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Saturday, February 03, 2007

Caveat Emptor

Mark Levinson made a name for himself designing audio amplifiers in the '70s. And then he sold it. (Literally, he sold his name—it's now owned by the Harman Specialty Group, and he—Mark Levinson, the person—can't use the name "Mark Levinson" for marketing audio gear.) Recently, Mark Levinson (the person again), whose current company is called Red Rose Music, was outed for allegedly (yeah, that's it, allegedly) selling rebadged Chinese equipment as if it were the rarefied result of Herculean research and development efforts on the part of himself and his "associates." Compare, for example, the $5,000 Red Rose Music M1 and the $788 Korsun/Dussun D9. Guess that 6X markup is what you get for having a good name...well, sort of having it.

Say what you will about the camera industry, at least for the most part we know what's what, and consumers aren't very susceptible to the magic dust effect, whereby something can be touched with a magic name or a magic "modification" and be passed along for 6x or 12x profit margins (1.5x, maybe). In photography—again, generallly speaking—we can decide what we want to pay for a name, and we're more likely to make buying decisions based on features and performance.

(Oh, and incidentally, Chinese audio stuff is da Bomb. A lot of it is really good, and for the prices—the best prices, anyway—it laps the field. A great deal of the hoity-toity, high-priced specialty gear you can pay big bucks for at audio boutiques these days is Chinese OEM.)

Posted by: MIKE JOHNSTON

21 Comments:

Blogger canfraggle said...

Bit off-photography, but I have to agree with you. The various Chinese audio bits I've used since moving to China have been outstanding. To compete with Mike's earlier choice of the NHT monitors - http://www.newegg.com/Product/Product.asp?Item=N82E16836136102
The Swan M200. They are active, fairly big and and compare very favourably to the Primare, B&W and AVI equipment I normally use. I've also got some crazy DAC by DIYEDEN called the Great March which has been most impressive.

1:21 AM  
Blogger Ernest Theisen said...

Well that is a hell of a story. I think you should write a blog about Henry Kloss. He died recently as I am sure you know. Some where in the 70’s I built a Heathkit FM receiver and an amp. I think it was between 50 and 100 watts. A friend of mine, who had a keen ear, and a pair of AR 15’s said a new speaker is available designed by Kloss, called Advent. We did not have any money but for some reason, love I guess, my wife agreed and I bought a set of full size Advent loudspeakers. Walnut skins, OK thin but Walnut! I was thinking about you and your discussion about the M oo. I have the same issue. My office is a 12 x 12 bedroom. I am looking at a pre-intel 20 inch iMac. I love music. All kinds. So I put the old beat up Advents behind me, plugged a RCA double in the back of the Mac, ran it around the room into a wonderful Kenwood AM/FM Amp and them to the two honeys. My goodness iTunes sounds great. I lashed up a CD player and I am in heaven, sort of. OK, Understand, I have $4000 and change stuck in my ears. My how wonderful. Never realized how far my high freqs had left me. Anne-Sophie Mutter with good ole Herbert directing the Berliner Phil doing the Beethoven Violin Concerto in D sounds petty good on these 37 or so year old boxes. Think about it, you can still find them on Ebay. E

1:42 AM  
Blogger TBG said...

If I were inclined to give Levinson the benefit of the doubt, I'd ask what makes you think that the insides of the Chinese box look anything like Levinson's?

8:46 AM  
Blogger Ade said...

You clearly haven't spent much time on the Nikonians forum site. :-) Some people won't even buy a lens cap unless it's a Nikon item. (Fortuitously though, that's often the same thing as "Chinese-made" these days.)

It's a mystery with some people why they don't just watermark all their images with the name of the camera brand.

8:55 AM  
Blogger juze said...

The world record holder for the biggest bleedin markup is 47 Labs with their Gaincard amps. The components are worth about USD 100 retail, yet they sell for huge sums of money. They sound good, no doubt about it, but with a bit of DIY, you can get the same sound for a negligible amount of money.
Cable manufacturers come a close second with their ridiculously priced, ridiculously overspecced cables. Oh well. Me, I have two systems, one completely DIY, using telephone cables for interconnects and CAT5 network cable for speakers, and the other using active Genelec monitors with built-in DAC. Lovely sound for not too much money, but uglier than a genital infection.

9:07 AM  
Blogger juze said...

While on the subject of caveat emptor, here's a great article on this:
http://www.tnt-audio.com/edcorner/october06.html

9:32 AM  
Blogger dswitkin said...

Actually, I think there's more going on behind the scenes in the photo industry than most people think. I was surprised to learn that many low end point and shoot digitals from big names are actually developed by third parties. And while they may be OEM'ed specifically for that name brand, and to their specs, it's still being built on common technology shared with other brands. I think it's fair to say that a Nikon D2Xs is more of a Nikon than their $199 point and shoot probably is.

9:44 AM  
Blogger Matthew Robertson said...

You know, Mike, if you use gold-plated USB cables and high-end card readers -- budget 50% of your camera system for these components -- your images will come out with a much cleaner signal-to-noise ratio. And don't forget your power conditioner!

10:35 AM  
Blogger Mike Johnston said...

Woo, Juze, that metaphor was just a tad too strong!!

Certainly gets your point across.

--Mike

12:20 PM  
Blogger fizzy said...

There's a lot of new Chinese brands in camera equipment such as tripods and lighting. It's all made to look like the well-known, top-level brands. Posts on other sites have shown if you disassemble it (or, when it breaks), the styling and the finish are pretty good, but the materials and engineering inside are utter trash.

Maybe the audio stuff is better, but I'd need to see a test where an engineer went over it bit by bit and said that it really was the same as the name brands before I bought, especially for higher-end stuff. (Not that I'd lay out for high-end audio anyway, the "added cost/added benefit" curve with audio is especially ridiculous.)

12:26 PM  
Blogger robert said...

that will go very nicely with my $25,000 Eggleston speakers......

12:47 PM  
Blogger Rob said...

I'd say before you get too excited about this story, consider that it may be the other way around. If you spend $500k on R&D to make an amp, you'll want to sell it at $5k a pop. Like most goods, you may want to have it built in China to keep costs down. Unfortunately, IP is not terribly well respected in China, so your plans may be 'borrowed' and a 'new' version may roll off the same assembly line at night while your product gets made during the day.

Not saying this is what happened, just something to investigate before jumping to conclusions about Levinson.

12:55 PM  
Blogger Mike Johnston said...

Rob,
I don't think that's what's going on in this case, from all I've read about it, but I admit you raise an excellent point. If it isn't what's happened here, it's certainly happened elsewhere.

--Mike

1:25 PM  
Blogger jp said...

Don't really know why but I bought a de facto Philips monitor the other day, had some difficulty calibrating it and went onto the official Philips web site to discover it was not included on Philips catalogue. At some cost, I 'phoned Philips who denied all knowledge of the item but they gave me a number to try. From then on, I was given the run around by, as it turns out, the same company (not Philips) who told me to try different numbers. The monitor - rebadged Philips PHP-X19 - is in fact made by Proview Electronics in Tiawan. In itself this may be no bad thing, Proview is a very large manufacturer of such items in global terms, but here we have product misrepresentation (illegal in the UK or so I thought) with no back up. I should have cottoned on quicker when I found no warranty info or addresses on the limited paperwork and box. This item was sold by a reputable company in the UK, made by another supposedly reputable company, who don't seem to understand photographers or musicians might like the real whatsit if that is what they are being seduced to pay for. While a visit to these guys by our trading standards officers might be in the offing, caveat emptor it definitely is.

2:44 PM  
Blogger robert e said...

dswitkin, I seem to recall reading years ago that, at the time, Sanyo was the world's leading producer of digicams, including OEM-ing most of the Nikon Coolpix line.

10:24 PM  
Blogger Just Plain Hugh said...

Kind of a funky photoshop job there
http://www.redrosemusic.com/literature/M1_front.pdf

3:38 AM  
Blogger al said...

During most of the nineties I built and modified Audio gear, I was shocked to find what obscene amounts of mark up there is on half the gear. Power supplies that sold for £500 or there abouts with less than £75 of components inside and then your not event taking in to account the bulk discounts these makers get. I dont think I ever came across any component that wasnt made from generic parts, that you could buy with a little searching for your self. For anyone looking for a highend system id look at the Audio Amateur (or whatever its called now) try and get some of the back issues and mod generic equipment or build your own spend the savings on music or camera gear.

4:06 AM  
Blogger Boris said...

Well, I got bitten (right term?) by fake SanDisk Extreme III SD cards for my K10D... Otherwise, I would agree that very often a product made in China with a no-name or not-so-well-known-name on the label would work just as fine.

9:28 AM  
Blogger dasmb said...

There is a difference between marking up 16 times the "price of components" and what Mike's taking about.

Even the best components are worth nothing until they're sourced, tested, installed intelligently into a well designed circuit, packaged in an attractive case and warranted by a competent engineer. The value of these intangibles shouldn't be diminished -- I've noticed that the closer the market price of a product comes to the wholesale cost of its components, the worse my overall experience is.

That said, if these amps are being designed, etc in total by a Chinese firm, then a 16x markup is a little absurd -- provided that the markup isn't buying us some intangible that makes it worthwhile.

It may also be that the plant which produces amps designed by Mark is exploiting the lack of IP laws in China. Fact is, we don't know what's going on here and it doesn't matter. The only real price of a product is what people are willing to pay for it.

To bring it back to photography: how much does this remind anybody of the current relationship between Panasonic and Leica?

10:58 AM  
Blogger Dave New said...

The Harman folks have pretty much ruined everything they've touched in the last few years.

I have a pair of Infinity Studio Monitors that have done yeoman's duty as main speakers for about 30 years, now. I even had a local audio shop that specializes in musician's amps rebuild the drivers, after the suspension foam disintregrated. Still going strong.

So, when it came time to advance to surround sound for the home theatre, I made a bee-line to the local electronics emporium and obtained a "matching" Infinity center speaker and powered sub-woofer. I didn't know at the time, that Infinity had been bought out by Harman, some time ago.

Imagine my surprise to find out some months later that the souce of an awful interference to my ham radio was coming from the sub. After inspecting the unit, I found that a 50 volt electrolytic capacitor across the speaker leads had exploded (underrated voltage and using a polarized cap in an AC application?), and that two under-spec'ed emitter ballast resistors had burned up (2 watt resistors used in a circuit that required at least 5-watters, and 10-watters would have safer). The supposedly high-power (100+ watts) sub amp didn't even have the output transistors mounted on heat sinks. The interference was coming from a circuit that was clearly under stress, and was oscillating with harmonics throughout the SW bands.

Doing a Google search on this sub model number produced a slew of complaints, along with various grumblings about a possible class-action law suit, because Harman, the new parent company of Infinity, was refusing to acknowledge the awful workmanship of this (imported from China) sub amp, or to offer to fix any of the now-out-of-warantee amplifiers.

I've been looking for a replacement frame sub-amp that will come close to fitting the original opening, so I don't have to do major surgery on the enclosure. The Infinity/Harman amp isn't worth fixing.

I understand that Harman ruined JBL (if they ever had a reputation in the first place), as well.

12:55 PM  
Blogger Marsy said...

I have also been sold a Philips PHP X19 monitor from PC World at the end of last year. It developed a Fault two week age, PC World told me it was not there problem and I should contact Philips. I was also told they did not make the monitor and would not repair it. After several phone calls and visits to the store, PC World has agreed to repair it. I do feel I have been ripped off I got the thing because it was a Philips.

12:23 PM  

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