Pricing, tiers, TOTL, etc. - What is the *material* difference?

[Sebasistan]

Occasionally I wonder, what it is that makes the real, material difference between say, a set of IEMs that is sold at $200 vs. a set that goes for $2000?
We're all familiar with the whole "law of diminishing returns" in audiophile gear: at a certain point, the leaps and bounds in cost stop yielding differences in sound quality that are analog to the increase in expense.

But then what does justify the sometimes truly eye watering price tags of some TOTL pieces - and the fact that not all TOTL items are built the same in terms of price point adds to that mystery. One brand's flagship item is several times the price of another, similar item. - And that is again very different from the much much MUCH more individual and subjective "endgame," where some people's endgame piece of equipment will be something they bought for $170 while another's endgame piece is $1700.

With DACs/Amps and especially DAPs there is more to justify large fluctuations in price depending on tier. There's more immediate stuff going on between items. Faster processors, fancier sound chips, more features. So there I *kinda* get it.

But what about headphones? What about IEMs? What are the things that make some of those as stupefyingly pricey? How much of that is just branding? What all goes into the creation of these items that contribute to those price points? I guess at that point I'd also wonder what the naked production cost is, and how much of the price ends up being just a branding upcharge, as in "the luxury item is a luxury item because it is sold at a luxury price."

 

[castleofargh]

I can imagine many direct and indirect costs, R&D, exclusive components certainly have a cost, more so if they're made internally instead of asking Sonion to slightly tweak a BA driver and say it's a unique model. Tighter tolerances mean more rejects and/or more time spent on measuring and pairing drivers or whatever. Precision CNC can get quite costly(the more precision you ask for, the bigger the bill, as it requires the best machines and much more working time). For custom IEM, the hearing aid market has pretty much completely transitioned to 3D printing, and so did the audio brands(at this point I'd argue that those that didn't are just dinosaurs waiting to die). There is an initial cost, obviously, but it simplifies things so very much. Some printers come with the software to place drivers within the custom mold(with tubing and all, and then the stuff is printed with all the spaces at the right places), and you even get training on how to use it. More than that and the machine would have to make the IEM on its own.

At the end of the day, IMO, the reason an IEM can cost over $1500 is that someone is still willing to pay that price. That to me is the captain obvious conclusion. There's also the sad truth, making something more expensive does make us consumers assume it is better. We're raised to think the higher price is a superior product. And the audiophile market has had many instances of crappy random products sold a fortune with some entirely vague subjective claims(those you cannot be sued for lying about). I cannot imagine a reason why the IEM market would be spared.

 

[XTF1]

At the end of the day, IMO, the reason an IEM can cost over $1500 is that someone is still willing to pay that price.

Very well said!

Occasionally I wonder, what it is that makes the real, material difference between say, a set of IEMs that is sold at $200 vs. a set that goes for $2000?

This is the science forum so, the marketing (empirical?) laws are at play here: even if a higher-end IEM has more R&D and BOM cost, it is nowhere near the $2,000 and sales should be 0, none.
Unless… you can convince potential buyers that the law of diminishing returns does not apply and $2,000 is actually a bargain price for what you get.
Head-Fi vendors’ marketing, reviews and threads creating perception-based (not measurement-based) differences, head-fiers’ usual hyperbole gulping these imaginary differences and amplifying them with unlimited gain (and no feedback…).
This is the science forum, and all of this is, I believe, classic marketing (an applied science).

 

[theveterans]

Occasionally I wonder, what it is that makes the real, material difference between say, a set of IEMs that is sold at $200 vs. a set that goes for $2000?
We're all familiar with the whole "law of diminishing returns" in audiophile gear: at a certain point, the leaps and bounds in cost stop yielding differences in sound quality that are analog to the increase in expense.

But then what does justify the sometimes truly eye watering price tags of some TOTL pieces - and the fact that not all TOTL items are built the same in terms of price point adds to that mystery. One brand's flagship item is several times the price of another, similar item. - And that is again very different from the much much MUCH more individual and subjective "endgame," where some people's endgame piece of equipment will be something they bought for $170 while another's endgame piece is $1700.

With DACs/Amps and especially DAPs there is more to justify large fluctuations in price depending on tier. There's more immediate stuff going on between items. Faster processors, fancier sound chips, more features. So there I *kinda* get it.

But what about headphones? What about IEMs? What are the things that make some of those as stupefyingly pricey? How much of that is just branding? What all goes into the creation of these items that contribute to those price points? I guess at that point I'd also wonder what the naked production cost is, and how much of the price ends up being just a branding upcharge, as in "the luxury item is a luxury item because it is sold at a luxury price."

You can't EQ your way with a budget headphone such as an HD6XX to sound like Raal 1995 Immanis just because of driver tech alone. Ribbon driver have inherent properties that make their headphones sound the way they do and people are willing to pay $$$$$ for it because you cannot get that specific sound (through EQ, convolution, DSP party tricks) out of any headphones aside from it.

 

[2leftears]

Occasionally I wonder, what it is that makes the real, material difference between say, a set of IEMs that is sold at $200 vs. a set that goes for $2000?

What makes you think there always is a real, material difference?

Apart from what has already been said by the other posters above, it is quite common for relatively minor innovations to be initially marketed in a premium product line at a significant premium, targeting the customer base with a significant disposable income first. Once a sufficient percentage of the R&D has been recuperated (or at the point of saturation of the high-end market with the new product), the same innovation gets rolled out to the lower consumer tier product lines, at a much more affordable cost.

That is all about allocating profit margins and R&D recuperation across different product lines, at different time schedules. Manufacturers don't always get that right by the way, so some premium features can make their way into the more affordable product lines sooner than anticipated.

This goes hand-in-hand with the marketing psychology of envy, building up a demand in a much larger customer base who can't afford the premium product line.

In many cases what you are really paying for in the premium products is the 'exclusive' first access to some (potentially rather minor) product innovation, in which case you can save yourself a bundle of money by being just a little more patient and access the same technology a couple of years later or so at much reduced cost.

 

[Sebasistan]

This is the science forum so, the marketing (empirical?) laws are at play here: even if a higher-end IEM has more R&D and BOM cost, it is nowhere near the $2,000 and sales should be 0.
Unless you can convince potential buyers that the law of diminishing returns does not apply and $2,000 is actually a bargain price for what you get.
Head-Fi vendors’ marketing, reviews and threads creating perception-based (not measurement-based) differences, head-fiers’ usual hyperbole gulping these imaginary differences and amplifying them with unlimited gain (and no feedback…).
This is the science forum, and all of this is, I believe, classic marketing (an applied science).

I was very deliberate in posting this thread in the science forum.

 

[BS5711]

I agree that certain items cost a lot because people are willing to pay that and consumers assuming that more expensive means it is better.

I think it goes beyond that, however. I think there is a market that will buy gear BECAUSE it is expensive not DESPITE that it is expensive.

There is an IEM that is somewhat popular in certain circles despite a crazy price tag and obviously poor tuning. People see it as "quirky", "bombastic" or "adventurous" or perhaps "specialist" tuning when in is really just objectively bad. If it was a $300 IEM tuned that way not a $3,000 IEM I believe that it would be criticised not praised. Of course that tuning is assisted with an aftermarket cable that also costs $3,000 or so then it is just perfect !

 

[JamoBroGuy]

There is an IEM that is somewhat popular in certain circles despite a crazy price tag and obviously poor tuning. People see it as "quirky", "bombastic" or "adventurous" or perhaps "specialist" tuning when in is really just objectively bad.

Trifecta?

 

[Ryokan]

There is an IEM that is somewhat popular in certain circles despite a crazy price tag and obviously poor tuning. People see it as "quirky", "bombastic" or "adventurous" or perhaps "specialist" tuning when in is really just objectively bad. If it was a $300 IEM tuned that way not a $3,000 IEM I believe that it would be criticised not praised. Of course that tuning is assisted with an aftermarket cable that also costs $3,000 or so then it is just perfect !

But that's just one iem (any many might really like it) you can't say in general a $3000 iem is little or no better than a $300 one.

 

[Sebasistan]

Another question then might be: what is the maximum price that makes sense to pay for any such item? Beyond a "whatever you feel it's worth it" because that's not really a good answer.

I'm saying this as someone whose most expensive piece of audiophile headphones/IEMs is at the current moment an IEM that cost me I think $170 and that to my mind/ears sounds so good that I have a hard time imagining anything sounding (significantly) superior. (BUT! That also makes me very curious about what an IEM of a higher tier might sound like, hence my making <3 eyes at the Dunu DaVinci...)

Most of the stuff that I use is classified as "beginner level" - yet for most non-audiophile people it would be preposterous to pay even what I have so far paid for most stuff - with the caveat that this is changing due to the advent of TWS. The mass-market Air Pods have probably changed that at least a little bit towards "normies" now paying upwards of $100 for in-ears. I remember when I was an "advanced normie" (i.e. someone buying headphones/IEMs that you couldn't just get at any old Best Buy at the time) and felt like I was spending a lot of money ($60) on a pair of IEMs (Klipsch Image S4).

 

[theveterans]

Another question then might be: what is the maximum price that makes sense to pay for any such item? Beyond a "whatever you feel it's worth it" because that's not really a good answer.

I'm saying this as someone whose most expensive piece of audiophile headphones/IEMs is at the current moment an IEM that cost me I think $170 and that to my mind/ears sounds so good that I have a hard time imagining anything sounding (significantly) superior. (BUT! That also makes me very curious about what an IEM of a higher tier might sound like, hence my making <3 eyes at the Dunu DaVinci...)

Most of the stuff that I use is classified as "beginner level" - yet for most non-audiophile people it would be preposterous to pay even what I have so far paid for most stuff - with the caveat that this is changing due to the advent of TWS. The mass-market Air Pods have probably changed that at least a little bit towards "normies" now paying upwards of $100 for in-ears. I remember when I was an "advanced normie" (i.e. someone buying headphones/IEMs that you couldn't just get at any old Best Buy at the time) and felt like I was spending a lot of money ($60) on a pair of IEMs (Klipsch Image S4).

Really depends on how much you value the experience. Keep in mind though the diminishing returns which is subjectively starts anything above $20 USD for IEM and anything above $20 USD Koss KSC75 for headphones IMHO. I think you're about to suffer from FOMO, but I highly suggest to go to a dealer or CanJam to truly find out for yourself

 

[Ryokan]

I'm saying this as someone whose most expensive piece of audiophile headphones/IEMs is at the current moment an IEM that cost me I think $170 and that to my mind/ears sounds so good that I have a hard time imagining anything sounding (significantly) superior.

Reading this reminds me of an episode of Star Trek Next Gen when Picard is introduced to the Borg. Listen to something like EE Odin.

 

[BS5711]

But that's just one iem (any many might really like it) you can't say in general a $3000 iem is little or no better than a $300 one.

Of course and I most certainly didn't say that, I didn't even infer that.

It is a good example of something that many people will buy because it is expensive not necessarily because it is objectively or technically good. Honestly, I believe it would have been poorly received if it was cheap, there is no perceived status anymore only the performance which many find to be subjectively poor and is objectively poor also.

Yes a lot of people like it but I suspect a lot of people like it because they wanted to like it.

I saw a review from somebody who said that IEM required a "certain degree of maturity as an audiophile" .... WTVRF ?

 

[XTF1]

You can't EQ your way with a budget headphone such as an HD6XX to sound like Raal 1995 Immanis just because of driver tech alone. Ribbon driver have inherent properties that make their headphones sound the way they do and people are willing to pay $$$$$ for it because you cannot get that specific sound (through EQ, convolution, DSP party tricks) out of any headphones aside from it.

Don’t want to argue too much as I suspect it won’t end up well… but you talk about specific sound: what would that sound be and what is specific about it ?

Then you attribute this specific sound to ribbon driver properties: any information about the cause & effect? I believe ribbon drivers are capable of reproducing (inaudible) ultrasound frequencies, what other properties do they have.

Finally, you said that you can’t get that specific sound through EQ or Convolution: care to elaborate and provide elements proving that point?

 

[BS5711]

Another question then might be: what is the maximum price that makes sense to pay for any such item? Beyond a "whatever you feel it's worth it" because that's not really a good answer.

I'm saying this as someone whose most expensive piece of audiophile headphones/IEMs is at the current moment an IEM that cost me I think $170 and that to my mind/ears sounds so good that I have a hard time imagining anything sounding (significantly) superior. (BUT! That also makes me very curious about what an IEM of a higher tier might sound like, hence my making <3 eyes at the Dunu DaVinci...)

Most of the stuff that I use is classified as "beginner level" - yet for most non-audiophile people it would be preposterous to pay even what I have so far paid for most stuff - with the caveat that this is changing due to the advent of TWS. The mass-market Air Pods have probably changed that at least a little bit towards "normies" now paying upwards of $100 for in-ears. I remember when I was an "advanced normie" (i.e. someone buying headphones/IEMs that you couldn't just get at any old Best Buy at the time) and felt like I was spending a lot of money ($60) on a pair of IEMs (Klipsch Image S4).

Whatever you feel is a sensible upper limit based on your disposable income really is as good an answer as any.

I have a set of $135 IEM that I won't part with. I have retuned them slightly with nozzle filtering/grill and really enjoy their sound. I very happily listen with them as much as several other sets that are around $600 to $1400 USD and I very much preferred them over a set that cost $1600 USD which I have long since sold at a great loss because I simply didn't want them in the house !

There is literally no guarantee that you will enjoy even a very expensive set that gets rave reviews.

Electronics are even worse in terms of diminishing returns, very little money will get great performance these days. People bang on about subtle or not so subtle differences with DAC, amps, cables etc but they are inevitably the same people that have never undertaken blind listening to see if they can actually hear a difference.