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Shure SE846: A New In-Ear Flagship From Shure. Finally! (Impressions p26-28) - Page 52

post #766 of 3180

I think people don't understand the massive costs involved in R&D. 2 years of paying top engineers to do the design, then R&D for the tooling to produce the parts to a sufficient degree of precision, then paying for custom tooling for production, plus all the testing required. I think we are trying to rip them off if anything when we say the price is too high! If you want the bleeding edge, expect to pay for it.

post #767 of 3180
Right. If the price was lower people would still be arguing over the differentiator compared to what is already available. Goal posts shifted, same field. See the same backwards and forwards in your Phonak, Westone and Heir threads
post #768 of 3180
Quote:
Originally Posted by Currawong View Post

I think people don't understand the massive costs involved in R&D. 2 years of paying top engineers to do the design, then R&D for the tooling to produce the parts to a sufficient degree of precision, then paying for custom tooling for production, plus all the testing required. I think we are trying to rip them off if anything when we say the price is too high! If you want the bleeding edge, expect to pay for it.

 

I think that's taking your very valid argument a bit too far, tbh — for a company like Shure (or Sennheiser), that is.

post #769 of 3180
Quote:
Originally Posted by Currawong View Post

I think people don't understand the massive costs involved in R&D. 2 years of paying top engineers to do the design, then R&D for the tooling to produce the parts to a sufficient degree of precision, then paying for custom tooling for production, plus all the testing required. I think we are trying to rip them off if anything when we say the price is too high! If you want the bleeding edge, expect to pay for it.

 

Like I said earlier, engineer salaries have not risen by that much over the last few years. You can make the same argument for the SE535, or XBA-3, or GR07 (again, biocellulose), or FX700.

 

Shure, like Apple or Samsung, has the name to move an incredible number of units based on their name alone. Amortizing their R&D costs over a longer period of time wouldn't kill them. I'm involved in the pharma industry, so I know that R&D can be a pain in the wallet. In this industry, it takes almost $1 billion for a single drug to make it to market. Shure's costs are nowhere near that.

 

I did some (assumptive) calculations, and with their profit they could pay off an R&D budget of $30 millon with 40,000 units. Everything after that is pure uncut profit.

post #770 of 3180
Quote:
Originally Posted by Currawong View Post

I think people don't understand the massive costs involved in R&D. 2 years of paying top engineers to do the design, then R&D for the tooling to produce the parts to a sufficient degree of precision, then paying for custom tooling for production, plus all the testing required. I think we are trying to rip them off if anything when we say the price is too high! If you want the bleeding edge, expect to pay for it.


Thank you, Currawong, voice of reason.  I'd go a step further and offer the opinion that Shure really doesn't have to justify anything.  This is, after all, an industry filled with merchandise of want versus need!  How many negative responders currently have multiple portable amps, desk top amps, and the corresponding multitude of DAC's, many purchased at outrageous prices that certainly don't justify the R&D required to build them.  For Heaven's sake,  how many times has it been said; "If you don't want to pay for it, don't buy it!"?

post #771 of 3180
Quote:
Originally Posted by fiascogarcia View Post


Thank you, Currawong, voice of reason.  I'd go a step further and offer the opinion that Shure really doesn't have to justify anything.  This is, after all, an industry filled with merchandise of want versus need!  How many negative responders currently have multiple portable amps, desk top amps, and the corresponding multitude of DAC's, many purchased at outrageous prices that certainly don't justify the R&D required to build them.  For Heaven's sake,  how many times has it been said; "If you don't want to pay for it, don't buy it!"?

 

I'm really tired of listening to the all the blathering about the price.  It's enough to turn a good Democrat Republican  :) 

 

@eke, when you go into practice, make sure you get yourself a good cpa .... you clearly have no sense of business or how a free market works.


Edited by BobJS - 5/15/13 at 7:44am
post #772 of 3180

I too agree that the R&D argument is a bit weak.  I just don't know if the R&D costs for something like this substantially outshone for instance the development of the original 500, with its funky PTH module, innovative packaging, etc.  They have enough skin in the IEM game at this point that adjusted for inflation, it could very well be less.

 

I think the price we have here is simply so Shure can get in the ring and have a statement product at a similar price point to a handful of their competitors.  Secondarily maybe it's to maximize profits (nothing wrong with that - it's a sign of an efficient business), but you can't just look at this one IEM, but how it may have a halo effect on the entire line.   I also have a feeling that there maybe a unit or two beneath this released over the the next year with the same low pass tech (perhaps a triples and double driver) and how successful this is may inform pricing on those - and those may be where the greatest costs are recouped and profit is made.


Edited by bobeau - 5/15/13 at 7:40am
post #773 of 3180
Quote:
Originally Posted by BobJS View Post

 

@eke, when you go into practice, make sure you get yourself a good cpa .... you clearly have no sense of business or how a free market works.

 

Please educate me then. Can you make another proper assessment of the costs?

 

I've already given examples of companies that push the limits of their products every single year, without raising end user costs by a single cent.

post #774 of 3180
Quote:
Originally Posted by eke2k6 View Post

 

Please educate me then. Can you make another proper assessment of the costs?

 

I've already given examples of companies that push the limits of their products every single year, without raising end user costs by a single cent.

Their costs are an internal matter for them.  They can choose to sell at a loss (as a loss leader ... but not for long), or at a huge markup (early, to profit from early adopters and bleeding edgers, lowering the price later).

 

The product isn't out yet and the reviews aren't in, this may be gouging, or it may be underpriced, no way to know.  

 

If you sell an item you made yourself on eBay, aren't you entitled to price it as high as you want if you believe there's a buyer who will pay it?  If there is, good for you, if there isn't, you'll lower your price.

 

I find it ironic you use pharma as your example --- when a pharmaceutical company corners the market on a new unique drug, they charge enough to cover their amortized costs PLUS huge profit before their patent runs out.  And THIS is an industry where the market is not very elastic --- many pharma consumers NEED the product.

 

No one needs a $1K IEM.  If you can afford it and want it, more power to you, and more power to Shure.

post #775 of 3180
Thread Starter 
Quote:
Originally Posted by eke2k6 View Post

...Nobody is questioning the sound of the Shure iems. What is being criticized is the fact that a mainstream company like Shure is putting out an iem at $1K, boutique prices, despite their access to relatively massive manufacturing and infrastructure. It's pushing the market into thinking that $1K is "ok" for a flagship phone that is not resource intensive to manufacture. You mention the Miracle and 334, two iems that are very time and labor intensive to produce, and require individualized attention by technicians.

 

Even barring pending patents, the precision required to implement that low-pass filter assembly is something few companies in the space could currently do, no matter the amount of individualized attention and labor applied to it.

 

Being a mainstream company or not is irrelevant to this discussion, in my opinion. And what does being a "mainstream company" mean anyway? In the consumer market, I don't consider Shure a mainstream company, and even less so in the last several years, as they've substantially reduced their presence in consumer channels.

 

Quote:
Originally Posted by eke2k6 View Post

 

Like I said earlier, engineer salaries have not risen by that much over the last few years. You can make the same argument for the SE535, or XBA-3, or GR07 (again, biocellulose), or FX700.

 

Shure, like Apple or Samsung, has the name to move an incredible number of units based on their name alone. Amortizing their R&D costs over a longer period of time wouldn't kill them. I'm involved in the pharma industry, so I know that R&D can be a pain in the wallet. In this industry, it takes almost $1 billion for a single drug to make it to market. Shure's costs are nowhere near that.

 

I did some (assumptive) calculations, and with their profit they could pay off an R&D budget of $30 millon with 40,000 units. Everything after that is pure uncut profit.

 

As a small business owner, I'm always amazed at the assumptions I see made about business. I'm going to throw my own assumption out there now and assume (knowing I may end up very wrong here, but I'll venture the guess anyway) that you're not a business owner.

 

And are you really suggesting that Shure has much in common with two companies that last year reported annual revenues of $169,100,000,000 and $187,900,000,000, respectively? And you're also comparing them to pharmaceutical companies, the top five of which last year reported an average $49,900,000,000 in annual revenue?

 

I have no idea what Shure's financial position is. I do know the team working on the SE846 has been working on the product and components of its design for years. And I really don't feel that its price in any way diminishes the value of any of its other IEMs (a few of which I feel are strong performers at their prices).

 

Nobody's going to force you to buy it. And nothing about its release is going to make whatever it is you do like sound any worse.

post #776 of 3180

Yeah at this point I can't resist throwing my 2 cents in here.

 

- Opinions on the price have been stated many times over.  Its a high price and there's nothing to be done about it, market will dictate if it stays that way or not.  Shure can price these however they choose regardless of how we feel.

 

- The point about R&D costs etc strikes me as a red herring.  Salaries and inflation have not jumped an amazing 100% or even close in the last few years.  This feels like they are following suit to compete with the AKG / Sennheiser high end universals.  Its their new flagship IEM, and competing flagship IEMs are priced accordingly.  I simply think that's the governing factor here not their R&D costs. 

 

But really whats the outrage for.  This is some luxury boutique item that hasn't even been released yet.  Everyone sit back and chill, let the scenario play out a little more before grabbing your pitchforks.

post #777 of 3180
Quote:
Originally Posted by Currawong View Post

I think people don't understand the massive costs involved in R&D. 2 years of paying top engineers to do the design

 

So people stopped to believe in gods... and now they believe in engineers? LOL.

 

Product designers and engineers are cheap. And if there are a few geniuses, that do get better paid than in your average company, they will definitely not work in the in-ear production line. I think it's very likely that Shure's engineers do not earn more than anyone in the automobile industry (probably even much less). Last time I checked, it's a very poorly paid job.

post #778 of 3180

this is getting boring

post #779 of 3180
Quote:
Originally Posted by gkanai View Post

Fwiw, Lexus sold every one of the LFAs that they made. So for Toyota it was a success.
I think they said they were losing money on every single one too. Crazy carbon fiber weaving machine, one of only two in the world I think. It's not a stretch to think that Shure could barely be breaking even here for a long while and this bravado (for putting innovation over lower prices) could boost their lower end market visibility. I'm sure every single tech and audio outlet has by now reported on this crazy new Shure IEM with its insane innovations and its otherworldly price. I have no doubt that people will hit the source link to the Shure website and see the 215 and go oooo.

I for one can't wait for the new $1500 Bose IEM and its 3 color cable.
post #780 of 3180
A 1 million and 100 million dollar movie are both 8 bucks at the box-office. The more expensive movie will invest more in marketing and recoup in volume.

I'm just a little disappointed that (if Shure truly believes they've innovated), they should have taken on the Beats/Bose types (in that price category). That would have taken a strong upfront investment in marketing. I don't really blame them for not taking the risk. It sets them up for counterfeiters, copycats, not to forget outright failure. It would have cannibalized their current line, but it would have saved me money. And after all, this is all about me. Instead, Shure went for the audiophile premium.

Make no mistake, I'm going to pay it. C'mon release date!
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