Magico Q3 pice increase - why?

ack · Dec 21, 2014

My understanding is that ONLY this speaker is getting a *significant* price increase come Jan 1 2015. Without a good explanation, my initial reaction is one of utter disappointment. I researched the cost of aluminum the last 5 years, and other than a slight peak in 2011, it has remained fairly constant, now back at 2010 levels; but of course, I am not sure about the specific type of aluminum they use. Is it the cost of driver manufacturing? The crossover? It could be typical accumulating cost-to-manufacture increases over the years, that have been absorbed for a while. While I can appreciate not putting out a marginal "Mark II" version with a corresponding price increase, is this really now a roughly $50K speaker

the way other competing products questionably are???

nirodha · Dec 21, 2014

ack said:
My understanding is that ONLY this speaker is getting a *significant* price increase come Jan 1 2015. Without a good explanation, my initial reaction is one of utter disappointment. I researched the cost of aluminum the last 5 years, and other than a slight peak in 2011, it has remained fairly constant, now back at 2010 levels; but of course, I am not sure about the specific type of aluminum they use. Is it the cost of driver manufacturing? The crossover? It could be typical accumulating cost-to-manufacture increases over the years, that have been absorbed for a while. While I can appreciate not putting out a marginal "Mark II" version with a corresponding price increase, is this really now a roughly $50K speaker the way other competing products questionably are???

3 key words always pop up in my mind when I think of Magico: innovation, quality and money...mmm....funny how the mind works

Elberoth · Dec 21, 2014

Alon Wolf once told me that the Q3 is the speaker with the least profit marigin in their range. Which makes sense, as the Q5 is only slightly more expensive to manufacture, and yet it costs almost 50% more.

They probably decided to equalise the profit marigin they have on this speaker with the rest of the range.

cannata · Dec 21, 2014

ack said:
... is this really now a roughly $50K speaker the way other competing products questionably are???

Still fair quite well with the competition at $50K. How about an Alexia, with SB Acoustics drivers (https://www.madisoundspeakerstore.c...-acoustics-sb17nrxc35-8-uc-uncoated-cone-6.5/) and Solen XO parts? Or a YG Kipod, a mere 2 way with a small sub. All this just makes me realize what a bargain my S5 are

andromedaaudio · Dec 21, 2014

i agree with you that the magico ones do seem to have more enginering behind them , but this company specializes in LS unitmanufacturing , and boy do they sound natural , spending money doesnt automatically give better sound , if that was the case i d be still using Thiel accuton diamond drivers (or ceramic)
Taken from the SB acoustics website :

The design considerations have been the same for the midwoofers. For the midwoofers we have selected the cone material we found to have the most natural sound character. For each of the midwoofers, we have carefully chosen the cone weight, as this is also a very important parameter in the pursuit of a natural and balanced sound character.

What s wrong with SB acoustics :

DSC_0210 by andromeda61, on Flickr

cannata · Dec 21, 2014

andromedaaudio said:
i agree with you that the magico ones do seem to have more enginering behind them , but this company specializes in LS unitmanufacturing , and boy do they sound natural , spending money doesnt automatically give better sound , if that was the case i d be still using Thiel accuton diamond drivers (or ceramic)
Taken from the SB acoustics website :

The design considerations have been the same for the midwoofers. For the midwoofers we have selected the cone material we found to have the most natural sound character. For each of the midwoofers, we have carefully chosen the cone weight, as this is also a very important parameter in the pursuit of a natural and balanced sound character.

By now I learned to correlate Magico engineering capabilities and their end results sound quality. In Magico case, the correlation is concise (I use to own the example speaker with SB drivers, and looking back, I can list many things that were wrong with it). Assuming you know what to do with them, having better drivers will yield better sound. As a part time “speakermanufacturer”, you should understand, for example, why a true pistonic, well damped cone will be better than a paper pulp, or polypropylene one. It will also be MUCH more expensive to make (and don’t give me Accuton as an example, they are pistonic alright, but are not damped and therefore ring like a bell). Again, all things equal, better drivers will typically be more expensive then lesser one, such life (wait till you hear the MPro, even more expensive drivers then in the Q, and the sound to go alone with it

). However, that is not the point here. I was just pointing out to similar products “true" value proposition. As I said in a different post, we all have the right to like bad sound, at any cost we wish to pay for it

Joe Whip · Dec 21, 2014

Perhaps because the speakers are in demand ad they believe they will be able sell them at the higher price. All of high end audio is getting more and more expensive, insanely so.

caesar · Dec 21, 2014

Simple answer: High end audio is a luxury industry and it is hard to judge quality of “experience goods” objectively. And just like in other parts of the luxury industry (clothing, perfume, cosmetics, etc.), companies raise prices exponentially, claiming expensive labor and parts. Our wives pay $35 for a tube of lipstick and $250+ for a bottle of perfume. It makes them happy. So why not pay more for speakers?

Music through expensive luxury speakers makes us feel extra good. And luxury goods convey status and a pampered life. If you are already paying $40K, what’s another $10K? A $50K speaker has more mystique than a $40K speaker. High prices don’t deter. Instead, they convince the consumer the product is worth having.

Plus, those guys who will pay more for the Q3 will feel justification because the price nearly matches that of the Alexia, and Magico fans feel that Q3 is superior to the Alexia anyways…

Finally, Magico is selling a lot more S class speakers than Q class speakers these days. This price gap makes the S class series speakers a bigger bargain for the more price conscious consumer. So Magico may, consciously or unconsciously, be steering this way…

BlueFox · Dec 21, 2014

Probably to make some money.

awsmone · Dec 22, 2014

Well I guess if they sell and make a profit they stay in business

If they don't sell, or cost too much to make they go broke

I guess its a case of which you prefer

But how many companies in audio have gone out of business?

Orb · Dec 22, 2014

Elberoth said:
Alon Wolf once told me that the Q3 is the speaker with the least profit marigin in their range. Which makes sense, as the Q5 is only slightly more expensive to manufacture, and yet it costs almost 50% more.

They probably decided to equalise the profit marigin they have on this speaker with the rest of the range.

This makes sense to me as Magico seems to follow the normal business model of looking for a specific % profit margin to be applied to each model rather than deciding to define price specifically on capability and better (improved) models vs current.
Objectively this can be seen how often Magico prices dropped with newer models that have indeed sounded better (not meaning S model vs Q), so their prices do seem to heavily consider development/manufacturing/logistical costs rather than price based upon performance/expectation.

Cheers
Orb

asiufy · Dec 22, 2014

cannata said:
Still fair quite well with the competition at $50K. How about an Alexia, with SB Acoustics drivers (https://www.madisoundspeakerstore.c...-acoustics-sb17nrxc35-8-uc-uncoated-cone-6.5/) and Solen XO parts? Or a YG Kipod, a mere 2 way with a small sub. All this just makes me realize what a bargain my S5 are

To be fair, you'd have to compare the Q3 with the YG Haileys, which is *FAR* from a "2 way with a small sub". They're more alike than you think. Both are impeccably made.
Now, the Alexia is clearly overpriced

And it got a price bump too...

alexandre

microstrip · Dec 22, 2014

cannata said:
Still fair quite well with the competition at $50K. How about an Alexia, with SB Acoustics drivers (https://www.madisoundspeakerstore.c...-acoustics-sb17nrxc35-8-uc-uncoated-cone-6.5/) and Solen XO parts? Or a YG Kipod, a mere 2 way with a small sub. All this just makes me realize what a bargain my S5 are

Phase one to create a long lasting thread with lots of participation about a Magico happening - get the tens of happy Wilson and YG owners and partisans involved in it with a provocative, almost insulting comment.
I can guess next phase - present Magico owners as victims of audiophile intolerance.
I can also guess that phase three will involve moderators ...

Sorry Ack, I know it was not your original intention.

ack · Dec 22, 2014

If there is one thing I hate about pricing of anything in general, it is the Christian Dior approach: they will flat out tell you they increase prices 20% every year in order to protect and boost the "investment" you make. The Q3 already has had a substantial increase a few years ago, and this one isn't justified to me, yet. (don't care to discuss other competing products' price increases at this point). Perhaps I am about to coin a new term, but it feels to me the Q3 is now also "fashionably expensive".

FrantzM · Dec 22, 2014

caesar said:
Simple answer: High end audio is a luxury industry and it is hard to judge quality of “experience goods” objectively. And just like in other parts of the luxury industry (clothing, perfume, cosmetics, etc.), companies raise prices exponentially, claiming expensive labor and parts. Our wives pay $35 for a tube of lipstick and $250+ for a bottle of perfume. It makes them happy. So why not pay more for speakers?

Music through expensive luxury speakers makes us feel extra good. And luxury goods convey status and a pampered life. If you are already paying $40K, what’s another $10K? A $50K speaker has more mystique than a $40K speaker. High prices don’t deter. Instead, they convince the consumer the product is worth having.

Plus, those guys who will pay more for the Q3 will feel justification because the price nearly matches that of the Alexia, and Magico fans feel that Q3 is superior to the Alexia anyways…

Finally, Magico is selling a lot more S class speakers than Q class speakers these days. This price gap makes the S class series speakers a bigger bargain for the more price conscious consumer. So Magico may, consciously or unconsciously, be steering this way…

Funny that No one commented on this excellent, frank and almost candid post. +1 Caesar, I am with you there....

In the end it is a business, they're init to make a profit .. As long as the market bears it .. They will raise their price. if there is one thing the Audiophile market has been consistent on , is price tolerance. They (audiophiles) will always find ways to fabricate justification for the higher prices.. They will do the lip service themselves without even being asked , you will see all these in forums where the users are mentioning: Higher parts cost, manufacturing, research and development, the ever casual " I was in a conversation with Joe Knox of Superbity Audiophile Research and he told that they made less money on the $750,000 speakers than on the $1000 models"

... You name it we'll find rationale ourselves...

What a compliant bunch we are ( I count myself in BTW)

mcduman · Dec 22, 2014

as far as I am concerned the q3 is an end-of life product and any price increase, if true, should mean they are selling it well (unless of course they are not selling it at all and need to make it more visible by increasing its price)

Orb · Dec 22, 2014

FrantzM said:
Funny that No one commented on this excellent, frank and almost candid post. +1 Caesar, I am with you there....

In the end it is a business, they're init to make a profit .. As long as the market bears it .. They will raise their price. if there is one thing the Audiophile market has been consistent on , is price tolerance. They (audiophiles) will always find ways to fabricate justification for the higher prices.. They will do the lip service themselves without even being asked , you will see all these in forums where the users are mentioning: Higher parts cost, manufacturing, research and development, the ever casual " I was in a conversation with Joe Knox of Superbity Audiophile Research and he told that they made less money on the $750,000 speakers than on the $1000 models" ... You name it we'll find rationale ourselves...

What a compliant bunch we are ( I count myself in BTW)

So explain the price drop of the Q range to the previous models

M5 in 2009 was $89k, the Q5 in 2010 was $59k.
That breaks your assumption of "will always find a ways to fabricate justification for the higher prices"

The Q5 measures and sounds better, but was able to be sold cheaper because of its manufacturing/logistics costs, would be interesting to consider which has greater R&D costs because first thought on that would go to the Q5 IMO and assumption.

Cheers
Orb

FrantzM · Dec 22, 2014

Orb said:
So explain the price drop of the Q range to the previous models
M5 in 2009 was $89k, the Q5 in 2010 was $59k.
That breaks your assumption of "will always find a ways to fabricate justification for the higher prices"

The Q5 measures and sounds better, but was able to be sold cheaper because of its manufacturing/logistics costs, would be interesting to consider which has greater R&D costs because first thought on that would go to the Q5 IMO and assumption.

Cheers
Orb

Yay !!!

A case where better was less expensive... A rarity and I am sure that Magico has taken notice that the Q5 is not often mentioned among the best speakers around at any price (although it definitely is) no doubt because of its (relatively speaking) "modest" price.

cannata · Dec 22, 2014

Maybe they simply priced the Q series too low? I brought the competition as an example of what the ”objective” value vs. MSRP of other products is (sorry microstrip, did not mean to offend you). Base on that, the Q series is a bargain.

Orb · Dec 22, 2014

I just realised one other aspect that may be why a model's price increases annually, although for many manufacturers this may not be a dominant factor.
With audio being a niche market (especially mid-upper high end), a model probably sells much better in its first few years and then sales will drop.
This creates a complex and challenging profit margin model that one really needs to sell X annually for it to be viable, as the market footprint or demand for the model falls so its price is increased to offset its lower sales.
There is a case for doing the opposite and lowering price but demand would need to increase a fair bit, and this is niche audio market compounded by niche middle-upper tier.

The effect of lesser demand is not one affecting just audio but also some other markets and there the trend of increasing prices is seen.
Classic example residential postal service (albeit a service rather than a product), but there are also product markets in same situation.

Anyway as I mentioned the annual price increase associated with a model's early-to-late demand is probably not a dominant factor but I would think it is one that is applicable.

Cheers
Orb

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