Why are Little Dot amps so inexpensive ?
Feb 25, 2010 at 4:42 PM Post #136 of 170

Steve Eddy

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Quote:

Originally Posted by spookygonk /img/forum/go_quote.gif
Mate, that's not a Photoshop.
eek.gif



atsmile.gif


es
 
Feb 25, 2010 at 8:47 PM Post #137 of 170

feifan

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I fail to see the humor in photo avatars of individuals who are obviously deformed (if they are actual photos). I also don't see the humor in depicting Rosie O'Donnell as a hairy male.

Some may disagree with Ms. O'Donnell's politics and views, but the vast majority of them don't attack her looks. I, for one, admire her for her gift for acting and her courage to do what she feels is right. She is, in my opinion, very bright and caring.

Head-fiers as a whole are very intelligent, and we don't need to stoop to a level of humor that's insensitive at best.

Peace.
 
Feb 25, 2010 at 10:37 PM Post #138 of 170

ford2

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Quote:

Originally Posted by feifan /img/forum/go_quote.gif
I fail to see the humor in photo avatars of individuals who are obviously deformed (if they are actual photos). I also don't see the humor in depicting Rosie O'Donnell as a hairy male.

Some may disagree with Ms. O'Donnell's politics and views, but the vast majority of them don't attack her looks. I, for one, admire her for her gift for acting and her courage to do what she feels is right. She is, in my opinion, very bright and caring.

Head-fiers as a whole are very intelligent, and we don't need to stoop to a level of humor that's insensitive at best.

Peace.




confused_face_2.gif
 
Feb 25, 2010 at 11:22 PM Post #140 of 170

feifan

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Quote:

Originally Posted by ford2 /img/forum/go_quote.gif
confused_face_2.gif



Ford2, my apologies if I've misinterpreted your (or anyone else's) intent or part re the Rosie photo.
 
Feb 26, 2010 at 7:27 PM Post #141 of 170

shabta

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This thread has been an interesting and yet dissatisfying read. And we seem to have gotten pretty far off the track of why little dot amps are so inexpensive.

This post will likely continue the pattern of dissatisfaction and distraction, but perhaps a bit of data combined with some anecdotes will inch us further along.

As to the issue of child labor, sadly it is nearly impossible to buy any high teach equipment that is free of the efforts of child labor. Much of the worlds ( a quarter I think) cobalt ends up in high tech gadgets (cell phones, ipods and yes Head-Fi equipment). In the congo where a significant amount of copper is mined estimates have ranged to over 50,000 children are involved in the mining. The mining industry as a whole is rife with well documented human rights abuse throughout Africa.

So what about china?
China has many well documented cases of Child Labor and Human rights abuse. Use google, you’ll find lots of reports. One of the greatest areas is in the assembly of electronic equipment such as PCB boards etc. Another problem is flagrant violations of the 40 hour/week law. Most factories push their workers to 70-80 hours per week. Many workers have very little leverage. Many factories only pay salary once a year so if you want to quit or make trouble you can lose many months of pay because you may have worked 8 or nine months with three to go before payday. Even if a factory wants to obey the law they can’t. If they go to 40 hours/week they essentially double their salary costs relative to the competition and will soon go out of business.

These kinds of conditions are standard at many of the famous western companies doing manufacturing in china. Google around and you will see documented cases of human rights abuse at Apple factories.

Responsible companies work with manufacturers who are verifiably willing to forgo hiring children and to at least be much better than average in their labor practices. These companies believe that in the long run it does mean better quality. And there is some anecdotal evidence that this is true, but I am contractually bound not to share what I know.

So if many of the hi-tech products coming out of China are made by exhausted and/or very inexperienced (young) workers how come some products are so much higher quality than others? For example, ipods are historically better quality are better than Telcast. That has to do with process control and engineering expertise. I won’t bore you with a lecture on Total Quality Management or Design for Test (especially in circuit design), but that is where the dividing line likely is.

As a high tech executive in one of the world’s biggest software companies I established a large scale engineering effort in china…. Many of us in Silicon Valley who did this didn’t do it because salaries were low, although that helped. We did it because it was getting harder and harder to find competent engineers in the US and Europe. There are lots of great engineers in those countries but the high-tech industry grew so fast and the war for talent became so intense, we needed to diversify the talent pool. Over time, just as gold now costs about the same where ever you go, so too will the cost doing engineering work be the same wherever you go.

The cost is not that far apart even today. Salaries have skyrocketed, and although the engineers I hired were amazingly bright and worked hard, they were inexperienced. That inexperience costs money. Experience is why Jan Meier living in Germany can make an amp that in Skylab’s recent review compared very favorably to the Audio-GD Phoenix, a Chinese Amp costing more than double. Same goes for quality ( I am not implying anything bad about Audio-GD, I like my Compass ).

So Apple with its incredible engineering and process management expertise and huge economies of scale can deliver higher quality products than a less experienced Chinese company.

I certainly wish that all high tech companies would be much more transparent about their manufacturing and materials procurement practices. This would certainly lead to more reliable products and less human suffering, even for us relatively rich consumer.

So it is a legitimate question how come little dot amps are so inexpensive. And it is easy to see that the cost of parts which don’t differ much from place to place make it a near certainty that LD is cutting important corners. No matter how nice a sales person the company is run by. Although by the time your introductory budget priced tube amp blows you will be on to something else... I hope.
 
Feb 27, 2010 at 1:06 AM Post #144 of 170

shabta

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Yes, there really is a 40 hour a week law in china for hourly workers.
 
Feb 27, 2010 at 1:35 AM Post #145 of 170

sun88489889

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I do not think it is mainly caused by the cheap labor in China. A lot expensive stuff are made in China, aren't they?
The little dot does not bear any marketing cost. That is a huge part of the price. And no retail cost....
I know the little dot are designed by a guy named Yang solely...
I think that is why...
 
Feb 27, 2010 at 10:37 PM Post #146 of 170

applegd

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Just my 2 cents.

Quote:

Originally Posted by shabta /img/forum/go_quote.gif
So what about china?
China has many well documented cases of Child Labor and Human rights abuse. Use google, you’ll find lots of reports. One of the greatest areas is in the assembly of electronic equipment such as PCB boards etc. Another problem is flagrant violations of the 40 hour/week law. Most factories push their workers to 70-80 hours per week. Many workers have very little leverage. Many factories only pay salary once a year so if you want to quit or make trouble you can lose many months of pay because you may have worked 8 or nine months with three to go before payday. Even if a factory wants to obey the law they can’t. If they go to 40 hours/week they essentially double their salary costs relative to the competition and will soon go out of business.

These kinds of conditions are standard at many of the famous western companies doing manufacturing in china. Google around and you will see documented cases of human rights abuse at Apple factories.



Objective view base on facts.

I trust my eye but not always the second hand info. Second hand info could be truth, but also it could be bended facts, incomplete/pre-filtered info, then I could be misled to form inaccurate conclusion.

A big tree could have thousands leaves on it. If I put my eye close enough, my eye can only see one leaf. For some people, if this leaf is good, he/she says good, if the leaf is bad, he/she forms the view the whole tree is bad. Whatever he/she saw is truth for one leaf but that truth does not represent the overall picture for a big tree.

For this case, the key is whether Child Labor reported by news media represents the whole business practice in china. Whether 1%, 10%,50% or 99%? Base on my first hand info, most of the formal companies do not do this. There are thousands of western companies setup the business branch in China, why only very few companies such as Apply were reported by news? Why not IBM, HP, CISCO, Motorola, Mouser China(if you are DIYer and use Mouser frequently) etc?

Also for your view "Most factories push their workers to 70-80 hours per week. Many workers have very little leverage. Many factories only pay salary once a year so if you want to quit or make trouble you can lose many months of pay because you may have worked 8 or nine months with three to go before payday.", this is not true as a big picture for all business practices in China if you really have first hand info. My view is formed base on my first hand experiences from visiting the cities spread in about 80% of provinces in China because of business trips.


Quote:

Originally Posted by shabta /img/forum/go_quote.gif
So if many of the hi-tech products coming out of China are made by exhausted and/or very inexperienced (young) workers how come some products are so much higher quality than others? For example, ipods are historically better quality are better than Telcast. That has to do with process control and engineering expertise. I won’t bore you with a lecture on Total Quality Management or Design for Test (especially in circuit design), but that is where the dividing line likely is.

So Apple with its incredible engineering and process management expertise and huge economies of scale can deliver higher quality products than a less experienced Chinese company.



FYI. The factories who actually manufacture the IPOD do not owned by Apple. Basically they are Chinese companies who got the OEM orders from Apple and just manufacture/assemble IPOD per Apple's Spec/Design.

Quote:

Originally Posted by shabta /img/forum/go_quote.gif
As a high tech executive in one of the world’s biggest software companies I established a large scale engineering effort in china…. Many of us in Silicon Valley who did this didn’t do it because salaries were low, although that helped. We did it because it was getting harder and harder to find competent engineers in the US and Europe. There are lots of great engineers in those countries but the high-tech industry grew so fast and the war for talent became so intense, we needed to diversify the talent pool. Over time, just as gold now costs about the same where ever you go, so too will the cost doing engineering work be the same wherever you go.

The cost is not that far apart even today. Salaries have skyrocketed, and although the engineers I hired were amazingly bright and worked hard, they were inexperienced. That inexperience costs money.



For Hi-Tech business, this is very true. For some companies in Telecom industry as example, in US, cost per headcount per year is roughly about 130K USD. In China and India, it is about 60K USD. We can see offshoring can save money but the saving is not 70K USD per headcount per year. From business standpoint, we have to think about execution and efficiency. Assume the team we hired in China/India is very stable and they are really best in best people(because of huge population there), we have to give them time to gain experience and master the skill set needed for the job which means relatively lowered execution and efficiency.


Quote:

Originally Posted by shabta /img/forum/go_quote.gif
So it is a legitimate question how come little dot amps are so inexpensive. And it is easy to see that the cost of parts which don’t differ much from place to place make it a near certainty that LD is cutting important corners. No matter how nice a sales person the company is run by. Although by the time your introductory budget priced tube amp blows you will be on to something else... I hope.


Comparing to regular consumer electronic, for the headphone amp business, any way the part cost is relatively low in the overall cost structure.

Besides the part cost, what else? Labor cost for marketing, ordering parts(SCN), soldering, testing, customer service, R&D and system engineering etc. If the labor cost is significantly lower, the overall cost is very low.
 
Feb 27, 2010 at 11:06 PM Post #147 of 170

shabta

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Quote:

Originally Posted by sun88489889 /img/forum/go_quote.gif
I do not think it is mainly caused by the cheap labor in China. A lot expensive stuff are made in China, aren't they?
The little dot does not bear any marketing cost. That is a huge part of the price. And no retail cost....
I know the little dot are designed by a guy named Yang solely...
I think that is why...



No doubt LD saves some money through very low marketing costs, but so do somewestern head-fi companies. And not having middle men also makes a difference and again we see that outside of china.

What we don't often see is people selling amps way below what it costs to actually buy quality components.

As one esteemed head-fier pointed out the cost of quality components (made in china or not) have certain costs. So perhaps LD is engaged in volume purchasing and/or mining activities that drastically reduces the cost of the parts, or some kind of revolutionary manufacturing capability.

I also admit I might be missing something. But as I weeded through the various arguments posited on this thread that was the one point which no one seemed to be able to refute. Instead the argument devolved into hurt feelings about accusations of child labor and claims that low per unit profit expectations could overcome the cost of parts limitation. Those arguments like the one you pose left me unconvinced.
 
Feb 27, 2010 at 11:46 PM Post #148 of 170

shabta

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Quote:

Originally Posted by applegd /img/forum/go_quote.gif
For this case, the key is whether Child Labor reported by news media represents the whole business practice in china. Whether 1%, 10%,50% or 99%? Base on my first hand info, most of the formal companies do not do this. There are thousands of western companies setup the business branch in China, why only very few companies such as Apply were reported by news? Why not IBM, HP, CISCO, Motorola, Mouser China(if you are DIYer and use Mouser frequently) etc?



Also for your view "Most factories push their workers to 70-80 hours per week. Many workers have very little leverage. Many factories only pay salary once a year so if you want to quit or make trouble you can lose many months of pay because you may have worked 8 or nine months with three to go before payday.", this is not true as a big picture for all business practices in China if you really have first hand info. My view is formed base on my first hand experiences from visiting the cities spread in about 80% of provinces in China because of business trips.




This argument is specious. Just because you never witnessed anything like i described doesn't mean anything more than you did not witness it. It reminds me of people who used to go to south africa during apartheid and claimed that actually black africans were treated fine and there were few signs of racial predjudice.

Many of the factories will quite obviously hide there practices from businessmen coming from the west. After all many of them have a lot of practice hiding it from the government as well. I certainly saw first hand factories do this. Actually most of the companies you named were customers of mine. I did not speak about specifically them for that reason. The only reason I mentioned apple is because it is extensively reported in public, so I am not betraying any proprietary information.

Some of the organizations who are reporting on abuse are based in china and have no agenda except to help people and are much better than probably either you or I at seeing past what factory owner want us to see. That is there expertise after all.

You and I are business men looking primarily at maximizing profit and frankly human resource issues are unfortunately too often relevant in so far as they affect the bottom line. That is why most countries have labour laws, to keep guys like us in check.

Some of my peers at other companies contracting manufacturing in china did feel they got better results by making sure that workers at the factory were treated mcuh better than average. It is also true that unlike apple some western companies have chosen not to contract out their manufacturing and some of those do have reasonably good employment practices. And I suspect it means they have a higher quality workforce worth any extra expense incurred.

I admit I have no idea how rampant the problem is, and I have retired (at least for now) from the industry so my information is out of date. And in some areas of the country the gonvernment is doing what it can. But there sure was a lot of smoke when I was their.


Quote:

Originally Posted by applegd /img/forum/go_quote.gif
Comparing to regular consumer electronic, for the headphone amp business, any way the part cost is relatively low in the overall cost structure.

Besides the part cost, what else? Labor cost for marketing, ordering parts(SCN), soldering, testing, customer service, R&D and system engineering etc. If the labor cost is significantly lower, the overall cost is very low.




The problem is no one including you has explained the flaw in Uncle Erik's logic about cost of parts.
 
Feb 28, 2010 at 1:13 AM Post #149 of 170

jp_zer0

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What I think should be done here is to separate the Ethical debate of child labor, Human rights and the Economics debate about the price of LD amps.

I think any conclusion as to the reasons behind LD amps' lower prices will be at least somewhat conjectural. Their narrower business details being unavailable to us.

What is also very conjectural is the Ethical debate, for very much the same reason as the Economics arguments will be conjectural.

One part of the Ethical debate I find invalid is the moral responsibility argument. Any child labor involved in LD's contractors is of no moral responsibility of LD, nor of us buying the end-products. I think any societal issue is an issue of that particular society only. (I mean society broadly, any association of individuals) Even thinking utilitarian, refusing to do business with societies having a record of poor working conditions will only further exacerbate the problem. Lower wages, more hours, more unemployment and even more inevitable abuses. This sort of moral revenge defeats its own purpose.

In all, I say let the economy of business run its course, let societies and individuals develop their own sense of Ethics. Do not limit the opportunities of people who have so few, look at eastern products with an open mind and enjoy your LD amps.
 
Feb 28, 2010 at 1:37 AM Post #150 of 170

applegd

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Quote:

Originally Posted by shabta /img/forum/go_quote.gif
The problem is no one including you has explained the flaw in Uncle Erik's logic about cost of parts.


shabta, Thanks for sharing your view! In 1990, I started involving in the business in China, we spent 20M GBP to setup the first joint venture in Shanghai. At that time, I still remember the official work hours for government offices and companies was from 8:30AM to 5PM, Monday through Saturday. Years later, that was changed to 8:30AM to 5PM, Monday to Friday.

For relatively small headphone amp business, base on what I observed, most of the chinese amps(designed,manufactured in China) are entry to mid range. The keyword for their amp business is performance/price ratio. Personally I don't think they need to consider top quality parts with big price tag but this does not mean they have to use crappy parts. They need parts to meet desired performance but may not have big brand name to reduce cost.

When I buy these chinese amps, what I care most is the performance/price ratio. If what I get is at least worth what I pay for, I am OK.
 

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