Outlaw Audio (1 Viewer)

[Peter_James]

I have a question. Why is is that Outlaw audio can give you a pre/pro and 7 channel 200W amp for about $2500 when a company like Krell has their Lower End Sep's called the Showcase for twice as much. I mean, when separates were 5,000 for the combo, it was easy to just buy a Receiver. But when I see that I can get something like Outlaw's setup for the same price as the higher end Denon's and Pioneers, doesn't seem to make me want an 'all in one' setup.

any comments?

BTW- I mentioned Outlaw just because i happen to know their prices and was using them as an example. I'm sure there are other separates in that price range.

P.J.

 

[Nick Cerretti]

Actually, it's a really good question IMO. I mean, we have $300 receivers with DD EX and DTS-ES, component switching, and full preouts. And those receivers have 6 amps in them! Now, these amps aren't exactly the greatest in the world, but they aren't bad either. So why aren't we seeing a huge increase of pre/pros under $1000? Or for that matter, under $700? Then, you could almost have a separates package at around $1500.

 

[Kevin C Brown]

Outlaw saves a lot of money by not having dealers and retailers sell their stuff (and take their cut). I.e., see the difference in price between the Rotel 1066, the Sherbourn and AT pre/pro clones, and the 950 itself.

There is also "economies of scale". You sell 10,000 $300 receivers, and your development costs are divided into 10,000.

You sell 500 Krells, and you have a higher development cost per unit. A lot of times too, the marketing dept sets a price point to sell the unit for, no matter what the cost is, to reach a perceived level of quality perception by the customer.

Me? I'm still waiting for *any* kind of pre/pros from Sony, Denon, Yamaha, Onkyo, Marantz, Pioneer, etc.

There have been other threads on this if you look around HTF. (Not one in a while though.)

 

[Chu Gai]

outlaw doesn't manufacture their units either so they have no r&d just some web based ads, plus toss in everything Kevin said...krell i believe still makes all their equipment, but it wouldn't surprise me if the time comes and they outsource more and more. also won't surprise me if they continue to charge certain prices. everyone's catering to a niche market of some sort, and there's gold in them thar niches!

 

[Bill Bradstreet]

Nick, I do have a separates set up for $1,500. I just bought the 950 from audiogon.com for $750 and picked up a Rotel RMB-1075 for $750 as well. So, that's $1,500. It is a great set up. I also have a couple of norh monoblocks hooked up for a second zone as well. So, I've essentially split the cost of the 950 right? ;-)

On topic, Outlaw has a good thing going. I too think others should be playing in this space. Because I don't need to worry about replacing amplification (and therefore spending more money), I'd be happy to upgrade my processor more frequently.

Now that the 950 is in the mix, I have to find a home for my Yamaha DSP-A3090 and another Yamaha receiver.

 

[Kevin C Brown]

I believe that Outlaw does have extensive R&D and design facilities, just that they get Eastech (for the 950), ATI (for the 750, 755, 770) to manufacturer it for them. Kind of like a fabless semiconductor company. R&D/design in-house, contract manufacturing out-sourced.

 

[Chu Gai]

maybe somebody sketching colors and such Kevin. At http://www.outlawaudio.com/about.html you'll see that Outlaw says 'they don't need no stinkin factory'. What they appear to do is survey the market, go to the asian shows and see who's got what and for how much. then they cut a deal and specify colors, fonts, logos...that appears to be about it.

 

[Jason Caudill]

I think that it is quite a leap to interpret "We don't need no stinkin' factory..." to mean

they cut a deal and specify colors, fonts, logos...that appears to be about it.

They claim "We are designers and engineers." Until someone can prove otherwise I think it is better to give them the benefit of the doubt (here we go red rose).

 

[Bill Polley]

Outlaw designs and engineers the product, then they farm out the manufacturing process to a second party who must build to the Outlaw spec. The Outlaw clones are essentially buying Outlaw's R&D, changing the look, and selling for substantially higher prices. The Outlaws are some of the top engineers in audio, with many, many years of experience. In fact, I seem to remember Peter Tribeman, the head guy at Outlaw, was President of NAD back in the early to mid 1980's when they created many outstanding products, and later went on to create Atlantic Technology, of which he may still be a part of. I may be incorrect, but I also seem to recall him being one of the inventors of Dolby Surround, back when he was head of Audio Pulse in the 70's. I am quite sure there are 7 Outlaws, but the rest are low profile.

After typing this, I found this at the Outlaw site mentioned above:

"The "Outlaws" are a group of audio/video product designers, engineers, and marketers who have been in the consumer electronics industry for a long time. Together, we have been involved in the design and manufacturing of over 150 different audio and video products. Many of our designs have won industry awards for innovation and value. In fact, if you are an audio/video enthusiast, there is a very good chance that you own at least one or two products that we have designed.

Through the years, we have worked with each other, or competed with one another, and during this time we have become good friends. When we get together at industry shows, we always trade stories about how we've had to compromise this feature, or lower that performance spec, to meet our company's needs.

A few years ago, at one of our trade show get-together breakfasts (where bragging and exaggeration are the hefty side dishes that accompany the bagels and lox and the bacon and eggs), someone brought up the idea of forming our own company. Fantasies were abundant in that "what if" conversation.

We all wanted to design and manufacture products without corporate interference, and deliver them directly to the consumer. If we could accomplish this, then we knew that we could offer the best values in the industry. At that same breakfast, we also concluded that the explosive growth of Internet commerce could make all of this possible. We realized that the Internet was the quickest, most direct way to reach our potential customers. (It was a very long breakfast.)

On that day , we decided to form a new company and a new brand name, a company that would design and produce its own products and sell them only on the Internet."

 

[Chu Gai]

ok...they're designers and engineers who buy other companies designs and finished products. nothing wrong with that and at least they're relatively up front with it. if the other companies were buying outlaw's designs then outlaw would be getting the cut but they're not. Eastech and others are the ones who are providing the products.
the 950, which has been discussed before, was not an outlaw original as at least 2 other companies are selling essentially the same thing (not as attractively priced though). as to who might be selling it elsewhere in the world, i've no idea. anyways, the point is that there are fundamental reasons why outlaw's product sells for the price it does. were it made in the US, its price would not be as attractive.

 

[David Lorenzo]

Chu:

You are still not understanding. They don't buy others' designs and products. The Outlaws do the R&D for the product, design the specs, and then have another manufacture build it exactly according to Outlaw's design. If another company builds the same product they would be using Outlaw's designs, not the other way around.

 

[Bill Polley]

Exactly correct, David.

 

[Marty Neudel]

>Why is is that Outlaw audio can give you a pre/pro and 7 channel 200W amp for about $2500 when a company like Krell has their Lower End Sep's called the Showcase for twice as much.<

Many good points have been made. There are also factors like build quality and packaging. Take McIntosh as an example of high end. Even their entry level receiver, the MHT-100(~$5k), uses 1% components in critical areas and is assembled by hand in their upstate NY facility. Each unit is then individually tested. Even the packaging is of higher quality. For example every Mc unit is bolted into the inner box.

These are factors that help account for the fact that equipment from manjufacturers like Mark Levinson and Krell seems to last forever. McIntosh has reports of their first amps (built in 1949) still working.

Many people are willing to pay for this kind of quality. Instead of upgrading every 10 months, they will start out with a Rotel or NAD, then save for a number of years until they can afford one of the highest-quality units.

Marty

 

[John Kotches]

Chu,

Would you say that Sun Microsystems is just a marketing company then? They are a fabless company. They don't make their own processors, RAM, Disk Drives or any other components of their systems.

That's the analogy you've just carried through.

R&D and production are seperate functions, and the ability of one company to do R&D work while utilizing another's manufacturing capacity makes good economic sense for both parties.

The company designing a product need not make a massive capital expenditure for manufaturing infrastructure.

The manufacturing company can now run their production lines more fully, meaning a recoup on their investment on the production capacity quicker.

Once you start looking at it from this perspetive, you begin to understand the choices companies make to acomplish their goals.

Regards,

 

[AntonS]

David, are you sure Outlaw did the design in case of 950? My understanding was that 950 was designed completely by Eastech. Outlaw may have been one of the companies that [kind of] spec'd the board, but writing specs is far from doing the design.
Go to the Eastech web site (they have English version), you'll see what they actually do and what kind of R&D staff they have. Much more impressive than Outlaw...

 

[Chu Gai]

John, I don't dispute your points and can surely appreciate your analogy to Sun just as I'm sure you can appreciate that a person who slaps siding on new construction is not a builder, nor are you and I when we specify what options we want on our new car even if we opt for some aftermarket options. However that does take us away from Outlaw by trying to score points in other areas. An early, private communication I had with EastTech suggested at least to me, that EastTech had done much much more of the design (circuitry, sourcing suppliers, FCC compliance, etc.) than it may appear. It's in Outlaw's and others interests who OEM to take as much credit for technological innovation and what not. I certainly oversimplified matters and probably Outlaw owners take umbrage at that. As Outlaw's position solidifies and their financial clout improves, I'd certainly expect them to be able to have more of a say in matters of design of full components such as receivers and whatever else. After all, money talks and for good or bad, they are a long way from the clout of a Sony. They are a long way from having small companies making component parts that innovate and drive down the costs of finished products provide units for evaluation. Nonetheless, by outsourcing manufacturing and all the other little things, they're able to keep prices at a certain level and cater to a different niche than Krell. Perhaps one day we'll see Outlaw or whomever 'produce' high end whatevers. Maybe it'll drive the price down for consumers. I don't see that as such a bad thing.

 

[BruceD]

I agree with both Chu and Anton here. Having been the US marketing arm for Asian engineered and manufactured networking products, what Anton describes is exactly what I participated in.

Essentially, Outlaw was able to take a basic prepro engineering design from Eastech, negotiate some changes and market it.

 

[Mary M S]

On the other hand.

“COMPANY NEWS
OUTLAW 1050 - 2002 EDITORS' CHOICE GOLD AWARD Outlaw 1050, the 6.1-channel receiver that EASTECH produced in collaboration with Outlaw Audio, Inc (a company that offers high quality audio-video consumer electronic products via the Internet), has received another recognition. This time, it's the 2002 Editors' Choice Gold Award from popular home theatre magazine, Stereophile Guide to Home Theatre January2002 issue. Prior to this, the Outlaw 1050 has received rave reviews from other independent audio-video magazines and web sites such as, The Perfect Vision Magazine and Home Theatre Magazine, to name a few. The Outlaw 1050 is manufactured at ATL Electronics (M) Sdn Bhd, EASTECH's higher-end audio electronics manufacturing facility in Malaysia.”
Excerpt from Eastech.

“To avoid prohibitive development and production costs, a company with a design concept (reportedly Outlaw in this case) contracts with a manufacturer such as Eastech to build the product; granting Eastech the right to resell the unit to other companies lowers costs by leveraging production across higher volume.”
Except from SMR International and High Fidelity Review CES 2002 report. On the 950 and reported clones

"The hardware and software of the 950 was developed by and for Outlaw, (no off-shelf or derivative). They consulted with Cirrus Logic etc as all major brands and manufactureors work with DSP suppliers. The Outlaw arrangement with Eastech allows (Eastech) to use aspects of the 950’s design in OEM products they will sell to other companies. With diffrenatied guidelines established by them."
Per Outlaws web site, my summary

In an effort to reduce OEM/ODM costs, It appears Outlaw was being smart with their R&D monies.
I know that the so-called ‘Outlaw Clones’ could not be released till Outlaw fulfilled their original waiting list order. In other words it seems that Outlaw took the design to Eastech to engineer the production layout, cutting and streamlining R&D cost by allowing Eastech to turn around and OEM the design out to other companies once Outlaw had launched.

This seems a maximization of efficiency in product development (R&D) and PUC bottom line for Outlaw to me. Allowing them to sell (under the direct-no overhead) umbrella an incredible product to price piece. IMOP Outlaw seems to be intent on getting the most out my (consumer) dollars. What a novel concept and yet their customer service level is up to par with companies I’ve dealt with who price in the luxury surcharge bracket for platinum level post-purchase product support.

 

[AntonS]

Mary, what's your point? That Outlaw did not design the 1050 nor 950? Well, then you made it.

I may disappoint you regarding Outlaw's R&D practices. The way Outlaw had chosen to develop their products (namely to outsource R&D) is only seemingly more cost efficient, but it is in fact one of the most inefficient ways it terms of development time and after-release life cycle (upgrading, bug fixing, etc.) Believe me, I've been there, done that, and know how it works. Outsourcing manufacturing is one thing and generally not bad, but oursourcing R&D is a bad idea. The 950 history shows it very clearly - constant delays, numerous problems, unacceptably long bug fixing times. Had they kept the development team in house, the initial cost would have been
higher, but on-schedule release, timely bug fixes, possible feature changes and add-ons to keep up with end-user demands, would have kept many customers (now irretrievably lost) and probably more than justified the initial cost. Even if they kept the same price.

Btw, a product like 950 cannot be designed by a mere couple of guys in a reasonable period of time. Just too much stuff in it - lots of analog circuitry, digital circuitry, DSP programming, embedded programming, and much more. Just think that Eastech has 120 engineers in their R&D stuff with various skills to do things like that, plus 200+ other tech personnel.

I also disagree with your conclusion ragarding the clones. To me, if Outlaw could have kept it all to themselves, they most certainly would have. Just think - why on earth would they want to allow and even promote direct competition? But for some reason they could not keep it to themselves. This suggests that the design does not fully belong to them and that Eastech is pretty much in the driving seat as they are free to OEM their product to anybody they want.

 

[BruceD]

Mary,

. In other words it seems that Outlaw took the design to Eastech to engineer the production layout, cutting and streamlining R&D cost by allowing Eastech to turn around and OEM the design out to other companies once Outlaw had launched.

Not to be intentionally mean, but your statement above is just not how the outsourcing of R&D and manufacturing works. Anton pretty much hit it on the head.