Originally Posted by proton007
Any idea why the Schiit combo is cheaper than the O2/ODAC combo?
What is the technical difference between the two? Apart from the obvious battery and gain differences, that is.
Magni vs. O2:
Materials costs for both are pretty low, for high-volume orders, probably even lower for Magni because no batteries, steel rather than aluminum enclosure. The ICs that both use should all be pretty cheap, even the op amps in the O2. Neither has heatsinks inside I think, and both just use a AC/AC wallwart with the Magni's needing to be a little more expensive. Magni has primarily surface-mount parts (i.e. placed and soldered by machine), so with a large order there, labor costs should be lower. That's where the real savings are, even though apparently one can stuff and solder an O2 in about half an hour.
Modi vs. ODAC:
Again, materials costs should be pretty low for both. The ODAC is all surface-mount parts inside, with probably pretty much the same story for the Modi. ODAC is $100 for a board from a reseller like JDSLabs, which includes profits for the reseller as well as for George Boudreau (the guy that did mostly the USB part of the design, gets the boards ordered, and so on). Original pricing was based on trying to break even on a couple / few hundred boards. I think they've surpassed original targets by a fair margin by now.
Anyway, it's not like the price points for any of these are close to total production and labor costs. Pricing is based on whatever profit margin they want to keep. That said, most more-expensive audio gear has much much higher margins than these products.
ODAC and Modi materials costs have to be less than something like FiiO E10, which also has an internal amp and has dropped in price to about $55 on Amazon now.
edit: personally I think attributing the pricing to any other product in particular, as some are doing here, is probably a stretch. But I know even less about business, so that's just my guess.
Edited by mikeaj - 1/8/13 at 10:23pm