Research budgets and facilities hi, thought it would be interesting to get a feel for what kind of

[Crystalarts]

Hi, thought it would be interesting to start a discussion about various companies research budgets and facilities. I think it gives a good feel for the products that they create.

A lot lot of people look down at bang and Olufsen when in fact they have superb research facilities (search "the cube" online for a taster)

anyone know now what other companies facilities are like? Is there a comparison table of research spend per company?

 

[andyjm]

I doubt that the information will be available.

If it is available, it is important to compare like with like. Modern consumer electronics have high software / processor content which sucks up the budget, but doesn't necessarily contribute to the sound quality of the end product.

There is a new USB plug in headphone DAC on Ebay at the moment with a 'buy it now' of £1.85 and free delivery. The cost of the development of the software and hardware in a device like that would dwarf the research budget of all but the largest UK based niche manufacturers.

I suppose part of the question is where does the R&D take place. If Naim use an Intel processor in one of their products that cost Intel $1Bn to develop, is that part of the development cost?

 

[Crystalarts]

Some information is available.

Linn products were quite vocal about their R&D spend in their Annual Reports.

Linn said it invested £1.92 million in 2014 in research and development, down from £2.23 million the prior year.

This is interesting as they were not making much profit. This R&D however corrolates directly to the launch of new products in 2014 with real technological advances (obviously as a result of R&D spend). this led to a 17 per cent increase in annual sales to £19.1 million as it benefited from new product launches. Pre-tax profits more than doubled on the previous year to £1.69 million, (2013: £755,000)

Additionally, regarding facilities, company tours/visits will often show the facilities used for R&D etc.

The REAL question in my mind, similar to your comments is whether or not R&D actually improves much. I think most would agree amps have not really advanced much in the last decade or two. CD players not much in the last decade. Dacs not much in the last 5 years etc.

Perhaps the real advances are efficiency, being able to get the same performance in a smaller box or with more features (ie Amp with Dac as opposed to just Amp) etc.

 

[andyjm]

The real surprise is how small these companies are. I recall that Naim was about this size when it was bought out by Focal. For arguably the leading brands, these numbers are tiny.

The far reaching change is the availability of cheap dsp processing power. In the same way that internal combustion engines have been tamed by software, the same will be true of speakers. We will look back with a smile at separate DACs, speakers and amps. Everything will be active, dsp, and mounted in the speaker enclosure.

In the pro world, the future is already here.

 

[BigH]

B&O are having serious problems, issued its latest profit warning last December, looks like another loss.

 

[davedotco]

The real surprise is how small these companies are. I recall that Naim was about this size when it was bought out by Focal. For arguably the leading brands, these numbers are tiny.

The far reaching change is the availability of cheap dsp processing power. In the same way that internal combustion engines have been tamed by software, the same will be true of speakers. We will look back with a smile at separate DACs, speakers and amps. Everything will be active, dsp, and mounted in the speaker enclosure.

In the pro world, the future is already here.

Nothing to stop the well heeled enthusiast buying a pair of these.....

PMC TwoTwo.5. Digital active speakers, models starting from about £3k.

Or, more realistically for some......

Equator D5, 5 inch dual concentric with active DSP allignment, though oddly no direct digital input. Under £400.

The future is most definitely here, just get out and find it......*dirol*

 

[Crystalarts]

This is what interests me too... People critizise the likes of B&O for poor sound or Marantz and Denon for being just a big commercial organisation with no decent sound compared to the likes of Linn, Naim etc. however all these larger firms have HUGE R&D budgets (Even B&O who are struggling have significant R&D budgets)

Do they need the huge budgets and do they make much difference? (ie is there any advances possible on an annual basis or even 3-5 year basis?)

Do you get more value from a Marantz due to its economies of scale?

Is the key to R&D making things user friendly? Like the software? you compare Naim and Linn software to Denon or Marantz and they are miles ahead. Is this because they need to be more focussed with their R&D budget?

does R&D have any correlation to quality in the grand scheme of things?

 

[Covenanter]

A few points:

- I wouldn't take much notice of a small company's stated profit. Any FD worth his salt can move the profit figure materially in any direction he wishes. As my old finance lecturer used to say "Profit and Loss - smoke and mirrors, smoke and mirrors".

- R&D expenditure is no guarantee of good products. By its very nature it can lead nowhere in a very expensive way.

- HiFi is a niche product and is in many way as much about lifestyle as it is about product. Companies tend to be quite small not least because hifi is actually technically quite simple. HiFi enthusiasts tend to like the obscure and the esoteric not mainstream brands. Even the biggest of hifi companies are quite small compared to say consumer electronics companies.

Chris

 

[drummerman]

- HiFi is a niche product and is in many way as much about lifestyle as it is about product. Companies tend to be quite small not least because hifi is actually technically quite simple. HiFi enthusiasts tend to like the obscure and the esoteric not mainstream brands. Even the biggest of hifi companies are quite small compared to say consumer electronics companies.

Chris

Yes, Hifi is in the greater scheme is minute so it's even more surprising that Technics have re-entered.