You mean like B&O?

[The title] The answer I get everytime I say I have a high end luxury hi-fi company!! Yes, it happened again yesterday while at a presentation! Sigh! Anyway:

A couple of years or so ago when Credit Crunch was just a little sub-prime bother in the colonies(America) and S&P ratings were still sky high on many a now defunct establishment my business partner and I were crunching over some figures that reflected our own market. The high end hi-fi separates market in which we resided, to be exact, and the one that most of our products under the Sonneteer brand serviced. Although our sales at the time were creeping upwards, the market as a whole was in decline and the new products being touted by our competitors were not growing the market place one jot. It was time for a rethink. No time to panic however and the cause was worthy of some serious thought.

The first couple of things that came to our minds were: 1. Neither of us had any of our own equipment in proper use in our houses anymore and 2. Why were the new integrated products(amp, CD, radio in one) produced by some of our competitors, not actually growing the overall market whilst starting to dominate its turn over?

We then had a more detailed look at the market overall and particularly in the so called high ticket price items sector. Our attention was grabbed by a little company in Denmark called Bang and Olufsen. You may have heard of them?! And that became just the point! Go out to dinner, attend a party or bump into anyone in a nice English pub in surrey and they ask, ' so what do you do?' and I reply, ' I have a small high end hi-fi company' and nearly every time they say,' oh you mean like B&O?'. Never do they mention, Arcam, Meridian, or even Lynn or Naim for that matter. This was surely a sign. So we went digging deeper.

The numbers game tells a story. At the time, back in early 2007 B&O were turning over approx £450m and growing the hi-fi separates electronics market was a fifth of this at best and declining. We already knew the heyday had long past in this area, but it was also clear that there was still a solid market for people buying expensive music systems. So what was wrong?

To our minds, it was obvious really and it goes back to the point the, we no longer had our own products singing and dancing in our own homes. We were starting to reflect the wider consumer rather than the hi-fi enthusiasts which were and still are deep down, the drivers of our thinking. We wanted all the performance and purity of sound etc. But we also wanted it to compliment our lifestyles. This translates to I want it to grace the living room and not disgrace the wife's mood towards me..ehem.

Back to the integrated products, that were steeling market share from the amplifier and CD player market. Now a strong argument could have been made to simply jump into that boat and shove a whole load of features into a box we already made and hey presto! This would definitely give us a faster time to market. A couple of reasons why not:

1. All these products are, as mentioned already, only replacing market share and not in any way growing the overall, still shrinking market.

2. These products do not fulfill the criteria that bring B&O customers to buy erm, B&O.

So, two or so years down the line and the Sonneteer Morpheus music centre is the result. www.sonneteer.co.uk/morpheus.htm