Buying home theater speakers? Buy now- electronics prices are going up.

A special column regarding speaker and other electronics pricing will start hitting the newspapers today.  Since it is time sensitive I am posting it here as well for the benefit of site visitors who may miss it otherwise.

Sound Advice
By Don Lindich

July 9, 2008

Usually when I need to list a clarification or correction it is in the final paragraph of a Q&A column, but this week the correction led to some important news so today we will be breaking from the Q&A format.

Last week the Definitive Technology ProCinema 800 system was listed at $900. The correct suggested retail price is $1199. I apologize for any inconvenience this may have caused. If you were interested in the ProCinema 800 but want to stay under $1,000, check out Definitive Technology’s ProCinema 600, which uses the same design concept of the ProCinema 800 in an even smaller form factor.

 procinema600_color_sm.jpg

 Definitive Technology ProCinema 600 system, $799

A complete ProCinema 600 system including subwoofer has a suggested price of $799. Dealers set their own pricing so you may be able to find the ProCinema 600 and 800 for less if you shop around. You can see the speakers and find a dealer at www.definitivetech.com.

When the error was discovered I learned some things that led me to contact several home entertainment electronics vendors. They all had the same thing to say: consumers can expect prices to go up very, very soon. Typically with technology prices stay static as products improve, or prices go down while quality is maintained. Unfortunately, a number of factors are making it impossible to hold the line on products such as speakers.

The first is labor costs in China. China is where the Definitive Technology and The Speaker Company speakers mentioned last week are manufactured. One vendor with close relationships with Chinese factories told me workers there are starting to receive better compensation packages, which is driving up labor costs. Another problem is the cost or raw materials and transportation, and the way they affect each other.

Anyone who has filled their tank lately knows where the cost of transportation is going. Besides paying more for the raw materials, the transportation costs add up as you move raw materials to the factory, transport the finished goods to port, ship them across the vast Pacific Ocean to North America, then to the warehouse and finally to store shelves. Combine these snowballing cost increases with a weakening dollar and you get a situation where things can’t stay the way they are much longer. When I spoke with my industry contacts and they related this, I could sense pain, frustration and exasperation in their voices because they apparently have been trying to hold the line the best they can and they are pretty much at the limit. The audio industry is fairly close-knit, even among competitors, and I was told there is quite a buzz going on behind the scenes about the whole situation.

You would think that “prices are going up” should hardly be big news, but people have become accustomed to falling electronics prices and speakers have traditionally been a segment that holds the line on price while improving quality. Given the soft economy and the high price of gas, raising prices is the last thing the manufacturers want to do, and it looks like in fact it is the last thing they will be doing as they have held out as long as they can.

If you have been putting off that electronics purchase, especially for a product such as quality speakers, the time to buy is right now- today.

Leave a Reply