chassis as Ultrasone and SkullCandy...god knows where the drivers are sourced from. But anyway, yes, manufacturing in Europe has a cost.

that's fine.

it's still mostly made here (assembly, plastic parts, etc.)

The audio world is full of high margins.

Speakers, cables, headphones, stands, mounts, etc.

Working in retail, you get to experience the joy of being interesting in audio and have access to store cost prices, but store cost doesn't even come close to manufacturing cost.

For example, Energy speakers had a promotion through my store for 80% off their products when ordered direct, whereas in-store out discounts were around 60% on most speakers and about 40-50% off subwoofers. Headphones of course being similar, when we carried the HD600 & HD650, cost was around 50% of the retail value. All these are just retail side, but if that much margin is given to us to fool around with, then the manufacturers obviously have to be making money off that initial sale to the companies.

It's a shame my store doesn't carry much for HiFi headphones any more. : (

Yes, many smaller Beyerdynamic headphones and most Sennheiser-models have very little to do with their legendary name - I don't think it's a long-sighted business trading your good name for a few € (before perfect copies of "your" headphones arrive)...

They could develop a modern, sophisticated mass-production with automatisation which would be controlled by few highly-trained "Facharbeiter" and engineers. Such a production system would easily surpass every other kind (19th century ape-assembly...) of mass-production regarding efficiency and quality (just look at Swatch) . But it's very expensive to establish and the market for lower-end-consumer-electronics is basically dead: dealer margins are high, a few of them control nearly the entire market, they don't have trained peronal to explain complex technology or hidden quality-aspects to customers... They would need to establish their own dealer-network and none of these long-sighted specialists is large enough while the big global players (Philips, Sony...) are to short-sighted controlled by sharholders...

It's the same tragedy with many consumer products today. You want decent quality? You'll have to buy exotic high-end... Or you accept cheap crap and buy a new one every few years... But that's the economic world our beloved stock markets and banks (it's not Sonys business to make good products, they just have to satisfy their shareholders) created - let's wait for the next bubble to explode... but that's another topic

Georgl (and others on this thread), very interesting posts.

This is probably totally academic, but I wonder how much it would cost Sennheiser to retool, or however they would go about it, their old HE90 production equipment and re-release some more of them for those of us who got into this hobby late in the game?

Ditto for Sony to do the same with the R10s?

I guess the same question could be asked, in a way, for Grado and Joe Grado's HP1 and HP2s.

Recognizing that (from what I understand) the HE90s and the R10s were relatively slow sellers when they were available, I wonder why some companies don't consider working on a "subscription" basis - that is, take X number of pre-orders and, if the numbers are high enough, decide it's worth producing some more of these legendary products. Which brings us back to the question of cost - how much of a hit would these companies take if ever they were to do so.

Sadly, fantasyland, of course, but would either of these companies ever consider doing so, in your opinion? I'm sure there's a few of us (including myself) that might consider biting if they ever did...

granted, some headphone drivers might well be hand-wound by a rare species of elves deep within a dark African forest but I suspect most are made on a manufacturing line of some sort. However, as others have stated, it's impossible to judge whether the mark-up we're paying is justified or not because there's so much more involved than simply the materials and putting them together.

Other than R&D, other big expenses involved in getting your beloved headphone on your skull include transportation costs, packaging costs, marketing/advertising/branding costs, corporate overheads etc. etc., all of which account for a proportion of the MRSP.

And then, of course, there's the public's perception that expensive things must be better... and I'm sure a few people on forums like this fuel that

I've talked to a few (non-audio) manufacturers over the years who have told me that they do indeed price some products higher to maintain the "luxury brand identity". If they can get away with it, why not? These companies spend millions gauging how consumers react to their products, so they probably know best what they can get away with.

Yeah, it's kind of like how some people think that a videogame or movie shouldn't cost much more than a dollar or two because that's all it costs to manufacture the disc. They forget about the millions of dollars that went into producing the content in the first place. Some think that digital distribution is going to give us huge price breaks, but the physical product is probably a small percentage of the cost.

In the audio world though, I don't doubt that there is quite a bit of markup, more than other industries. It's not just the price of crude oil that can get high. Snake oil is also expensive.

the biggest issue w/ headphones(and audio as a whole) is that very few companies invest in new technologies....selling you some dynamics headphones design that was invented in the 50's, do you think it'd cost the same as researching new technologies like on the HD800? there's no question that there's some hefty mark ups going on...the reseller takes 50% of the final price, and the manufacturer prolly makes a markup of 60/70%..and the higher the ratio the higher the headphones model? when you see grado's selling for one grand, I find it laughable.

Agreed.

Or "buy other sound equipment"

Its not really the material that Im not happy with; For headphones, I am mainly paying for the technology~ BOSE's sound quality sucks big time for its price..

Some of you are forgetting...it's about how the headphones sound. It's not flour or sugar. I owned Sennheisers for MANY years. Today, if you gave me a pair, I'd regift it to one of my siblings. I'm not a Senn guy anymore. Doesn't mean they don't make good headphones, they do. I don't care for the Senn house sound anymore. I believe the "cost" of a product is irrelevant if the "price" is competitive in the marketplace. Grados do sell for $1000. Grados sell for $1700. Grados sell for $70...and most prices in between. PS-1000 aren't 25 times better than SR-60, but who cares. The market will decide which products survive. Just because it's high school economics doesn't mean it isn't valid.

humm when you see this video, it's hard to say how much they *actually* cost...high tech machines, their maintenance, all the human work involved(and EEC is not mainland China ), R&D, taxes, RMA replacements, shipping to resellers, etc...

YouTube - How It's Made Headphones

and I was told by a pro-audio headphones amp manufacturer that they need to sell roughly 4X more expensive than what it cost them...so when I asked him why they didn't use AD797B opamps instead of 5532's, he told me that it'd raise the price for roughly $100...reason why many manufacturers just put swappable opamps to keep costs DOWN.