TECHWEEK
Hi-Fi and High-End audio equipment is becoming more expensive all over the world, and has been for quite some time. Everywhere, seasoned audiophiles look with bewilderment at the increasing demands of manufacturers every year. So why did the price tag on what were once relatively affordable components and speaker systems fly off into space and have no intention of returning to Earth?
Experienced audiophiles still remember the most popular categories of Hi-Fi equipment in the 1990s – amplifiers, CD players and speaker systems for $500. Anything that cost more than $1,000 was already perceived as a very serious piece of equipment, not accessible to everyone, and people even became legendary about more expensive models.
It is noteworthy that the assortment of some brands still contains the same models of speaker systems and components that were produced under the same names 20 years ago, but today they cost (albeit in updated versions) 2.5-3 times more expensive. Of course, we cannot discount inflation and rising production costs, but they can be responsible for a maximum of 100% of the rise in prices, but not 300%.
However, if the rise in price of budget equipment can still be somehow accepted, even if not completely, then in the High End sector something simply unimaginable is happening. For some items, price increases are up to 1000% and are not going to stop. It is impossible to believe that the cost of producing speaker systems costing 10,000 euros has increased tenfold in 10 years. What caused this growth, and can we hope for a change in the trend?
There are several main reasons for such a steady and sharp rise in the price of High End. The first, and most obvious, is an increase in the amount of free money in the world and, as a consequence, an increase in effective demand. This may not be obvious to everyone, especially those of us who live on one salary, but the constant increase in wealth in the world is an indisputable fact, and it leads to the fact that the same product can be sold for much more today. None of the producers will refuse additional profits.
This is also evidenced by the constant increase in the number of manufacturers of expensive audio equipment; just look at the list of participants in specialized exhibitions. Both in Munich and at other venues, especially in Asia, the number of exhibitors has grown significantly, and if the budget home audio segment is really shrinking, the choice of exotic components with a price of many tens and even hundreds of thousands of dollars or euros is only expanding.
Moreover, many traditional participants in the High End market correctly assessed the opening prospects and simply raised the price tag on their models without any regard for inflation. One of the famous British manufacturers of speaker systems – this was about ten years ago – simply quadrupled the cost of its top-end speakers. And he answered all the puzzled questions of Western journalists with utmost frankness: “I have a certain standard of living that I need to maintain.”
Another reason for rising prices is, oddly enough, the dominance of inexpensive wireless speakers, sound bars and headphones. In fact, this type of audio device has gradually occupied the niche of Hi-Fi and budget home theaters, offering customers good sound and modern functionality. Many of the traditional quality audio manufacturers have tried to compete with them – and failed. Since competing on price turned out to be futile, the natural solution is to migrate towards high-margin goods, where you can continue to earn the same money despite an actual reduction in sales.
Is there any hope for the situation to improve? Yes, albeit a small one. An example is the market for televisions, as well as portable audio, which today is largely controlled by manufacturers of televisions, headphones, Hi-Res players and amplifiers from the Middle Kingdom. Of course, the size of this market is much larger than the market for traditional audio components, but nothing prevents Chinese Hi-Fi manufacturers from repeating the success of their colleagues. Moreover, they are already actively and very successfully working towards creating exclusive amplifiers, vinyl players and speaker systems, while the prices for their products are 2-3 times lower than those of Western brands with comparable quality.
On the other hand, if they manage to impose competition on Western brands in all categories of audio equipment, then the latter will have no choice but to raise their prices even more. And all the components produced in Europe, the USA and Japan will finally move into the category of exclusive goods for super-rich buyers, turning into the Ferrari and Rolls-Royce of the audio market.
