another thing i should mention is that on head-fi it doesn't matter what's the cost of a headphone, because you can sell it for around the same price you get them if you buy used (sometimes if you buy new). imagine buying an "overpriced" K1000 for $600 and sell it for $1300 today. So does it really matter what's the cost of a headphone when you know you're not going to lose money if 1) you don't like them 2)they sell like hotcakes?
There are hardly any guarantees that you are going to make money or even break even when you buy a headphone. If it's a talked about brand/model you might be able to obviate loss, but in general there's still loss. Even Wmcmanus had a risk when he moved in on his deals... though perhaps the risk was minimal given what he knew of the headphone industry.
I'm sure you have sold a thing or two in the FS forums and I'm as sure that you have marked them down enough to still be taking a loss. From a financial standpoint the longer you spend not being able to sell your item + depreciation of the US dollars you will be receiving due to inflation + the opportunity cost of not investing that money into something like at least a high interest bearing bank account or a mutual fund all equate to money you are losing. Not to mention paypal fees and shipping costs that may or may not be included in your asking price.
Headphones are certainly NOT a good investment in my opinion. Sure, certain models have quadrupled in value post discontinuation but obviously this wasn't forseeable by a large # of owners. I do not buy headphones as an investment or without fear that I am wasting money... I buy them to pursue the ultimate in listenable sound that my income can afford me (Or almost afford me ;p). I think Wmcmanus mentioned at some point that most people loss money through this hobby by buy and selling and that he has made a profit on paper, but he did also mention that he most likely won't ever sell and realize this profit.
Anyway, even if Sony could take the technology from an R10/Qualia and incorporate it into a cheaper product for the mass market it would mean obsoleting all their other lines. Lines that would not be able to survive a same scaled price cut... and even if they could people would probably want the uber phones that are now priced cheaply anyway. That's assuming that a large chunk of the R10/Qualias production cost isn't thanks to development, which I am sure it is given their past history with say... gaming consoles. Where's the uber markup there ? ;p Of course that's a whole different business model... if Sony could take a chunk of every sold mp3 or album as a license for their R10/Qualia platform then I bet we'd have very reasonable prices!
Originally Posted by markl /img/forum/go_quote.gif Why do people always assume that the final cost of any product is just the cost of the raw materials? Business 101 should be mandatory in all high schools.
1. Facilities costs. Your company and production facilities have to be housed somewhere, that ain't free. We pay for this in every product we buy.
2. Machining costs. You can't build anything without equipment.
3. Labor. Someone has to build it.
4. Development costs. Headphones don't emerge out of a magic hat. People spend months maybe years developing new technologies.
5. Human resources. Management, HR, Marketing, Engineering, Sales, etc. All these necessary people have to be paid.
6. Marketing/promotion. No one can buy your product if they don't know it exists.
7. Channel costs. You have to get it to the marketplace somehow. Middlemen take their cut.
8. Retail costs. The final seller has to get their fair share of the markup to make it worth their selling it.
If you were managing a company and were charging cost of raw materials plus 10% "profit margin" on your products you'd be out of business in a week.
I assumed no such thing. I just mentioned "raw materials" because that's an easy way of understanding that money must go into the process... Obviously a strategy that involved selling extremely high volumes of headphones at low margins would involve advertising costs, etc, etc. If you're going to be a stickler about language and ignore the big picture of my point because of that one term, please just imagine that I said "overhead costs" instead of "raw materials"... the point is the same in the end.
You apparently aren't taking into account how actual modern production works. Which is to say, there are significant initial costs to developing and making a product, but as time goes on your operating costs fall significantly. Assembly lines get more and more cost-efficient the longer you run them; THAT'S simple business 101 there.
You also are completely ignoring the huge, huge amount of companies whose entire strategy IS producing and moving (selling...) extremely high volumes of product at very low profit margins. That strategy is what has revolutionized retail in the last 30 years. That is what, for example, Wal-Mart demands all its suppliers do: keep cutting unit costs and slicing down the supplier's profit margin, over and over, while selling increasing volumes of product to make up the difference.
If a company made an extremely good headphone and took that strategy with it, lowered unit costs and mass-marketed it and got distribution through big-box retailers, they could destroy the pricing structure of the high-end headphone industry.
Originally Posted by Zoide /img/forum/go_quote.gif I think you might be right on this one. Who knows, but they might completely change the face of the hobby in 10 years time. I think we've gotten hints of that with the recent success of DACs like the Zhaolu and several of the Chinese tube amps. It's still a small start, but it might be the start of something much much bigger.
I wouldn't hold my breath. The Chinese tube amps are a horrible abortion of proper design, sure they may look pretty and use "audiophile parts", but the circuit designs themselves show they know little to nothing of engineering principles involved. These are the morons who think it's possible to drive a 300B output tube with a 6SN7, or even worse a 12AU7. And then you wonder why the treble's rolled off (high plate impedance on the driver combined with the large miller capacitance of the 300B) and the bass is mushy and lacking definition (insufficient current, voltage swing, and the Ra is too high). Let's not even get into the braindead vegetables who think it's stylish to use a 12AX7 to drive a 300B which then powers an 845 or 211.
Or how about hey, let's use a small signal triode and hook it up to a MOSFET to make a hybrid, the best of both worlds! Neglecting the fact that a MOSFET has a high gate capacitance which combined with the underpowered tube is once again going to result in horrible mushy sound. At least put a cathode follower before the MOSFET.
These are the "geniuses" making your amps and DACs. Frankly, I don't expect them to do any better with headphones. They're great at ripping off designs and kludging them together, and that's about it.
Well I don't doubt that there are good makers. I believe the Monarchy M24 I am investing in is Chinese made. Within 10 years its possible, 10 years is a long time and China's economy is moving/improving quite fast and with that quality standards will develop.
Still as the standards and processes come in place that will guarantee high yield/high quality.... so will the prices.
Originally Posted by Icarium /img/forum/go_quote.gif Well I don't doubt that there are good makers. I believe the Monarchy M24 I am investing in is Chinese made.
But where was it designed? Actually that's a rhetorical question.
Quote:
Within 10 years its possible, 10 years is a long time and China's economy is moving/improving quite fast and with that quality standards will develop.
Sure it's possible, but it's not likely. They have a very long way to go on the technology pyramid, they don't have the materials to build the machines which build the machines which build the goods, in this case, the headphones. The infrastructure has to be built from the bottom up, and that doesn't happen in a decade unless it's a crash program such as trying to build a nuclear weapons or landing a man on the moon.
Hangin' with the monkeys. Member of the Trade: Lawton Audio
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Quote:
If a company made an extremely good headphone and took that strategy with it, lowered unit costs and mass-marketed it and got distribution through big-box retailers, they could destroy the pricing structure of the high-end headphone industry.
You are never going to sell as many high-end headphones as tube socks. There are no economies of scale when you are making 2000 units per year tops.
No idea where they are designed. Yeah who knows, 10 years is a long time though. Things certainly can move a lot faster now than they could 50 years ago... Shrug.
I think the dissenters think they could cost cut on materials/quality and thusly be able to manufacture a ton for cheap and still have an incredible headphone... but I've heard many times that even slight changes in the internals will result in a major change in sound.
1. I do believe on some level one of the reasons why a company hasn't tried to "shatter" the pricing structure is simply because they don't want to because it actually benefits them. Wasn't it shown at one point that the top selling HP were the Ibuds? To put it simply if a business can get away with a high output volume, low input cost product, they'll do it.
2. While I'd love a low cost fairly high performing product (let's say a >$50 580 type HP), from a business standpoint I don't think it's financially practical to do so, especially if you can get away with current conditions.
3. As far as the post detailing business 101 goes (post 93), while that may work for big business, I don't believe that any HP manufacturer (or amp manufacturer, etc..) except MAYBE Sennheiser would have the means to do so. And again, if they can get away with a larger profit margin lower cost product, it would be financially stupid (from the business standpoint) to do so. The status quo benefits them. I will also say that I do believe that audiophiles will always be in the minority which further complicates the proposal.
Has anyone been to China??? They do make headphones. Heaps of "High End" ones which sound crap.
But good for an average Chinese person.
Remember, they are about 25-50 years behind the western world in terms of prestigious goods and luxury products so expectations are different there.
Remember the old mono radios they had in the 60's with the paper cones?? Well - imagine a population like that, and you give them Bose. (wait, Bose DO use paper drivers!) But you get my drift.
And Mark is absolutely right. If costs was just raw materials alone, Intel and AMD would be the richest companies on the planet. I mean - how much can a few grains of sand really cost?
R&D would probably be one of, if not THE biggest expense in this category of products.
x3/4 for the K701 bash.
I mean, it's a great phone for the price, and since I am a little bored of the Sennheiser Veil, I would probably trade my senns for a pair.
But I own K-1000's and they absolutely crap all over the K-701's. In fact, when I heard the K-701 for the first time at the Sydney meet, I was confused as to why there was so much debate between which was better on this forum.
The ONLY thing that the K701s do better is bass extension.
Even bass quality and impact is better on K1K's.
K1000 is becoming much like the LS3/5A speakers.They used to cost around $500/pair(if i recall correctly) during the 80's but now they are selling at $1000+ !
One thing is sure though - they dont become classics for nothing
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