ab_ba
100+ Head-Fier
- Joined
- Jul 19, 2005
- Posts
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What drives the price of headphones?
As many of us are now eagerly awaiting the release of the HE1000, and others can’t wait for the new JH IEMs, it’s got me thinking, what drives the price of headphones? The new JH Audio entries are priced already, even though they are not available, but tantalizingly, HiFiMAN has yet to price their HE1000s. Their website says, “Final pricing and availability have still not been set though they will certainly be priced as reference products.” What could that possibly mean?? What is he trying to tell us? What is he waiting for? How long do *I* have to wait to know if I'm going to be able to own a pair??
No doubt, prices for TOTL headphones are going up, just as the market for them is increasing. And, blissfully, sound quality is also going up. I know it’s a pretty naive question - it’s just what you learn in Economics 101, but it’s fun to dwell on, and maybe try to guess what price Dr. Fang is going to name for his latest wizardry. At the end I’ll propose we play a little game of “The Price is Right” here.
So, here’s what I can think of, in order of what *should* drive the price of headphones:
1) Sound quality. That should be what you pay for, right? More money should mean better sound quality. We’re all comfortable with the fact that the curve flattens out - you’ve got to pay a lot more to eke out that next increment in sound quality. But still, sound quality is the #1 thing we are all happy to be paying for.
2) Engineering. Getting these things to sound right obviously takes a lot of design work. If it was easy, we’d have great-sounding earbuds, and hifi for the masses. I *want* to pay for good engineering. I hope that my purchase price remunerates the engineers, and also helps subsidize the development of the next great headphone.
3) Fabrication. Whereas I think it’s pretty likely that sound quality and engineering are the main determiners of price, as they should be, it’s also pretty likely that actually building these things is cheap, cheap, cheap. In fact, an inexpensive headphone probably doesn’t cost that much less to make than a top-of-the-line headphone. The good stuff is distinguished by its raw materials and its quality control, more so than by the cost of manufacture.
4) Styling. Yup, I’ve been enticed by good-looking headphones. I’ve paid more for custom faceplates on my IEMs. Heck, you wear these things - why not pay for them to look good and feel comfortable?
5) Perception. I see this factor in reviews of audio gear - higher-priced products almost always get better reviews than lower-priced products. I think we all succumb to it: sometimes, just paying more for something (or, hearing what it’s worth) makes it sound better to us. This is a major determiner of price for new cars and restaurants; we’d be naive to think it didn’t affect prices for audio gear. I don’t *want* to pay more for an item than I have to, but sadly, I know my enjoyment of it will have something to do with how much I paid I love having FLAC files for some of my favorite albums, but it’s dismaying when I A/B them against mp3s, even on my best equipment. What did I pay for, really?
I think JH Audio is somewhat trading on perception when they priced their new Sirens entries. They’ve got the TOTL Laylas at $2500 - probably the most expensive IEM on the planet. For those who gotta have ‘em, there they are. And, it makes the Angies a steal at $1100. I’ll bet most mortals hearing the two side by side would not say the Laylas are worth twice price, if sound quality is your only factor. And, the engineering and fabrication cost differences can’t justify that price differential. So, there’s an example of perception driving the price.
6) Advertising, sales, packaging, shipping, warranties, cost of doing business, etc. All these things of course affect the price you pay for headphones.
OK Dr. Fang, what’s your move going to be? We’re all waiting! I’m wondering, will he stick with what HiFiMAN is known for - the exceptional price-to-performance ratio? It’s worked for his company so far: that’s why I bought my HE-500’s instead of LCD2’s. I came to the conclusion I was getting (nearly) as good sound quality for nearly half the price. I’ve been happy with my purchase. So, if he sticks with what has succeeded for his company, then he will price the HE1000 to compete well against other flagships, such as the HD800’s at $1500 and the LCD3’s at $2000, and he’ll come in under $2000. At that price point, I think he will sell a *lot* of headphones. I’d order a pair without even waiting for the reviews if they were under $2K.
On the other hand, does he think he’s got a Stax killer? If so, we’ll see a price up around $3000, and maybe even over. And I mean, why not? Thin, big diaphragms. A specialized amp to go along with it. (Though the HE1000s can be driven by your iPhone.) Sounds like an electrostatic to me, so why not price it with the big boys? Especially if you hear the initial raves. If he does that, though, HiFiMAN becomes a different type of company, and no doubt they will sell fewer HE1000’s, and perhaps even fewer to the point that profits would have been better with a lower price. Also, a too-expensive top-end product can actually have a negative effect on sales of products down the line; shoppers might figure, if the HE500 is 80% less than the HE1000, how good can it be, really? Companies are better off sticking with a consistent pricing philosophy.
OK ready for a little game of The Price Is Right? What’s your guess for the selling price for the HE1000 (and, heck, the EF1000)? Let’s see who gets the closest without going over. And for that, your prize will be, you can buy the HE1000 for pretty much what you expected to pay! Not bad, huh?
I’m guessing: $1700 for the headphones. $1900 for the amp. Bring reference sound to the masses, and own the industry for years to come.
What’s your guess?
As many of us are now eagerly awaiting the release of the HE1000, and others can’t wait for the new JH IEMs, it’s got me thinking, what drives the price of headphones? The new JH Audio entries are priced already, even though they are not available, but tantalizingly, HiFiMAN has yet to price their HE1000s. Their website says, “Final pricing and availability have still not been set though they will certainly be priced as reference products.” What could that possibly mean?? What is he trying to tell us? What is he waiting for? How long do *I* have to wait to know if I'm going to be able to own a pair??
No doubt, prices for TOTL headphones are going up, just as the market for them is increasing. And, blissfully, sound quality is also going up. I know it’s a pretty naive question - it’s just what you learn in Economics 101, but it’s fun to dwell on, and maybe try to guess what price Dr. Fang is going to name for his latest wizardry. At the end I’ll propose we play a little game of “The Price is Right” here.
So, here’s what I can think of, in order of what *should* drive the price of headphones:
1) Sound quality. That should be what you pay for, right? More money should mean better sound quality. We’re all comfortable with the fact that the curve flattens out - you’ve got to pay a lot more to eke out that next increment in sound quality. But still, sound quality is the #1 thing we are all happy to be paying for.
2) Engineering. Getting these things to sound right obviously takes a lot of design work. If it was easy, we’d have great-sounding earbuds, and hifi for the masses. I *want* to pay for good engineering. I hope that my purchase price remunerates the engineers, and also helps subsidize the development of the next great headphone.
3) Fabrication. Whereas I think it’s pretty likely that sound quality and engineering are the main determiners of price, as they should be, it’s also pretty likely that actually building these things is cheap, cheap, cheap. In fact, an inexpensive headphone probably doesn’t cost that much less to make than a top-of-the-line headphone. The good stuff is distinguished by its raw materials and its quality control, more so than by the cost of manufacture.
4) Styling. Yup, I’ve been enticed by good-looking headphones. I’ve paid more for custom faceplates on my IEMs. Heck, you wear these things - why not pay for them to look good and feel comfortable?
5) Perception. I see this factor in reviews of audio gear - higher-priced products almost always get better reviews than lower-priced products. I think we all succumb to it: sometimes, just paying more for something (or, hearing what it’s worth) makes it sound better to us. This is a major determiner of price for new cars and restaurants; we’d be naive to think it didn’t affect prices for audio gear. I don’t *want* to pay more for an item than I have to, but sadly, I know my enjoyment of it will have something to do with how much I paid I love having FLAC files for some of my favorite albums, but it’s dismaying when I A/B them against mp3s, even on my best equipment. What did I pay for, really?
I think JH Audio is somewhat trading on perception when they priced their new Sirens entries. They’ve got the TOTL Laylas at $2500 - probably the most expensive IEM on the planet. For those who gotta have ‘em, there they are. And, it makes the Angies a steal at $1100. I’ll bet most mortals hearing the two side by side would not say the Laylas are worth twice price, if sound quality is your only factor. And, the engineering and fabrication cost differences can’t justify that price differential. So, there’s an example of perception driving the price.
6) Advertising, sales, packaging, shipping, warranties, cost of doing business, etc. All these things of course affect the price you pay for headphones.
OK Dr. Fang, what’s your move going to be? We’re all waiting! I’m wondering, will he stick with what HiFiMAN is known for - the exceptional price-to-performance ratio? It’s worked for his company so far: that’s why I bought my HE-500’s instead of LCD2’s. I came to the conclusion I was getting (nearly) as good sound quality for nearly half the price. I’ve been happy with my purchase. So, if he sticks with what has succeeded for his company, then he will price the HE1000 to compete well against other flagships, such as the HD800’s at $1500 and the LCD3’s at $2000, and he’ll come in under $2000. At that price point, I think he will sell a *lot* of headphones. I’d order a pair without even waiting for the reviews if they were under $2K.
On the other hand, does he think he’s got a Stax killer? If so, we’ll see a price up around $3000, and maybe even over. And I mean, why not? Thin, big diaphragms. A specialized amp to go along with it. (Though the HE1000s can be driven by your iPhone.) Sounds like an electrostatic to me, so why not price it with the big boys? Especially if you hear the initial raves. If he does that, though, HiFiMAN becomes a different type of company, and no doubt they will sell fewer HE1000’s, and perhaps even fewer to the point that profits would have been better with a lower price. Also, a too-expensive top-end product can actually have a negative effect on sales of products down the line; shoppers might figure, if the HE500 is 80% less than the HE1000, how good can it be, really? Companies are better off sticking with a consistent pricing philosophy.
OK ready for a little game of The Price Is Right? What’s your guess for the selling price for the HE1000 (and, heck, the EF1000)? Let’s see who gets the closest without going over. And for that, your prize will be, you can buy the HE1000 for pretty much what you expected to pay! Not bad, huh?
I’m guessing: $1700 for the headphones. $1900 for the amp. Bring reference sound to the masses, and own the industry for years to come.
What’s your guess?
In the world of audio everything is subjective and the higher-end the equipment, the more subjective becomes the discussion 
