Stereophile As We See It; High-End Audio & the Invisible Hand

Orb · Sep 2, 2011

Just want to say this is a well thought out piece looking at the importance of Hif shows with the decline of dealers and their sustainability linked to interest and sales, along with a small focus on free markets and global manufacturing.
Nice work John.
http://www.stereophile.com/content/high-end-audio-amp-invisible-hand

Hope other enjoy it as well.
Cheers
Orb

garylkoh · Sep 2, 2011

Thanks, Orb. That was a good read.

One statement leaps out at me "though the Classe is made in Canada, that is only because, at its high price, the cost of manufacture is less critical and can be passed on to potential customers."

I wonder at what level WBF members will be willing to buy "Made in America" if two products are of the same quality.

Orb · Sep 2, 2011

Yeah that is becoming more noticable in general for all types of products.
Still, the plus side is more awareness on living and working conditions in China (as a moral society we should boycott products that have appalling standards but this is difficult to know and not all manufacturers are bad) and that as JA mentions the other side effect is a middle class there that feels more empowered and is slowly (very slowly in parts I agree) changing the society in terms of living conditions and standards.
The last means more manufacturers may consider western countries.

Sadly it seems in UK we are not very patriotic with regards to products and seem eager for bargains without regard to moral aspects that we hold ourselves and others to, but the tide may be turning slowly with awareness of the effects of mass moving manufacturing to countries such as China.
Cheers
Orb

amirm · Sep 2, 2011

Good article.

I think a major issue here is not lack of retailers but the incredible increase in the number of brands in high-end. How can any retailer stock even 1% of them? Even knowing all the names is hard! Do we need so many brands?

We have a small population interested in these things and they spread themselves over such a larger number of vendors that it makes it impossible to ever create a situation of majority of them being available for local evaluation.

mep · Sep 2, 2011

garylkoh said:
Thanks, Orb. That was a good read.

One statement leaps out at me "though the Classe is made in Canada, that is only because, at its high price, the cost of manufacture is less critical and can be passed on to potential customers."

I wonder at what level WBF members will be willing to buy "Made in America" if two products are of the same quality.

Good question Gary. I guess it just depends on how much more cost would have to be passed on to the consumer to have the product built in America. I’m sure there is a limit to people’s morality conscious compass that is based on financial considerations. Adding a few hundred dollars to the price tag in order to keep Americans employed might make people feel better about themselves. Adding a few thousand dollars to the price tag might make them think that those Chinese workers building Apple products and jumping out of the factory windows must have had other issues going on in their lives and things aren’t really so bad in those Chinese factories after all.

NorthStar · Sep 2, 2011

"And no matter where it is made, poor and miserable people don't buy high-end audio equipment." - John Atkinson {As We See It}

JackD201 · Sep 2, 2011

mep said:
Good question Gary. I guess it just depends on how much more cost would have to be passed on to the consumer to have the product built in America. I’m sure there is a limit to people’s morality conscious compass that is based on financial considerations. Adding a few hundred dollars to the price tag in order to keep Americans employed might make people feel better about themselves. Adding a few thousand dollars to the price tag might make them think that those Chinese workers building Apple products and jumping out of the factory windows must have had other issues going on in their lives and things aren’t really so bad in those Chinese factories after all.

Depending on one's diplomatic views Taiwan is either a part of China or a separate country altogether. AFAIK Apple products are made mainly in Taiwan.

I have absolutely nothing against products made in China for as long as QC is what it should be. In my own experience at least, sadly this isn't always the case. I have China made products in my line-up that sell for prices I cannot imagine would be possible if they were US or EU built. They are wonderful when they're working properly, customers don't seem to mind since we honor all the warranties and even have loaner units for when things get broken, we are happy with the manufacturer because they support us with no red tape or hassles, but we are not so happy because it's a lot of extra work that shouldn't be necessary if the darned things were built right in the first place.

<end of rant>

Gregadd · Sep 2, 2011

Can they make them in the Philippines?

JackD201 · Sep 2, 2011

I wish. Workmanship for cabinets here is top notch. We're famous for our furniture exports. It wouldn't be cheaper though. We have, I believe the highest electricity costs in the region. CNC machines eat up a lot of power. Our labor costs are also a lot higher than China's.

Orb · Sep 3, 2011

JackD201 said:
Depending on one's diplomatic views Taiwan is either a part of China or a separate country altogether. AFAIK Apple products are made mainly in Taiwan.

I have absolutely nothing against products made in China for as long as QC is what it should be. In my own experience at least, sadly this isn't always the case. I have China made products in my line-up that sell for prices I cannot imagine would be possible if they were US or EU built. They are wonderful when they're working properly, customers don't seem to mind since we honor all the warranties and even have loaner units for when things get broken, we are happy with the manufacturer because they support us with no red tape or hassles, but we are not so happy because it's a lot of extra work that shouldn't be necessary if the darned things were built right in the first place.

<end of rant>

Seems Apple is now manufactured in China itself (cannot remember region), not sure if this is in addition or replaced Taiwan.

Cheers
Orb

c1ferrari · Sep 4, 2011

Thanks, Orb

mep · Sep 4, 2011

Orb said:
Seems Apple is now manufactured in China itself (cannot remember region), not sure if this is in addition or replaced Taiwan.

Cheers
Orb

I was specifically referring to the Apple products that are made in China based on the reports I read where some of the workers were committing suicide due to the extreme working conditions they faced. As for the China/Taiwan dealio, we should ask the Taiwanese if they are part of China or are they their own separate country. I think I know the answer. But when you're literally under the barrel of a gun (or the flight path of thousands of missiles pointed at you), you have to be careful of what you say.

And as China’s clout expands both militarily and financially, U.S. support for Taiwan independence seems to have been gutted. We won’t sell Taiwan the weapons they need and want in order to better defend themselves against the Chinese for apparent fear of angering China more than we already anger them on other issues they hold near and dear to their heart.

If I was Taiwanese, I wouldn’t count on the U.S. coming to the rescue if China attacked Taiwan. We would probably just express our diplomatic “grave concern” while the Chinese takeover occurred.

Orb · Sep 4, 2011

Yeah I remember also reading that in the news as well mep,
also in Taiwan never heard about poor working conditions or workers committing suicide like at the Apple plant, to be fair to Apple this is shared with a few other western tech companies, but if they move away from western manufacturing regulations and labor costs, and still intend to sell to western countries they should still be held morally accountable and should enforce a certain level even at that and other plants.
But then how many demonstrations and boycotts has their been even over the old sweatshops for clothing and how workers are/were treated around the world and even sometimes close to home.

Cheers
Orb

mep · Sep 4, 2011

Orb said:
Yeah I remember also reading that in the news as well mep,
also in Taiwan never heard about poor working conditions or workers committing suicide like at the Apple plant, to be fair to Apple this is shared with a few other western tech companies, but if they move away from western manufacturing regulations and labor costs, and still intend to sell to western countries they should still be held morally accountable and should enforce a certain level even at that and other plants.
But then how many demonstrations and boycotts has their been even over the old sweatshops for clothing and how workers are/were treated around the world and even sometimes close to home.

Cheers
Orb

Orb-The global economic machine is always looking for cheap labor markets and new people to exploit. I find it highly ironic that lots of American workers lost their manufacturing jobs to Mexico only to subsequently see those same jobs be lost from Mexico and head to China. The fact that it could possibly be cheaper to pay not only the Chinese labor costs but the shipping costs from China back to the U.S. and still be cheaper than shipping the goods from Mexico tells you how devastatingly low Chinese wages must be.

Gregadd · Sep 4, 2011

I have no proof but the rumor is that it is so cheap that many do not purchase cargo insurance for the return trip! OTOH Henry Ford had the insight to know he had to pay his workers enough money to buy his cars.

Eventually the greedy will see the market disappear and there money devalued by inflation. For anything to continue to exist there must be a cycle. Money is only good for what you can buy with it. If you allow it to become stagnant it's just shiny metal or paper.

JackD201 · Sep 4, 2011

It's really quite ironic. The consumer saves on his purchases up front, but the money he uses o pay for it loses its value later.

Personally I think the correction is already happening. The problem is China has got a lock on their Media so we do not get to see the extent of their labor unrest.

Look to India to steal quite a bit of China's thunder in the near term as China's labor costs continue to rise.

Gregadd · Sep 4, 2011

China is already investing in Africa.

JackD201 · Sep 4, 2011

Yup, particularly in mineral rich countries. Tantalum and rare earth magnets anybody?

FrantzM · Sep 5, 2011

Hi

I , now, more than ever wonder how sustainable this model of always looking for cheap labor, truly is. It is clear that we are going toward a state of equilibrium. The ubiquity of the Internet has made the wants, needs and knowledge of people very similar throughout the planet ... We may be shifting slowly toward a new paradigm rather than a simple search for cheapest labor with all the societal and moral problems it entails.
On a more plebeian view. it no longer matters where it is made ... Apple products are made in China and they are of the highest quality. Some people will retort to that that they are designed in the US. To what I will retort that with China and India spewing out each more than 500,000 engineers a year many of the highest caliber. How long do you think it will take to make their own high quality product? In Information Technology, Networking my area of work. Huawei is the challenge to Cisco domination .. In some parts of the world, Africa for example and even they are neck to neck with Cisco...

Orb · Sep 5, 2011

FrantzM said:
Hi

I , now, more than ever wonder how sustainable this model of always looking for cheap labor, truly is. It is clear that we are going toward a state of equilibrium. The ubiquity of the Internet has made the wants, needs and knowledge of people very similar throughout the planet ... We may be shifting slowly toward a new paradigm rather than a simple search for cheapest labor with all the societal and moral problems it entails.
On a more plebeian view. it no longer matters where it is made ... Apple products are made in China and they are of the highest quality. Some people will retort to that that they are designed in the US. To what I will retort that with China and India spewing out each more than 500,000 engineers a year many of the highest caliber. How long do you think it will take to make their own high quality product? IN Information Technology, my area of work. Huawei is the challenge to Cisco domination .. In some parts of the world, Africa for example and even they are neck to neck with Cisco...

Heh, Huawei took Cisco intellectual property and blatantly put this into their own product, China turned a blind eye even when Cisco complained, Cisco should had aggressively continued chasing it IMO even with the difficulty within North America court case.
Then we see again similar thing happening with Motorola and Huawei, although Motorola had to drop the case as Huawei brought a court case deliberately looking to sabotage a deal between Motorola and Nokia Siemens Network.
I have over 20 years technical manufacturing dealings with China, and I have to say each time something dubious happens with the technology or product to the benefit of local Chinese companies

IP theft is not perceived as wrong if it benefits China (government or local business).
I could go on but I will refrain.

Cheers
Orb

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