Bang & Olufsen Struggles, As Danish Company Moves To Mass Consumer Market To Get Traction
Bang & Olufsen has spent years trying to convince consumers that their so called top end gear was the best, they even tried unique Danish designs to lure customers and at one stage that they moved into the TV market using a variety of third part panels, this all proved difficult for the Danish Company who is trying to use a variation of their name to get into the mass consumer market.
In Australia Company executives have not returned our calls, instead the Company are using PR spin doctors, as they desperately try to carve a position out in the consumer market where Companies like Sennheiser, Bose, Sony and the likes of Harman International a Company that is now owned by Samsung are delivering significantly superior products.
The Company has virtually admitted that their top end Hi Fi strategy is unprofitable and that they will eventually book most of their sales from headsets, portable speakers and computer-sound technology instead of their overpriced sound gear and $25,000 TV’s gear which in Australia is often double the price of overseas markets.
B&O Play is the brand that the Danish Company is trying to get up and if their latest noise cancelling Bluetooth headphones are anything to go by they will struggle.
Not only are they clumsy and big they cannot be easily folded for use on an aircraft where a great deal of noise cancelling headphones are used, both Bose and Sennheiser will tell you that.
B&O Play generated 43 percent of the group’s revenue last quarter, compared with 57 percent for the Bang & Olufsen category.
The Company has even resorted to cutting deals with LG to stick their name on the back of the Companies V20 smartphone, LG rejected the brand for their top end $13,000 OLED TV which comes with an LG soundbar.
Play is expected to expand as much as 30 percent in the 12 months ending May 31, versus the “low single-digit” growth for the master Bang & Olufsen brand.
Recently Bang & Olufsen who are seriously into premium prices and unique designs introduced BeoSound Shape to try and generate interest in their sound technology which is not taken seriously by audiophiles.
BeoSound Shape is a modular speaker system designed to live on your wall and as my wife said, “It’s a Monty dust collector”
B&O wants to challenge the notion that one size fits all, as a result they have designed a system that is scalable to fit rooms both large and small. The idea is also to move music away from the traditional hi-fi setup.
Sonos have been doing this along with Bluesound and Heos by Denon without the need for wall art.
And like all things associated with B&O the new kit is expensive with a start price of over $7,000.
With the latest B&O incarnation one can arrange the panels in any shape you like, and you get to choose the types of cloth and their colours too: regular speaker grille cloth or fancy wool from Danish textile house Kvadrat.
Each amplifier panel has eight 80W Class D amplifiers and can drive four speaker panels, you can also daisy-chain them for a huge system with a maximum of 11 amplifiers and 44 speakers. The speaker panels are a closed-box design with a 13cm woofer and a 2cm tweeter.
The BeoSound Shape offers dual-band Wi-Fi and its streaming skills include Google Chromecast, Apple AirPlay, Spotify Connect, plus QPlay for the Chinese market.
Some sound experts claim after seeing the new B&O offering that having so many individual speakers might result in something that “sounded a bit chaotic” and “The top end to be a little overactive”.
Trusted Reviews said “This system isn’t for the majority. This isn’t for hardcore hi-fi enthusiasts, who – for the same money – could build a more impressive-sounding traditional system”
The mid-range takes centre stage, literally, as B&O’s digital processing intentionally pushes voices towards the centre of any BeoSound Shape setup. It’s called the ‘band on wall’ concept and it feels a little odd at first, but it does work.
Chief Executive Officer Henrik Clausen told Bloomberg recently “We used to be a company that had the Bang & Olufsen segment as our main business and the B&O Play business as a start-up, but now we’re at a stage where both are significant in size”.
He added “Pure mathematics indicate that over time the two business units will become equal in size and, if the development continues, B&O Play will become the relative largest.”
He admitted that Bang & Olufsen sales plunged abruptly after the financial crisis at B&O while revenue from the Play range, introduced in 2012, has been growing rapidly in recent years.
For the Australian operation, the arrival of Amazon is set to impact their relationship with retailers. ChannelNews could source a pair of the Companies H9 B&O Play noise cancelling headphones for $134 cheaper than buying at a local retailer where the same headphones are selling for $799 Vs US$499 on Amazon Prime. Converted to Australian dollars the price is $665.
The success at B&O Play, resulted in Bang & Olufsen reporting pre-tax profit of 31 million kroner ($4.4 million) in the fiscal second quarter compared with a loss of 23 million kroner a year earlier.
The company forecast a 15 percent sales increase this year.
The CEO said his focus is to make sure the company “can have a future as an independent Bang & Olufsen.”