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BRUCE IGLAUER

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MD -20 CD Transport

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SEPTEMBER 1993 VOL. 77, NO. 9

AUDIO

Yamaha, page 41

IltP

we

"tt "V'

Quiet by Design, page 36

features

THE AUDIO INTERVIEW: BRUCE IGLAUER

Jonathan Poses

26

QUIET BY DESIGN

George Schulson

36

equipment profiles

YAMAHA DSP-A2070 DIGITAL SOUND -FIELD

PROCESSING AMPLIFIER Leonard Feldman

44

GENESIS GENRE I LOUDSPEAKER

D. B. Keele, Jr.

52

PIONEER DEH-M990DSP CAR CD PLAYER

AND RECEIVER Leonard Feldman and Ivan Berger

64

at/rides

HARMAN KARDON HK6950R INTEGRATED AMP

Anthony H. Cordesman

74

Pioneer,

page 64

Iggy Pop, page 85

recordings

CLASSICAL

80

ROCK/POP

85

departments

FAST FORE -WORD Eugene Pitts III

6

SIGNALS & NOISE

8

AUDIOCLINIC Joseph Giovanelli

12

AUDIO ETC Edward Tatnall Canby

16

BEHIND THE SCENES Bert Whyte

20

The Cover Equipment: Yamaha DSP-A2070 DSP amplifier The Cover Photographer: Bill Kouirinis Studio

Audio Publishing, Editorial, and Advertising Offices,

1633 Broadway, New York, N.Y. 10019

Subscription Inquiries, (303) 447-9330 3 PA

The Audit

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Bruce lglauer, page 26

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FAST FORE -WORD

ast night I had dinner with Ken Kantor, an interesting fellow who is Vice President, Technology, for Now Hear This, one of the speaker making divisions of International Jensen. Ken said several things worth passing along during the course of describing how the price had been determined for NHT's new 3.3 speaker. While most audiophiles are quite knowledgeable about many engineering and technology topics, says Ken, "this group of inquisitive and opinionated people seems generally oblivious to the economic and business factors that shape the audio industry." While I personally find that many audiophiles and industry engineering types have something akin to disdain for business questions, it never ceases to surprise me how poorly these same people understand how retail prices are arrived at. They seem to think that the best -performing products, too often confused with the highest priced ones, are the ones that sell best. Kantor makes the point that "audio companies vary widely in size, with American brands alone varying by a factor of more than 1,000 in the number of people they employ, number of units shipped each month, and the total income generated." Obviously, a company at the big end of this spectrum is going to play by different rules than little ones. Basically, there are two ways of determining price structure, says Kantoroverhead driven and materials driven. Big manufacturers commonly start with a "bill of materials," and parts costs forms the

basis for most of their thought process. To the price of woofer, tweeter, crossover, box, carton, etc., is added labor, though this usually is a minor percentage of the total. "Ultimately," says Kantor, "the dealer price is simply a linear multiple of the parts plus labor, usually just about a factor of two. If parts and labor equal $100 a pair, then the dealer pays $200, more or less, and the customer sees a Manufacturer Suggested Retail Price of $400."

"But Ken," I said at one point, "how about the folks who think they are in business just to make the very best speakers they can? It looks to me that they ignore costs and mark-up ratios. Their prices appear to indicate some inflated notion of how 'great' their speaker is. How do they price?"

"The smaller companies pay most attention to overhead, to what it costs them to survive," responded Kantor. "It doesn't really matter what the box costs, because usually this is a labor of love. Market reality is that they can sell, say, 30 pairs of speakers a month, which really isn't an unusual number. Let's say, too, that there's six people with modest salaries, about $15,000 a month, but even adding rent, phone, utilities, ads, supplies, it's just $30,000 a month to keep the doors open. At 30 pairs a month, it doesn't matter whether the bill of materials comes to $100 or $200, but if the company can't get the dealer to pay $1,000 for the speakers, they need a new line of business."

There are a lot of things that fall out of this sort of analysis-such as why there are so few labors of love on the market and so many middle-of-the-road speakers. And why the Law of Diminishing Returns seems to have such a long upward curve with so few really good values. But I think we'll leave them for another time.

AUDIO/SEPTEMBER 1993

6

V.P./EDITOR-IN-CHIEF

Eugene Pitts III

ART DIRECTOR Cathy Cacchione

ASSOCIATE ART DIRECTOR Linda Zerella

TECHNICAL EDITOR

Ivan Berger MANAGING EDITOR

Kay Blumenthal ASSOCIATE MANAGING EDITOR

Teresa Monge

ASSOCIATE MANAGING EDITOR Douglas Hyde

DIRECTORY EDITOR Ken Richardson

ASSISTANT EDITOR/MUSIC Michael Bieber

ASSISTANT EDITOR Gerald F. McCarthy

ASSOCIATE EDITORS Edward Tatnall Canby, Bert Whyte

SENIOR EDITORS Leonard Feldman, D. B. Keele,

David Lander

CONTRIBUTING EDITORS/ARTIST

Michael Aldred, Herman Burstein, David L. Clark, Anthony H. Cordesman, Ted Costa, John Diliberto, Frank Driggs, John Eargle, Susan Elliott, Edward J. Foster,

Joseph Giovanelli, Bascom H. King, Edward M. Long, Robert D. Long, Frank Lovece, Jon W. Poses, Jon R. Sank,

John Sunier, Michael Tearson, Jon & Sally Tiven, Michael Wright

AUDIO, September 1993, Volume 77, Number 9. AUDIO (ISSN 0004-752X, Dewey Decimal Number 621.381 or 778.5) is published monthly by Hachette Filipacchi Magazines, Inc., a wholly owned subsidiary of Hachette Filipacchi USA, Inc., at 1633 Broadway, New York, N.Y. 10019. Printed in U.S.A. at Dyersburg, Tenn. Distributed by Warner Publisher Services Inc. Second class postage paid at New York, N.Y. 10019 and additional mailing offices. Subscriptions in the United States, $24.00 for one year, $42.00 for two years, $58.00 for three years; other countries except Canada, add $8.00 per year; in Canada, $32.00 for one year (includes 7% GST; Canadian GST registration number 126018209). AUDIO* is a registered trademark of Hachette Filipacchi Magazines, Inc. ?1993, Hachette Filipacchi Magazines, Inc. All rights reserved. The Editor assumes no responsibility for manuscripts, photos, or artwork. The Publisher, at his sole discretion, reserves the right to reject any ad copy he deems inappropriate. Subscription Service: Postmaster, please send change of address to AUDIO, P.O. Box 52548, Boulder, Colo. 80321-2548. Allow eight weeks for change of address.

Include both old and new address and a recent address label. If you have a subscription problem, please write to the above address or call (303) 447-

9330. Back Issues: For information, write to P.O. Box 7085, Brick, N.J. 08723.

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