The Art of Value

AR-dodo.jpegWith the RMAF on the horizon I got to thinking about new products - manufacturers are always walking a tightrope - new products need to have more features and better features at the same or a lower price than the old model, but if the new model is too much better than its predecessor a manufacturer risks alienating existing customers by depreciating their components too quickly. The more established a manufacturer becomes, the more locked into taking prior products into consideration when designing new ones.

Yes, manufacturers have a fine line to walk. Incremental improvements must be sufficient to warrant a new model, but if customers sense that a high-tech company is slowing down the pace of technological evolution for marketing or product placement reasons, the cries of "crippleware!" can irreparably damage a company's reputation. Also a lower rate of innovation leaves the door open for competitors to leapfrog your current products.

The usual tendency as a company gets older is their image becomes firmly established and their product line becomes more predictable and less innovative. That's a primary reason why companies start a new companion firms if a product is too far afield from current offerings. This worked well for Harman for many years, with Revel, Levinson, and Lexicon all offering complementary products.

Conrad Johnson tried this with their Motif line (solid state from a company known for tubes), as did Harman with their Levinson spin-off Proceed (semi-affordable gear from the purveyors of high-priced stuff.)

Motif, and Proceed are defunct now. They made decent and competitive products, but weren't successful. Why? Motif suffered from the dual damnations of a "bad" first review in TAS and lack of support from CJ. The message that customers took away was "We made this because we thought we HAD to, not because we wanted to" and customers avoided Motif products like the plague. Proceed did well initially, but as time progressed its niche, above upper mid-fi but below state-of-the-art, proved to be a highly volatile and in the end untenable market position to maintain for any length of time.

What is the "right" path to innovation? I feel the only way for a high-end audio company to remain viable is for it to adapt it's specialty, whatever that may be, to the current and future markets. Peachtree Audio and Wadia are fine examples of companies that have figured out how to expand. Each new product is aimed at a slightly different segment of the marketplace. And instead of "growing" by adding multiple models in the same category, their new products expand their markets without cannibalizing the existing customer base in the process.

As I roam the hallways and rooms of RMAF I'll be looking for new products from companies, both new and old, that offer the greatest level of performance and even more importantly, value. The companies that deliver will succeed, while those that don't will fade away into obscurity.

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