What makes a DAC so expensive?

Some simple rules around development, manufacturing, and marketing:

• All of the above have a fixed and variable costs associations.
• All costs increase exponentially for each gain beyond a certain baseline- picture a hockey stick- this includes development costs, manufacturing costs, and marketing costs. (someone will argue fixed do not, but for additional gains the expertise, techniques, equipment, and segmentation will  be more expensive and specialized.
• As you segment and specialize, the market shrinks exponentially, so absorption will need to be spread across fewer and fewer units; result price/costs goes up at a commensurate rate.
• The higher the price point-due to everything above- the greater the  curb appeal costs- increasing everything just discussed. Most people who will pay the highest end price point will also want the highest end window dressing and usability (think how well a Ferrari with the body design of a Yugo would sell).

All this adds up to the fact you can buy an adequate or even very good DAC for under a couple hundred bucks (maybe even less than $100)  that is in a nondescript metal case with minimal user conveniences. Every incremental advance beyond that the price will go up at a hockey stick rate. This is not unique to Audio.

Djones51 and dromme,
While I support your right to your opinion, I think it is not based in facts beyond your experience. I agree you can get a very good baseline with less expensive DAC’s or for that matter, most other mature technology products. My cheap personal laptop today is under a few hundred bucks and operates better than ones previously costing many thousands.  But, better computers exist at significantly higher dollars. There is a significant increase in value and costs in chasing the incremental gains. These gains may not be important to you- that is the beauty of capitalism- you get a choice. But for those with the means, the supporting technology to take advantage of the incremental gains, and the desire, is it wrong for someone to supply a solution for that need, even if it is beyond the reach of most? I like that segmentation. I like that ability to choose. It gives me hope that someone will produce a product for the few. In this case it is a piece of audio equipment- but it could easily be something much more critical.

Mahjister
You quote Grouchy alot.....never saw him as a philosopher but that was a mistake on my part.

“If you're not having fun, you're doing something wrong.”
― Groucho Marx

I am not a fan of shutting down others voices. DJones is technically correct. The measurements are what they are. The difficulty in refuting his absolutes is that “transparency and measurements” does not always sound so great or the same. I have 2 transports with similar measurements- one I use daily the other is in a box. Why in a box? Because it doesn’t sound as good as the other. The one I use does have much better components. Does it sound better  due to some yet to be discovered attribute? Don’t know, nor do I spend an inordinate amount of time contemplating. I have plenty of technical background but I also have travelled the world extensively and realize that some things buck current science. I also do not believe that big money is the only path to phenomenal anything. Big dollar components can be trumped by better application and synergy of lesser priced components. What’s wrong with audio being a mixture of science and art and magic? Last point, all of us have varying financial means, and similarly varying definitions of audio nirvana. It isn’t a zero sum game where ones win is another’s loss. 

@Listening99

This forum is a microcosm of our larger culture. I appreciate your pursuit of truth- in this case in DACs, but I am guessing based on your writing skills this is standard for you. I would probably thoroughly enjoy a shared skull session on a variety of topics. I do get discouraged when I see the attacks, especially when I believe we all have similar goals and a shared appreciation for music. I am not certain how old you are, and please don’t feel disrespected if I offer some unsolicited advice. Days may seem long, but years will fly by. Chasing the truth too vigorously can rob you of simply enjoying. Peace be with you.