SME will exit the tonearm retail and OEM business with immediate effect - this is a bummer

probably the same reason U-turn doesn’t make SME competitors

 

Cool. So you don't really have a point.

 

The same thing happened to me 20 years ago, when I wanted to buy a Kuzma arm. I bought an SME V instead.

 

Just talking about audio gear on an audio forum, my friendly forum member!

 

My take--new mgmt comes in/tonearm margins too low at then-current pricing/new mgmt raises prices to meet margin demands of investors/market not receptive/decides on easily reversible move to limit production except when tied to highly profitable turntable business.

Or maybe the order phone line for the $25k Garrard 301 was always busy so they needed to switch the tonearm phone line over and take more Garrard orders?

 

Very saddened at this news. As SME has been one of the best in precision tonearms for so many years.

 

They are trying to move from audiophile market to luxury one. Later customers doing way less research and way more aware of brand names and "synergy". For them Dr feickert TT with SME arm sounds like Cartier watch with Rolex bracelet. Not acceptable )).
Many brands on different fields tried this leap, with success rate being marginal.

 

Maybe that someone doesn't like the sound of direct drive tables.

 

A bunch of suits bought a family run business. Let's put up the arm prices and make a ton of money. Then oops nobody is buying the arms so let's stop selling them. We can rely on our new expensive integrated TT packages. 2021 - looks like the games up nobody wants out TTs will have to stop production and just do MOD engineering jobs. 2023 The games up, sorry workers you are all redundant and we spent your pensions.

 

Putting aside your crystal ball, why was said family owned business for sale? Were they just tired of making money selling affordable tonearms?

 

Plenty of very successful family businesses get sold every day. Often times the next generations have gone in other directions or have no interest in the family biz.

Your crystal ball suggests it was sold because it needed to be sold or some other poor performance reason. Not always the case. No idea why SME was sold—do you?

But your macro point about the “evil” sme is taken. Companies are “for profit” not “for sentiment”

 

Yes - back when I paid $2500 to purchase just a tonearm from a family owned business, I was a blue collar audiophile pulling myself up by my bootstraps. It wasn't until they sold the company and raised the price that such an expenditure became a luxury.

 

I can’t imagine Kanye buying an SME. Or Post Malone or Richard Branson or a Versace. It doesn’t look the part. Maybe one of those silly 12 motor Clearaudio chrome turntable cat towers. SME’s look pretty drab. Doesn’t look luxury.

 

I'd really love to see the margins on SME tonearms. Especially my M2-R series with a standard armtube. I understand "hand made precision" etc but there's just no way they're not making a fortune there.

 

In the US, if your family business is valued at more than $11.5 million, and you die today in the US, your heirs will have to pay federal inheritance taxes on the valuation over that amount. So, if it is worth say $20 million, they would have to pay >$2 million to the feds simply to take possession of their parent's business.

So it is not always so easy to pass-on the family business to the next generation if the cash doesn't exist to pay all of the taxes which are due upon the death of a parent. This means that many families with businesses have no choice but to sell their family-owned business simply to be able to pay the taxes that the next generation will owe when they inherit it.

So this could easily explain why SME sold-out to a larger company.

 

no idea what their margins are/were.

What’s your theory on why they did this? Do you think they had a screamingly successful business and they decided to cut their nose to spite their face?

there’s more to margins than material cost and selling price.

 

They're getting out of the OEM business. So people like Oracle will probably be contracting with Jelco for their tonearms. I like Jelco arms so that's a good thing as I see it.

 

They are getting out of selling arms to their normal customers not only other TT manufacturers. The designs are pretty old now so raising the prices I guessed was to increase profit margins. Probably backfired by causing sales to plummet. SME were expensive but just affordable. They became unaffordable to their traditional market. They brought out a couple of more stylish turntable models and maybe these are selling relatively well. However I was always under the impression that the tonearm business was the major part of production as the TTs were always near to unaffordable to most. If they are concentrating on the very high end TT market they will lose long run. If I had £25K to spend i would be looking at Kronos for sound or Clearaudio for style. At £5K integrated package Project have the market with sister company Eat at a slightly higher level. Then there are a few other German manufacturers in the high end market. All will sell you a tonearm separately. This just does not make commercial sense to anyone knowing the high end arm and TT market. I was hoping the extra selling prices were to fund development of new arms to replace the 35 yr old designs. This really does not make sense. I would not be confident buying any product from a company being run this way. Thrashing your traditional market to jump sideways into something quite different is very risky. They have instantly alienated most existing SME arm owners. I've seen this type of behaviour before with takeovers and it doesn't end well. A note on Garrard (now part of SME) - from what I have read any 301s so far are NOS that Loricraft had mounted into a newly designed plinth.

 

SME’s decision strikes me as most unfortunate. As stated in their own announcement, SME has been selling tonearms since 1959 so to choose to exit this market entirely is a radical and bold decision. I hope it works out for them.

I have two SME tonearms and will keep them in service for the foreseeable future even as more modern (e.g. Kuzma 4-point or Triplanar) or different (e.g. Schick) tonearms get mounted to either of the 2 turntables in my system. Using a IV tonearm as a second tonearm affixed with a mono cart was contemplated for my Loricraft Garrard 301.

I am not sure of the new directions that are being undertaken by either SME or Loricraft will yield in the future, only that the current changes are unsettling and even somewhat upsetting. At least for those that have dealt with these companies when it felt like dealing with companies within an audiophile-centric, small industry setting. Terry at Loricraft is one of the nicest, most affable persons to work with as a customer/client. I can’t fault any of the principals at either of these companies because it is impossible being on the outside to know the true state & condition of these companies. These companies have earned their credibility and reputations and I can only wish them well.

It is possible the hobby and the industry is changing right under out feet and, as hobbyists, we are not attuned to the change. And we of course need not plan for a company’s future for a changing market projected 5 or 10 years hence. In the bigger picture, it does feel a furtherance of broader business trends towards more effectively monetizing their markets. Doing this as perhaps necessary to survive and prosper as a company even within an industry as comparatively small as one in the audiophile market. Oh well, such is the modern world.

 

It's not greed, this is mostly about CURRENCY fluctuations. Look at the chart of GBP v USD. It's trending LOWER which means the GBP has LESS purchasing power v USD. So, it takes MORE USD's to get the same purchasing power in GBP. You'll be seeing a lot more of this in the near future. It used to be near the 1.60 range, now it's 1.32. BREXIT has caused the GBP to selloff in the near term. Once they actually BREXIT then GBP will RISE dramatically. I'm watching...

 

Jelco's phone has not stopped ringing since this announcement was made.

 

Not sure I agree with that Brexit/currency analysis. But I agree with many that this is a rash move by SME.

It doesn't project any sense of dealer or customer consultation. And givennyhayostbof SME's business is Ministry of Defense work, I can't see how this is driven by any fear of shrinking business volume.

I hope they hang onto their IP and machining/manufacturing competence.

 

Lower pound should help sales. Nothing to do with brexit. I think they are turning into another Linn only worse. This is all about a delusion that you can play on an established name and charge exorbitant sums for their new lifestyle turntable designs. Why they won't let people buy or choose arms independently is a head scratcher. Maybe they want to phase out the current designs for new ones eventually? I think sales have tanked due to the price rises. Jelco are just not anywhere near the same engineering quality as are few other arms so there are not so obvious alternatives. Others mentioned as 'better' such as Triplanar are even more expensive than the latest inflated SME prices in the UK. I can see only Rega having the capacity to take up the slack in this market and they do not provide enough adjustability or a removable headshell option. Other options such as Audiomods or Audio Note just don't or are capable of making enough arms. Others have had known QC issues.

 

A lot of people can stretch to $2500 but not so many can or are willing to pay $5000 for the same thing months later.

 

Some people satisfied with their TT and want to change/add tonearm. There are turntable around with 3 tonearms (may be more, I just never heard), and there are no two turntables - one tonearm setups I know. So you always need those extra tonearms. Now this option with SME is gone.