What makes the price of a DAP?
Feb 8, 2019 at 12:42 PM Thread Starter Post #1 of 9

ClementNerma

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(I don't know if this is the right place for such a thread, if not feel free to move it)

So, today I was looking for great DAP in the sub-300$ range, and I ran into a review about the Cowon Plenue V which stated it was using a CS43131 chip (a DAC + amp combo). As written in this same review, this chip was also part of the Samsung Galaxy S8 and S9 Exynos version.

As this chip made its way up to smartphones, that means it doesn't cost a fortune - certainly not 50 or 100 bucks, else it wouldn't have been included in such models. I also saw it was sold for about 15 dollars on this website.

The sames goes with the Fiio X5 3rd (a bit old, but still good for its price point) which uses a double AK4490 (still a DAC + amp combo), but sold on the same website for only 5 dollars.

So, I wonder: why makes the price of a DAP? Of course, there's R&D, marketing, materials used to get the best build quality, processor, screen etc. But why do the Plenue V (which is sold 325 € in France) only use a 15$ chip and not a more high-end one? And also, why don't the S8 and S9 Exynos don't sound as good as the Plenue V, apart from the software sound optimization? I really don't understand these points.

Thanks in advance for your answers :)
 
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Feb 8, 2019 at 12:51 PM Post #2 of 9

Whitigir

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If I give your flour, eggs, vanilla, chocolate, sugar, shortening, heavy whip cream, could you make me a birthday cake ? Then decorate it ? I will have to specifically order for it to taste good to my preferences.

Most of all, I want you to make it all for the cost of the ingredients....

How does that sound ?

I am tired of people who is judging a device upon parts cost and so on.
 
Feb 8, 2019 at 12:55 PM Post #3 of 9

ClementNerma

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If I give your flour, eggs, vanilla, chocolate, sugar, shortening, heavy whip cream, could you make me a birthday cake ? Then decorate it ? I will have to specifically order for it to taste good to my preferences.

Most of all, I want you to make it all for the cost of the ingredients....

How does that sound ?

I am tired of people who is judging a device upon parts cost and so on.

I'm on the same board, you know. As I said, I included webmarketing, R&D, and - even if not stated, that's I think evident - margins. Even if Cowon or Fiio make, let's be crazy a 50% margin, how to justify that the Texas Instrument chip used in the 529€ Cowon Plenue R is sold for under 8€?

And, what's the point of buying a 325 € DAP if your smartphone can get the same job done? There's clearly something I didn't get here...

EDIT : To take an even more clear example, the Sony NW-WM1Z DAP, which is sold for 3299 € in france, uses a 12$ chip...
 
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Feb 8, 2019 at 12:56 PM Post #4 of 9

Whitigir

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So now, to answer the question. What contribute toward the pricing of a DAP ?

1/ the research and development

2/ the tuning process

3/ the engineering and implementation

4/ the brand

5/ the performances upon technical measurements

6/ the meticulous parts and components that went into making it

Most of the time, the higher tier the components, the more expensive the DAP is to be. Could it sound good ? Could it sound bad ? No one know, until listening to it.

However, the most important factor is that the pricing is MSRP, it means Manufacturers Suggested Retail Prices. That means the company that developed and produced the DAP has assigned a Pricing toward it. That is their rights.

From customer point of views, it depends on how much experiences you have had, and what you really prefer, that is all that matter. If a consumer don’t like the pricing, they just don’t buy it, period. Even if the DAP is made off a meteorite materials, and DAC of alien technology
 
Feb 8, 2019 at 1:01 PM Post #5 of 9

ClementNerma

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So now, to answer the question. What contribute toward the pricing of a DAP ?

1/ the research and development

2/ the tuning process

3/ the engineering and implementation

4/ the brand

5/ the performances upon technical measurements

6/ the meticulous parts and components that went into making it

Most of the time, the higher tier the components, the more expensive the DAP is to be. Could it sound good ? Could it sound bad ? No one know, until listening to it.

Thanks for your answer :wink:

Okay, so now I think I understand better: according to your tellings, the R&D part is a huge a part of a DAP's price, is that right?

Also, this means that even a 15$ chip can perform incredibly well if it's handled the right way?
 
Feb 8, 2019 at 1:02 PM Post #6 of 9

Whitigir

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So how does a company assign an MSRP ?
Economy 101

1/ supply VS demand . What do the consumers demand from a DAP ? Newest DAC ? One of a kind ? What else is out there with similar technology ?

2/ profit margin. With cost of X components, how much is the Profit margin to the Y products ?

3/ Servicing. Assume and assign a portion of the Servicing into the warranty for returned products, from dealers, consumers, demo units....etc....etc....and after sale services

4/ the length of a product to be serviced and supplied with current parts. In modern times, most of the time, people trash their stuff if something is out of warranty and not working. But for other countries, the supplies toward fixing a device have to be given some time. Take this into account

5/.....long term investment of investors, the markets....etc....etc...

So, when you considering all that ....it is where the pricing for a DAP is to be.
 
Feb 8, 2019 at 1:04 PM Post #7 of 9

ClementNerma

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So how does a company assign an MSRP ?
Economy 101

1/ supply VS demand . What do the consumers demand from a DAP ? Newest DAC ? One of a kind ? What else is out there with similar technology ?

2/ profit margin. With cost of X components, how much is the Profit margin to the Y products ?

3/ Servicing. Assume and assign a portion of the Servicing into the warranty for returned products, from dealers, consumers, demo units....etc....etc....and after sale services

4/ the length of a product to be serviced and supplied with current parts. In modern times, most of the time, people trash their stuff if something is out of warranty and not working. But for other countries, the supplies toward fixing a device have to be given some time. Take this into account

5/.....long term investment of investors, the markets....etc....etc...

So, when you considering all that ....it is where the pricing for a DAP is to be.

I didn't thought this way... Now everything is more clear :wink:

Thanks a lot for your answers :)
 
Feb 8, 2019 at 1:04 PM Post #8 of 9

Whitigir

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Thanks for your answer :wink:

Okay, so now I think I understand better: according to your tellings, the R&D part is a huge a part of a DAP's price, is that right?

Also, this means that even a 15$ chip can perform incredibly well if it's handled the right way?

R&D is depend on what targets the companies are trying to achieve. Using off the shelves parts, all they need is to meet the engineering parameters of the products (it is common). If a company is aiming to break ground and design something, then patent it, then it is unique, and protected (this is the most expensive)

The most expensive expense for any company is marketing and dealer networks, then second to it is the after sale and warranty services
 
Feb 8, 2019 at 1:06 PM Post #9 of 9

ClementNerma

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R&D is depend on what targets the companies are trying to achieve. Using off the shelves parts, all they need is to meet the engineering parameters of the products (it is common). If a company is aiming to break ground and design something, then patent it, then it is unique, and protected (this is the most expensive)

The most expensive expense for any company is marketing and dealer networks, then second to it is the after sale and warranty services

I didn't know that either. Well, I have learnt something today :)
 

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