Is it possible for a high end manufacturer to overprice their goods?


Having just read the interesting and hyperbole laden review by RH of the new Rockport Orion speakers in the latest issue of The Absolute Sound, one thing struck me..

is it possible in the high end for a manufacturer to overprice their product ( doesn’t have to be a speaker, but this example comes to mind)? I ask this, as the Orion is priced at $133k! Yes,a price that would probably make 99% of hobbyists squirm. Yet, the speaker now joins a number of competitors that are in the $100k realm. 
To that, this particular speaker stands just 50.3” tall and is just 14.3” wide…with one 13” woofer, one 7” midrange and a 1.25” beryllium dome ( which these days is nothing special at all…and could potentially lead to the nasties of beryllium bite).

The question is…given this speakers design and parts, which may or may not be SOTA, is it possible that this is just another overpriced product that will not sell, or is it like others, correctly priced for its target market? Thoughts…

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@sokogear  While there certainly is a marketing reason behind this strategy ( the halo effect), I believe it is also self- defeating in the long run. For the reason I stated in my last paragraph above. 

 

@james633 Sure, there are a number of more ’entry level’ products for the beginner audiophile, but this is not really the issue. When I first started in this hobby ( decades ago), as a young lad, I was struck by the fact that I could get into the hobby and the cost was similar to what I would have to pay at any large department store, who wanted to sell me an all-in-one off the shelf system ( with very limited ability and quality). BUT, and here’s the thing, I also noticed that in order to step up in the hierarchy of top-flite gear towards the top, I did not have to essentially pay sums that equated to a new house! (like today). That difference ( which I see as Major!) is what I believe is going to put-off most new and young potential hobbyists.

Two things... it's about margin (profitability) and what the

Market will bear. I once consulted for a fairly high-end, reputable and recognized amplifier manufacturer. They were conducting a market study on a proposed $10k pair of monoblocks. The feedback they received was for the quality of amp they manufacturer, most felt that price was "too low" at the time. They decided to price them at $25k and after bringing them to market, they sold quite well.... That said, sometimes it isn't what the may feel is a fair price, but rather what their customer deems fair and worth the value.

Hilde45,

In a word, yes. That is what freedom, free will, and free markets are all about. I'd ask you what we should be allowed to spend on speakers, but maybe we should keep the moral and political discussions on Twitter, not an audio hobbiest website. 

"Bottom line: If you look at only the material cost and direct labor part of a $133k pair of speakers, you will find the speakers over priced."

This is a problem I and others have had with what we consider trolls on Audiogon. They quote the cost of materials and direct labor-so what? There are many other significant costs associated with equipment, particularly electronics and speakers which result in high costs relative to sales price/margins. The tweaks and cabling are where the margins can be huge and can be highly profitable. R&D generally costs the most to make a successful (sonically and economically) tweak. An SR Master Fuse at $595 sales price costs almost nothing to manufacturer but the R&D and/or luck created a masterpiece Fuse. A $22 Acme Fuse is absolutely a bargain compared to a stock 50 cent fuse. The margins are great but the results can also be great (Fuses saved my EAR 864 from resale as well as my Emotiva XDA-1 highly modified/upgraded DAC). I am neither poor nor very wealthy but at the cost of a "high-priced" tweak with high margins, I improved my system much more than paying for an equipment upgrade.

Again, will anyone address the potential problem of obsolescence/inability to repair due to a manufacturer’s bankruptcy?

P.S. I can afford an EAR 912 and already own(ed0 a $9K DAC (COS Engineering  D1v) and have a $150K listening room but chose musically more satisfying equipment regardless of price.