B&W being purchased by a Silicon Valley Startup

Discussion in 'Audio Hardware' started by GoldprintAudio, May 3, 2016.

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  1. This is like Alaska Airlines buying Virgin America. Hope the buyer understands the brand and fan base they are buying
     
    Ham Sandwich likes this.
  2. misterdecibel

    misterdecibel Bulbous Also Tapered

    They'll have one of these systems at Burning Man this year:

    [​IMG]
     
  3. Schwinnparamount

    Schwinnparamount Forum Resident

    ssmith3046 likes this.
  4. brimuchmuze

    brimuchmuze Forum Resident

    So it's interesting that majority ownership in B&W was concentrated in one individual (Joe Atkins). Large payout for him I assume. I wish the best for the new B&W. Never owned their products, but they have my respect.
     
    ssmith3046 likes this.
  5. Bubbamike

    Bubbamike Forum Resident

    From Wikipedia:

    "In October 2014 Fiat Chrysler Automobiles announced its intentions to separate Ferrari from FCA; as of the announcement FCA owned 90% of Ferrari.[11][12] The separation began in October 2015 with a restructuring that established Ferrari N.V. as the new holding company of the Ferrari group and the subsequent sale by FCA of a 10% of the shares in an IPO and concurrent listing of common shares on the New York Stock Exchange.[13] Through the remainings steps of the separation, FCA's interest in Ferrari's business was distributed to shareholders of FCA, with a 10% continuing to be owned by Piero Ferrari.[14] The spin-off was completed on January 3, 2016.[13]"

    New money may mean we believe in your name and we're going to mine it for all it is worth and then we'll spin you off with no reputation and tons of debt. We've seen it time and time again, great old companies milked for them reputation and name and then there is nothing left, Acoustic Research, Sherwood, RCA, Zenith, Bell and Howell, Fisher, etc. The current owner of the Sherwood name has given the name a new life but it was low on the totem pole for a long time. RCA's name is on all kinds of dreadful junk and so is Bell and Howell. AR may be making a recovery but who knows. Other companies are bought by those who want to kill the competition. They get bought and then disappear.

    In this case I suspect that we're looking at a company that will either totally cheapen the name or one that will try to turn it into what Meridan and Linn have become, life style companies.
     
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  6. Ham Sandwich

    Ham Sandwich Senior Member

    Location:
    Sherwood, OR, USA
    A problem I see is that the company buying B&W is a Silicon Valley startup. Startups in Silicon Valley aren't known for their longevity. The goal of most startups is to live long enough and be successful enough to be bought out by a bigger company and the founders and early employees get a big payout. The product or software the startup developed gets depreciated and eventually discontinued by the company that bought the startup. The customers that bought the software or product are left with obsolete hardware or software and are not happy about the situation. The founders are happy. The customers are not. That's the Silicon Valley way. Look at what's been bought by Google as an example. To see B&W absorbed into a Silicon Valley startup and the Silicon Valley churn is not something I want to see happen to a high-end audio company like B&W. And is not something I want to see happen to the customers of B&W. Especially to the customers who have bought the higher-end speakers from B&W. That's not an insignificant investment by those customers.

    I't a bold strategy by B&W, let's hope it pays off for 'em.

     
    sunspot42 likes this.
  7. Barnabas Collins

    Barnabas Collins Senior Member

    Location:
    NH
    Too bad. And only days after Tannoy announced it's moving operations to China...
     
  8. GoldprintAudio

    GoldprintAudio Forum Resident Thread Starter

    Location:
    Lexington, NC
    Never said it was a bad thing..... I just posted the link for others to see as it had not been posted yet.
     
  9. Radio Hannibal

    Radio Hannibal Forum Resident

    A combination of audiophile equipment and smart home technology is my guess. Sounds very intriguing.
     
  10. Upinsmoke

    Upinsmoke Well-Known Member

    Location:
    SE PA
    I'm having problems with connecting my rooted Nexus phone to the speaker though. Anyone else having this problem?
     
  11. IAMBLEST

    IAMBLEST Forum Resident

    Location:
    Dubai
    Exactly. They will go for mass market penetration the way of beats by dre or bose.

    The quality will definitely take a hit.
     
    sunspot42 likes this.
  12. No Static

    No Static Gain Rider

    Location:
    Heart of Dixie
    More like one of these offerings from Acoustic Research:

    [​IMG]

    Remember them?
    90 bucks to your door.
     
  13. Ric-Tic

    Ric-Tic Forum Resident

    Location:
    Stockholm
    No, but I experience a problem connecting my Apple Lightning Cable™ to those weird white and red receptacles.
     
  14. eddiel

    eddiel Senior Member

    Location:
    Toronto, Canada
    You could, but you'd need the capital to do that. It's not just a couple of people. You might have a couple of people in house running it, but you'd be contracting work, etc. This is a far bigger undertaking than a couple of people IMO. How do you get the capital to hire in the expertise? Borrow?

    Also, according to the article, Atkins owns 60% and the remaining is owned by two other investors and they'll cash out. Atkins will also take a significant ownership stake in the new company and he'll be the CEO. It could be simply down to, we need the expertise, we need to get the other investors out, this deal accomplishes both.

    I haven't seen the numbers or the analysis so I can't say why they chose one strategy over another but this doesn't feel out of the ordinary for me business wise.
     
  15. eddiel

    eddiel Senior Member

    Location:
    Toronto, Canada
    I think many people, rightly or wrongly, assume it'll lead to a watering down of the brand since they may believe the focus will shift even further from the higher end audiophile speaker lines to items they can sell for less to a wider customer base.

    Buy the sounds of it, the company felt they needed to do something different in order to stay relevant and continue to grow or even just survive. Maybe they took at look at the market and thought, the demand for the higher end items isn't going to grow or perhaps even decline over time? I have no idea, just conjecture on my part. But I wouldn't be surprised if they didn't look at and consider future demand.
     
    Rolltide likes this.
  16. Rolltide

    Rolltide Forum Resident

    Location:
    Vallejo, CA
    If B&W were financially solvent it wouldn't be much of an issue to bring in contract programmers to write the cloud integration piece. This isn't a trip to the moon we're talking about here. Companies with a lot less resources then B&W have pulled off cloud. Trust me, it's a red herring.
     
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  17. SamS

    SamS Forum Legend

    Location:
    Texas
    Hiring a bunch of developers is one thing. Having the leadership vision and execution strategy of implementing such, is another (more difficult thing) all together. Sounds like B&W doesn't have the latter.
     
    eddiel likes this.
  18. jupiterboy

    jupiterboy Forum Residue

    Location:
    Buffalo, NY
    Makes me think small, like miniaturization—small speaker products with the brand name for personal audio.
     
    Rolltide likes this.
  19. Rolltide

    Rolltide Forum Resident

    Location:
    Vallejo, CA
    Without access to B&W's books its all just speculation. It could be as simple as guy cashing out and getting rich. All of the minority shareholders are cashing out too, maybe they don't think generation soundbar has much use for a big speaker company and feel its time to divest.

    But my two personal opinions on the matter are that no, cloud integration wasn't a driver here, and that no, it's not going to be business as usual at B&W.
     
    sunspot42 likes this.
  20. eddiel

    eddiel Senior Member

    Location:
    Toronto, Canada
    Trust is irrelevant with this discussion since we're operating on the little information we were given in the article. Unless of course you're asking me to trust you because you know something we don't but can't divulge the details :)

    Anyway...the point of my original post, wasn't necessarily to critique or comment on their chosen strategy. I was merely pointing out that this sort of deal doesn't sound out of the ordinary to me, as others had expressed surprise.

    I have no idea what the resources are at B&W so I can't comment on their ability to fund their plans internally. But, many companies are financially solvent yet don't have the resources to invest in new ideas without additional capital. Many of the companies I worked for had no cash flow issues, yet to grow the business they required more capital which meant borrowing, etc. So even if B&W is doing well, it doesn't mean they have the billion dollar (or whatever amount) bundles of cash that Apple has laying around :)

    I also don't have any idea, other than the basics covered in the article, of their wider plans when it comes to integrating with new tech. But I do feel some are over simplifying the process. Ignoring other reasons for the deal and just thinking about integration with other technology, it isn't just a simple matter of hiring a few people. It requires far more than that IMO.

    In my previous post, I did address, a little bit anyway, that there may be other things that needed to be addressed, that will be addressed with this sale i.e. the other 40% investors.

    I agree, it won't be business as usual at B&W, that's why they're doing the deal; because business as usual isn't good enough in their opinion.

    It's difficult to comment without more information anyway. It's all sort of what if's and what for's.

    As long as they keep their high standards and continue to provide excellent speakers, I have no problem with this anyway.
     
    sunspot42 likes this.
  21. Rolltide

    Rolltide Forum Resident

    Location:
    Vallejo, CA
    This is all a fun speculative guessing game. We don't need to be right or wrong here.

    Continuing on that theme, ff I had to guess, I'd say its probably business as usual with the products that are made in China, but that factory in the UK where the 800 series are built might not fit into the plans of a California based company.
     
    sunspot42 likes this.
  22. lonelysea

    lonelysea Ban Leaf Blowers

    Location:
    The Cascades
    They've already started doing that. Witness the MM-1 computer speakers and their low-priced headphones (sold at Apple stores!).
    There's more money in selling loads of these things rather than small numbers of high-end speakers, presumably.
     
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  23. Brother_Rael

    Brother_Rael Senior Member

    By a country mile. Just look at sales of headphones against sales of hi-fi. Doesn't bear comparison, headphones are miles ahead.
     
  24. DrZhivago

    DrZhivago Hedonist

    Location:
    Brisbane Australia
    Quo Vadis B&W? :(
     
  25. Bananas&blow

    Bananas&blow It's just that demon life has got me in its sway

    Location:
    Pacific Beach, CA
    Being a B&W fan I'm concerned. But I always buy my speakers used. I'm pretty sure a used pair of 802D3's would fit any hi-fi needs I'l have for the rest of my life, even if it takes me 5 years to save up the money.

    I think the good news is that a great sounding speaker doesn't stop sounding great, and if you love B&W for everything they've made so far, you can just buy a high end pair and listen to it until your ears don't care anymore.
     
    sunspot42 likes this.
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