Schiit Happened: The Story of the World's Most Improbable Start-Up
- Thread starter Jason Stoddard
- Start date
-
- Tags
- schiit audio schiit-audio
JohnnyCanuck
Headphoneus Supremus
Would that BBQ be NC or Texas?
JC
JC
Roy G. Biv
Headphoneus Supremus
TX BBQ penguin is better than NC BBQ penguin. 
Paladin79
Previously MOT: Cables For Less
This winter has been mild for me till now, we are in the storm that goes from Texas to Maine. We let our dog out the deck door this morning and he proceeded to go rolling down the steps like a hotdog because of the ice. I barely got home last night before the temperature dropped and all of this started, time to stay indoors and stay safe. 
Also a time to enjoy the warmth of Class A tube amps.
Also a time to enjoy the warmth of Class A tube amps.
Last edited:
StimpyWan
Headphoneus Supremus
We got lucky with this one. We're 45°, at present, so we're on the rain side of the front. The bomb cyclone missed us too. It went just north and east of us. I'm not complaining, but I do feel for the people that get hit head-on by these storms.
On a happy note, yesterday I saw my first jonquils, of the season, in bloom! A beautiful sight.
On a happy note, yesterday I saw my first jonquils, of the season, in bloom! A beautiful sight.
Luckyleo
Headphoneus Supremus
We're doing okay as well. Our cold snap last week is over and will be 82 degrees today.......We got lucky with this one. We're 45°, at present, so we're on the rain side of the front. The bomb cyclone missed us too. It went just north and east of us. I'm not complaining, but I do feel for the people that get hit head-on by these storms.
On a happy note, yesterday I saw my first jonquils, of the season, in bloom! A beautiful sight.
Jason Stoddard
Sponsor: Schiit Audio
Man, it's freezing today in California! It's like 43 degrees right now! I don't know how people survive in this cold!
Kidding, of course. I hear Corpus is having a cold snap (a mini freeze), so it's no better at the moment. But yeah, I'll take warm weather, thanks. Just a personal preference. There are no wrong answers, just as in the chapter that follows.
Kidding, of course. I hear Corpus is having a cold snap (a mini freeze), so it's no better at the moment. But yeah, I'll take warm weather, thanks. Just a personal preference. There are no wrong answers, just as in the chapter that follows.
Paladin79
Previously MOT: Cables For Less
LOL I am trying not to react to that.
I am just hoping the new snow falling makes it safer to walk on the layer of ice that is underneath it.
Last edited:
jcflox
100+ Head-Fier
Seems all the products have received the price bump on silver version, which had been foretold by Jason. Still, I'm personally happy they haven't given up on silver completely!
Jason Stoddard
Sponsor: Schiit Audio
2022, Chapter 2
Mea Culpa
It’s been over a decade since Modi and Magni were introduced.
During that time, we’ve increased performance, added features, improved quality, refined the looks, and, really, when you get right down to it, we completely transformed a simple, single-input DAC and single-gain amp to the flexible, high-performance products they are today…
…all while holding the line on price.
“Oh crap,” some of you are saying.
And yeah. Sorry. As the title says, mea culpa.
But it’s time we have a serious talk about, ahem, financial realities.
Things Don’t Stay the Same
Well, actually, for a long time, they didn’t just stay the same. They got better. I was shocked to see component and PC board prices generally lower than they had been in the 1990s, when I was ramping Schiit up in 2010.
And those trends continued for a while, at least on some parts. We got better resistors and capacitors for the same money for quite a while—which is one of the reasons we were able to improve our products so much.
“But this can’t last forever, can it?” I asked myself.
And eventually, I was right.
Last year, we started to see extreme price pressure all across the line. Raw steel went up 4X. Aluminum was 2.5X. Boards went up 1.5X. Parts started to creep…10% in some cases, 20% in others, 50% for some. And it wasn’t just raw materials the cost to make things started going skyward as well. The people who make our chassis, wind our transformers, and make our boards—all USA companies—had to offset their rising labor costs, too.
What’s worse, 2021 was the year of the Aluminum Flu. As in, the mills that produced our “perfect finish” sheet either went so far out on the delivery timeline we couldn’t count on them, or they went silent, period. At the same time, one of the companies we worked with from the start got bought and decided the difficult world of making consumer products wasn’t for them.
Luckily, our most critical metal partner stepped up and figured out some new aluminum finishing techniques that should result in more consistent silver products. That’s the good news.
The bad news is that it costs more.
The other bad news is that clear anodize will always vary a bit. Sigh. But it is a natural finish, so it does vary. Depending on the variations in alloy and surface finish, time in the tank, amount of etch, temperature, hell, phase of the moon, clear anodize is always a bit different. If we want it as consistent as black, we need to go to a sprayed silver.
But...I haven’t found a spray silver I like. We’re checking out Cerakote right now, but there’s no guarantee that it will be easier or less expensive (though, if it works, it may at least be consistent.) Don’t hold your breath—and don’t panic. I won’t allow us to choose an silver finish I don’t like, and I really really like silver.
Also, that said, we also seriously talked about dropping grained aluminum entirely. It would drastically simplify our line. And black always matches.
But I like clear anodize!
But silver is more expensive!
Which brings me to my first bit of mea culpa: almost all the silver products are going up in price.
How much? $10 for a small, $20 for a medismall, $30 for a medium, $50 for a medilarge, $100 for large. Or, to translate:
It means Magni and Modi are excepted. They stay the same price regardless of finish. That’s because we make a bunch of them, and the price for silver and black are still the same.
Except, well…Modis are going up in price, too.
Yeah.
The Cold Equations
I’ll forgive you some gnashing of teeth, but it was beyond time to raise Modi’s price.
Let’s review the facts:
In short, yes, Modi 3E is now available to order.
(Note: not in stock yet. We’ll fulfull current Modi 3+ orders soon, if you’re waiting and want AKM. Modi 3E is probably a month out, thank you supply chain stupidity.)
And yes, it’s ESS. ESS9018, if it matters. And it measures about 3dB better than the old one in terms of THD, and a couple dB better in noise floor. It may not sound like much—but now it’s within striking distance of Modius. And it has a whole bunch of ESS tricks that Dave and Mike learned from Fulla, Hel, and the 9028 card for the modular products…and Modius E, which will also be coming soon.
“So what’s the bad news on price?” you ask, cautiously.
In a minute.
Let’s continue running the previous line of thought down.
You know, the one where Modi has absorbed 10 years of inflation and grown into a 3-input, high performance product—while retaining the original price.
Anyone can go to an inflation calculator, and it’ll spit out a laughable number of 1.21x from 2012 to “today.” But I suspect “today” is really more like “well, maybe around the beginning of 2021,” not really “today.” And if you add the 7-9% numbers people are throwing around for the current rate, 1.3x seems a bit more realistic.
Well, unless you’re talking food or gas…but that’s another discussion, isn’t it?
So, 1.3x.
Or, so Modi 3E is $129.
Cue the armchair economists:
Let me answer the last first: well, there’s no way of knowing, is there? If we end up in a world of $25 Big Macs, sure, there may be additional price increases…but we did choose the new price point in hopes of not having to do the death-by-a-thousand-cuts thing.
As far as the $99 price tag? We ran the numbers. Bottom line, there’s no real path to a $99 Modi. Not even a single-input one. Or, well, at least there doesn’t appear to be. And I’m not sure we want to do a single-input Modi anyway. It doesn’t really save that much.
And finally, the first “whole different ballgame” comment: you do know that we’re still priced lower than overseas manufacturers making entry-level DACs, right?
Oh boy. I did it now.
Cue the howling.
And, I hear you.
So, to be perfectly clear: I’m not crapping on anyone else’s products, or second-guessing anyone’s decision. There are no wrong answers here. And, if you want a product that does MQA and DSD, then maybe our stuff isn’t for you. We’ve never tried to hide this fact.
And if you want the highest measured performance (based on a single number at a single frequency), yeah, maybe Modi isn’t at the top of the charts. But other people may want an affordable DAC created by—and obsessed over by—Mike and Dave, a team that is absolutely foundational in digital audio. Seriously, I don’t think I’ve seen so many iterative tweaks to a design than Modi 3E. And “absolutely foundational?” Yeah, I’d say that identifying jitter as a key performance metric for digital audio, using DSP to do their own digital filters, refining designs with FFT measurements, and implementing some of the first standalone DACs, digital preamps, and affordable digital products—in the 1980s and 1990s—is “absolutely foundational.”
And yeah, we know, our value proposition becomes weaker outside of the US, and some people don’t particularly care about an object’s provenance—but, again, some people do care.
Again, there are no wrong answers. There’s no shade being thrown. If our stuff works for you, great. If not, there’s plenty of other fine equipment out there.
So. To sum up:
Modi 3E: the highest-performing Modi ever. Now $129.
The Road to Tomorrow
“Okay, that’s fine,” you say. “We get it. You’re raising prices a bit on silver products. And there’s a new Modi that’s more expensive and higher performance. But where are you going with this?”
I think I answered this, but let’s explain in simpler terms: I think this is the one shot we need to adjust prices.
As in, don’t expect a new “price increase of the month.” You won’t have to worry about suddenly “now it’s Magni too,” or “here’s yet another upcharge on Bifrost 2.” Or anything else.
We thought long and hard about these price changes, and did everything we could to ensure they were required, appropriate, and not half-measures. So, unless there are other surprises—like accelerating inflation—we’re good.
And that doesn’t mean we won’t be looking at ways to bring prices down. After all, we’ve done it in the past.
There’s no reason we can’t do it again.
Here’s to happier days!
Mea Culpa
It’s been over a decade since Modi and Magni were introduced.
During that time, we’ve increased performance, added features, improved quality, refined the looks, and, really, when you get right down to it, we completely transformed a simple, single-input DAC and single-gain amp to the flexible, high-performance products they are today…
…all while holding the line on price.
“Oh crap,” some of you are saying.
And yeah. Sorry. As the title says, mea culpa.
But it’s time we have a serious talk about, ahem, financial realities.
Things Don’t Stay the Same
Well, actually, for a long time, they didn’t just stay the same. They got better. I was shocked to see component and PC board prices generally lower than they had been in the 1990s, when I was ramping Schiit up in 2010.
And those trends continued for a while, at least on some parts. We got better resistors and capacitors for the same money for quite a while—which is one of the reasons we were able to improve our products so much.
“But this can’t last forever, can it?” I asked myself.
And eventually, I was right.
Last year, we started to see extreme price pressure all across the line. Raw steel went up 4X. Aluminum was 2.5X. Boards went up 1.5X. Parts started to creep…10% in some cases, 20% in others, 50% for some. And it wasn’t just raw materials the cost to make things started going skyward as well. The people who make our chassis, wind our transformers, and make our boards—all USA companies—had to offset their rising labor costs, too.
What’s worse, 2021 was the year of the Aluminum Flu. As in, the mills that produced our “perfect finish” sheet either went so far out on the delivery timeline we couldn’t count on them, or they went silent, period. At the same time, one of the companies we worked with from the start got bought and decided the difficult world of making consumer products wasn’t for them.
Aside: want to see a metal vendor run? Mention “consumer finish.” That’s code for “perfect and cheap.” If a metal house has plenty of industrial or defense business, they’re probably not interested in the consumer stuff.
Aside to the aside: as we were looking for metal suppliers in Corpus, the joke was that, if they were a machinist, they wanted to know “what kinda valves we needed,” and, if a sheetmetal supplier, they wanted to know “what kind valve the housing went around.”
Aside to the aside to the aside: the grand irony of all of this is our metal now pretty much all comes from Corpus Christi mills, then goes to California for stamping, then either stays in CA or goes back to Texas. Sounds inefficient? It’s actually not too bad. But we’re working on localizing it more.
Luckily, our most critical metal partner stepped up and figured out some new aluminum finishing techniques that should result in more consistent silver products. That’s the good news.
The bad news is that it costs more.
The other bad news is that clear anodize will always vary a bit. Sigh. But it is a natural finish, so it does vary. Depending on the variations in alloy and surface finish, time in the tank, amount of etch, temperature, hell, phase of the moon, clear anodize is always a bit different. If we want it as consistent as black, we need to go to a sprayed silver.
But...I haven’t found a spray silver I like. We’re checking out Cerakote right now, but there’s no guarantee that it will be easier or less expensive (though, if it works, it may at least be consistent.) Don’t hold your breath—and don’t panic. I won’t allow us to choose an silver finish I don’t like, and I really really like silver.
Also, that said, we also seriously talked about dropping grained aluminum entirely. It would drastically simplify our line. And black always matches.
But I like clear anodize!
But silver is more expensive!
Which brings me to my first bit of mea culpa: almost all the silver products are going up in price.
How much? $10 for a small, $20 for a medismall, $30 for a medium, $50 for a medilarge, $100 for large. Or, to translate:
- Small: Mani sized
- Medismall: Lokius sized
- Medium: Jotunheim sized
- Medilarge: Freya sized
- Large: Ragnarok sized
It means Magni and Modi are excepted. They stay the same price regardless of finish. That’s because we make a bunch of them, and the price for silver and black are still the same.
Except, well…Modis are going up in price, too.
Yeah.
The Cold Equations
I’ll forgive you some gnashing of teeth, but it was beyond time to raise Modi’s price.
Let’s review the facts:
- It’s been more than 10 years—a decade—since we introduced Modi as a single-input USB DAC
- In that time, a three-input $149 Modi Uber was our first foray into more than one input
- That three-input format became standard at $99 with Modi 3, thanks to a simpler chassis and huge economies of scale
- But even Modi 3 has evolved—to Modi 3+, with Unison USB—a more expensive input receiver than our previous C-Media part, which we absorbed the increase on
- And it’s now evolved again, now to Modi 3E, the highest performing Modi ever
In short, yes, Modi 3E is now available to order.
(Note: not in stock yet. We’ll fulfull current Modi 3+ orders soon, if you’re waiting and want AKM. Modi 3E is probably a month out, thank you supply chain stupidity.)
And yes, it’s ESS. ESS9018, if it matters. And it measures about 3dB better than the old one in terms of THD, and a couple dB better in noise floor. It may not sound like much—but now it’s within striking distance of Modius. And it has a whole bunch of ESS tricks that Dave and Mike learned from Fulla, Hel, and the 9028 card for the modular products…and Modius E, which will also be coming soon.
Aside: please don’t ask me when, or hound our people about these products. The supply chains are still so monumentally boned that I posted recently on another forum, “based on parts availability, we appear to make imaginary products.” I am hammered by redesigns for stupid things like motor drivers and lame-brained microprocessors (used to run relays in preamps and as oversight in amps), and new shortages seem to pop up weekly. Lots of stuff got moved back on the schedule because 3 of our 4 PCB assembly partners had tons of people out for Omicron. This is a “it’ll happen when it happens” year.
“So what’s the bad news on price?” you ask, cautiously.
In a minute.
Let’s continue running the previous line of thought down.
You know, the one where Modi has absorbed 10 years of inflation and grown into a 3-input, high performance product—while retaining the original price.
Anyone can go to an inflation calculator, and it’ll spit out a laughable number of 1.21x from 2012 to “today.” But I suspect “today” is really more like “well, maybe around the beginning of 2021,” not really “today.” And if you add the 7-9% numbers people are throwing around for the current rate, 1.3x seems a bit more realistic.
Well, unless you’re talking food or gas…but that’s another discussion, isn’t it?
So, 1.3x.
Or, so Modi 3E is $129.
Cue the armchair economists:
Oh my gawd, that’s 30% higher, are you nuts, that’s a whole different ballgame!
Aren’t you concerned about losing the 2-digit price tag?
How do we know there won’t be additional price increases?
Let me answer the last first: well, there’s no way of knowing, is there? If we end up in a world of $25 Big Macs, sure, there may be additional price increases…but we did choose the new price point in hopes of not having to do the death-by-a-thousand-cuts thing.
As far as the $99 price tag? We ran the numbers. Bottom line, there’s no real path to a $99 Modi. Not even a single-input one. Or, well, at least there doesn’t appear to be. And I’m not sure we want to do a single-input Modi anyway. It doesn’t really save that much.
And finally, the first “whole different ballgame” comment: you do know that we’re still priced lower than overseas manufacturers making entry-level DACs, right?
Oh boy. I did it now.
Cue the howling.
“But those DACs may have features like MQA and DSD!” someone cries.
“And those DACs may have higher measured performance!” cries another.
“And who cares, I’m not some crazy flag-waving USAan!” states yet another.
And, I hear you.
So, to be perfectly clear: I’m not crapping on anyone else’s products, or second-guessing anyone’s decision. There are no wrong answers here. And, if you want a product that does MQA and DSD, then maybe our stuff isn’t for you. We’ve never tried to hide this fact.
And if you want the highest measured performance (based on a single number at a single frequency), yeah, maybe Modi isn’t at the top of the charts. But other people may want an affordable DAC created by—and obsessed over by—Mike and Dave, a team that is absolutely foundational in digital audio. Seriously, I don’t think I’ve seen so many iterative tweaks to a design than Modi 3E. And “absolutely foundational?” Yeah, I’d say that identifying jitter as a key performance metric for digital audio, using DSP to do their own digital filters, refining designs with FFT measurements, and implementing some of the first standalone DACs, digital preamps, and affordable digital products—in the 1980s and 1990s—is “absolutely foundational.”
And yeah, we know, our value proposition becomes weaker outside of the US, and some people don’t particularly care about an object’s provenance—but, again, some people do care.
Again, there are no wrong answers. There’s no shade being thrown. If our stuff works for you, great. If not, there’s plenty of other fine equipment out there.
So. To sum up:
Modi 3E: the highest-performing Modi ever. Now $129.
The Road to Tomorrow
“Okay, that’s fine,” you say. “We get it. You’re raising prices a bit on silver products. And there’s a new Modi that’s more expensive and higher performance. But where are you going with this?”
I think I answered this, but let’s explain in simpler terms: I think this is the one shot we need to adjust prices.
As in, don’t expect a new “price increase of the month.” You won’t have to worry about suddenly “now it’s Magni too,” or “here’s yet another upcharge on Bifrost 2.” Or anything else.
We thought long and hard about these price changes, and did everything we could to ensure they were required, appropriate, and not half-measures. So, unless there are other surprises—like accelerating inflation—we’re good.
And that doesn’t mean we won’t be looking at ways to bring prices down. After all, we’ve done it in the past.
There’s no reason we can’t do it again.
Here’s to happier days!
Last edited:
Jason Stoddard
Sponsor: Schiit Audio
Hey all, I'm going back to the craziness now.
On the plus side:
1. We still have new products coming, some shockingly good and affordable, some maybe just shocking (or industry-redefining?)
2. The first of the shockingly good stuff is coming soon.
3. The first of the affordable stuff is coming soon.
4. We continue to improve things, and we are seriously working on reducing prices wherever we can.
On the minus side:
1. There's been sooooooooo much disruption in our PCB assemblers' ability to make products that everything has gone out 4 weeks or so from when I predicted. So when I say "February" and Marv laughs and says "March," really think more like "April."
2. There's still sooooo much supply disruption that we are still staring at some significant shortages, though this is better than last week, when I thought I'd be in the middle of full redesigns on 12 products again (microprocessors, argh). There's still some ugly stuff to deal with, but it's not the apocalypse. Still, something bad can pop up anytime.
Thanks to all for their patience, and I hope to have happier news soon!
On the plus side:
1. We still have new products coming, some shockingly good and affordable, some maybe just shocking (or industry-redefining?)
2. The first of the shockingly good stuff is coming soon.
3. The first of the affordable stuff is coming soon.
4. We continue to improve things, and we are seriously working on reducing prices wherever we can.
On the minus side:
1. There's been sooooooooo much disruption in our PCB assemblers' ability to make products that everything has gone out 4 weeks or so from when I predicted. So when I say "February" and Marv laughs and says "March," really think more like "April."
2. There's still sooooo much supply disruption that we are still staring at some significant shortages, though this is better than last week, when I thought I'd be in the middle of full redesigns on 12 products again (microprocessors, argh). There's still some ugly stuff to deal with, but it's not the apocalypse. Still, something bad can pop up anytime.
Thanks to all for their patience, and I hope to have happier news soon!
All good Jason and well understood. Actually the Modi price is fair just calculating the inflation throughout these years. One question if you don't mind for us across the pond. What is the point of having a UK website if everything is always out of stock?
FLTWS
Headphoneus Supremus
And pray the electric doesn't go out.This winter has been mild for me till now, we are in the storm that goes from Texas to Maine. We let our dog out the deck door this morning and he proceeded to go rolling down the steps like a hotdog because of the ice. I barely got home last night before the temperature dropped and all of this started, time to stay indoors and stay safe.
Also a time to enjoy the warmth of Class A tube amps.
Canada Goose. SoCal must be one of the few places where their store has a special freezer room where you can try their jackets in their true element.
Users who are viewing this thread
