Shocking Bang & Olufsen Profit Warning

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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Shocking Bang & Olufsen Profit Warning

Generally, I don’t write about profit warnings but the latest one from B&O caught me by surprise because the luxury market is booming and the consumer electronics market is doing amazingly well yet Bang & Olufsen is not seeing sales explode. As I child I used to ride my bike to the nearby B&O store to marvel at the products which were beyond the reach of a 11-year-old. The company was decades ahead of the competition in terms of design.

BeoPlay A8

A8-12CO-04.jpg

They did such a good job in-fact, Steve Jobs cited them as an inspiration. Apple’s success in-turn led to the consumer electronics world taking design very seriously. As a result, there are truly beautiful looking speakers and other products on the market for bargain-basement prices.

A9
A9NS-13XX-09.jpg

There is more to the company’s challenges – they are overly reliant on Europe. I was in a B&O store the past summer in France and I got the sense no one ever went there.

BeoPlay A2
A2-14JS-Lo03.jpg

To stay ahead of the competition, the company has taken its designs in a new direction – one I consider to be odd. The goal is to make the products stand out in my opinion, but standing out doesn’t always make you want to buy the product.

To cite specific examples, the BeoPlay A8 is gorgeous with a capital G! The A9 is too funky and the BeoPlay A2 and BeoLit 12 really suck from a design perspective.

BeoLit 12

BL12-13JS-03.jpg

Moreover, there is a trend towards connected audio and having connectivity to AirPlay and bluetooth are great but they would be better off if they owned Sonos to really leverage the trend.

In other words, B&O is like a really elegant man or woman from another era. They understand fine wine and opera but are out of touch with Instagram and Snapchat.

A breath of fresh air could be just what that elegant old person needs to get in step with today’s market. After all, if Apple can buy Beats by Dr Dre, anything is possible.



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