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The Rise of Audio Negociants

Vasr

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#1
It is interesting to me that the audio industry is going through the same transformation as the wine industry in "negociant" products coming to market especially at lower end.

Compared to the "Chateau" brands such as Benchmark, Paradigm, Schiit, etc to just name a few of the many that design and build their own (even if off-shore manufactured).

It is a bit more nuanced than just OEM. There seem to be the equivalent of all the three types of Wine Negociants emerging in audio.

1. Those that just get pre-made product and label them to market it - Monoprice with ATI is a good example.
2. Those that make some small improvements on their own or have the whole thing built to their specs with minor changes - Many Outlaw, Emotiva, IOTAVX, products
3. Those that buy some specific "grapes" from outside and blend with their own - NAD with Class D amps (or any of the brands with Class D modules)

Generally, I think this is a good trend. Increases competition, allows the best stuff that Asians can build to give them the marketing and sales expertise they often lack and more important allows good stuff to come out at lower prices and to occupy niche markets.

What I don't like though is some of them claiming the equivalent of "Chateau grown and bottled" when it isn't or their contribution is minimal/cosmetic.

A good example is IOTA with their IOTAVX 7.1 4K/HDR pre/pro. The description starts as "The IOTAVX AVX1 is the successor to the highly acclaimed AV1. Developed from the ground up,..." All of this is highly misleading bordering on unethical advertising in my opinion.

The AVX1 has zero to do with AV1 as far as I know in anything inside it. It is a successor in the sense that the negociant IOTA acquired the Nakamichi brand rights (not sure what all it included that allowed them to claim AV-1 as their product) and they also label and sell a product called AVX1 as the next product - so loosely a "successor". But the tagline is designed to make one believe that the new product is somehow an evolution of a famous product inheriting its design or designers.

The second line isn't true either in what it is meant to imply.

The DAC board in it is a Cirrus Logic late-2000 era CS42528 8-channel DAC chip that made its appearance (not just the chip but the board design itself) in the now-defunct NuForce AVP-18 which was the first digital only pre/pro but only did HDMI 1.4. The same board (split into two) seemed to have appeared upgrading the HDMI to 4k capable in the Emotiva MCA-700 and IOTA now seems to be using the exact same board adding XLR outs. I suspect they all come from Hontron Electronics, a Taiwanese company that seems to have had close ties with Nuforce and now NuPrime. So who actually "developed it ground up" is a bit fuzzy but it is definitely not IOTA Electronics.

I think these common origins are OK as far as negociant business models go. I wish more people would build such front-ends at these lower prices that one can mate with suitable amps of their choice.

But the aggressive marketing style rubs me the wrong way.
 
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restorer-john

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#3
It is a bit more nuanced than just OEM.
Hardly. The three scenarios you listed above have been employed in the high fidelity industry for well over 50 years.
 
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Vasr

Vasr

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Hardly. The three scenarios you listed above have been employed in the high fidelity industry for well over 50 years.
Interesting. Reading your posts, it seems like you came out of the womb with a multimeter and a soldering iron in each hand. :)

So, what are some of the well-known negociant brands of the past? I know some houses have used relabeled equipment to fill a gap in their lineup once in a while but weren't aware of brands that relied on that business model. But you know the history far more than I do, I am sure.

Anyway, my motivation was more about how they misrepresent these in their ads.
 

Wes

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#5
Interesting OP - note that both Drouhin and Jadot have expanded into being growers (in Oregon, the best place for Pinot outside the Cote d'Or tho arguably a "different wine"). Drouhin sent his teen-aged daughter to Oregon where she started out at the bottom - rolling barrels, etc. She now runs DDO.

We now need a post on the importance of Elevage, which I suppose would be analogous to breaking in components...
 

phoenixdogfan

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#6
Interesting. Reading your posts, it seems like you came out of the womb with a multimeter and a soldering iron in each hand. :)

So, what are some of the well-known negociant brands of the past? I know some houses have used relabeled equipment to fill a gap in their lineup once in a while but weren't aware of brands that relied on that business model. But you know the history far more than I do, I am sure.

Anyway, my motivation was more about how they misrepresent these in their ads.
Wouldn't things like color televisions and washing machines sold under the Sears Kenmore brand be an example of this?
 

Hugo9000

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#8
Retailers like Sears, Radio Shack, JCPenney, Montgomery Ward, etc. did all of this decades ago. Some items rebranded but identical to a product from the OEM, or identical to other rebranded items sold in some other department store, and lots of things made as exclusives. It is definitely nothing new. The clothing industry has been doing this for decades as well, along with food/grocery brands (A&P had private label coffee and other items over a century ago), over the counter medications, all manner of appliances large and small, tools, etc. Private label/store brands/contract manufacturing...

A few specifics in audio electronics:

Radio Shack/Tandy from the late 50s onward. Realist (very briefly) then Realistic and Optimus (speakers) products made by Foster, Hitachi, Pioneer, maybe some others. Not sure which companies made the turntables for them.

JCPenney had MCS or something as their store brand, don't know who actually made the gear. I think Matsushita (Panasonic/Technics) made at least some of it.

Foster was also known for their relationship with Denon. That seems to be better known than the connection with Radio Shack.

I am sure other retailers and brands in Europe and other regions had similar arrangements.

Just thought of another that goes back well over a century--porcelain made in Limoges, France.
 

restorer-john

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#9
Take turntables for instance, the primary source component for many decades. CDC made TTs for just about everyone (Teac/CEC/CDC/Marantz/Kenwood/Sanyo/Pioneer/Hitachi etc) with subtle changes to the arms (mostly Jelco manufactured/supplied and tweaked for each brand to look different), the basic styling, and used motors often sourced from Matsushita or Japan Servomotor.

People love to think the Nakamichi CT turntable was built by Micro (Seiki) but it was actually built by another OEM, Fujiya Audio who also built for Luxman/Sharp/Kenwood/Yamaha/marantz AND Micro Seiki.

Cassette decks were made by several Japanese companies to order for other large Japanese and worldwide companies. Pioneer decks were tweaked for Phase Linear (pioneer bought Phase linear). The Pioneer PLL-1000 turntable was also made in a slightly different styling and badged Phase Linear.

Hitachi built a heap of very high quality cassette decks for Radio Shack, titanium R&P headed, three head decks which were just subtly different in switch front panel layout to look different and offer exclusivity.

Kyocera/Cybernet built the world's first OEM CD player for Akai, Phase Linear, Tensai, Rotel, Micro Seiki all with completely different front panels but all identical inside.

Toshiba built CD players for NAD, Onkyo, Realistic (Radio Shack) that were physically different on the exterior and with slight tweaks to make them just exclusive enough to be called different- when they weren't.

Amplifers/Receivers used power amplifier modules from Sanyo, Matsushita etc. An OEM with the PCB designation "comet" made entire amplifier modules which I have seen in Teac/Akai/Sanyo etc. I even have some of them someplace, I can dig out- gorgeous little modules built in the 1970s. (I'll dig a few out today sometime and post a pic) Around 40-80 watts each, depending on the OPTs, transformer and filter caps. Entirely modular. Remarkably similar to the Luxman L-xx series power amp stages, and I've always wondered if Lux had a side business supplying other companies.

I have a ton of other information on who made who, but it's a long read (40 pages) based on a lot of home market T-tag research done by Axel at TVK back in the day. Let me know if you want a link posted in this thread.
 
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MakeMineVinyl

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#10
Teac and Akai made reel to reel tape machines for Ampex and Roberts respectively.
 
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#11
A good example is IOTA with their IOTAVX 7.1 4K/HDR pre/pro. The description starts as "The IOTAVX AVX1 is the successor to the highly acclaimed AV1. Developed from the ground up,..." All of this is highly misleading bordering on unethical advertising in my opinion.

The AVX1 has zero to do with AV1 as far as I know in anything inside it. It is a successor in the sense that the negociant IOTA acquired the Nakamichi brand rights (not sure what all it included that allowed them to claim AV-1 as their product) and they also label and sell a product called AVX1 as the next product - so loosely a "successor". But the tagline is designed to make one believe that the new product is somehow an evolution of a famous product inheriting its design or designers.

The second line isn't true either in what it is meant to imply.

The DAC board in it is a Cirrus Logic late-2000 era CS42528 8-channel DAC chip that made its appearance (not just the chip but the board design itself) in the now-defunct NuForce AVP-18 which was the first digital only pre/pro but only did HDMI 1.4. The same board (split into two) seemed to have appeared upgrading the HDMI to 4k capable in the Emotiva MCA-700 and IOTA now seems to be using the exact same board adding XLR outs. I suspect they all come from Hontron Electronics, a Taiwanese company that seems to have had close ties with Nuforce and now NuPrime. So who actually "developed it ground up" is a bit fuzzy but it is definitely not IOTA Electronics.

I think these common origins are OK as far as negociant business models go. I wish more people would build such front-ends at these lower prices that one can mate with suitable amps of their choice.

But the aggressive marketing style rubs me the wrong way.
Interesting thread - but I think of few of your presumptions are slightly off.

IOTA didn't acquire the brand rights to Nakamichi (UK) - for all intents and purposes IOTAVX (IOTA Enterprises Limited) is Nakamichi (UK) by another name - the person behind IOTAVX is (was) also the owner of the Nakamichi (UK) brand. Licensing the Nakamichi name was expensive hence the switch to IOTAVX. So, as Nakamichi (UK) marketed the AV1 I guess IOTAVX can legitimately claim that the AVX1 is a successor product. I don't think anyone was really fooled into thinking that Nakamichi (UK) was in any way related to the original Japanese Nakamichi company (except perhaps What Hi-Fi ;))

I don't think their products are made by Hontron Electronics in Taiwan - I think they are made by Tonewinner in China - Tonewinner may or may not be responsible for the development of these products themselves (they do sell them under their own name) and then probably modifies them on request - IOTA and Nakamichi consistently use XLR inputs/outputs on their products where Emotiva do not.

I own a pair of 6 year old Nakamichi AVP1 7 channel power amps (£399 each) - they are identical to the newer IOTAVX AVXP1 (£1059 each) with the exception that the IOTAVX version now has a switch-mode standby power supply, probably to meet EU regulations. I use mine to drive active speakers.
 
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Vasr

Vasr

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Thread Starter #12
Interesting thread - but I think of few of your presumptions are slightly off.
IOTA didn't acquire the brand rights to Nakamichi (UK) - for all intents and purposes IOTAVX (IOTA Enterprises Limited) is Nakamichi (UK) by another name - the person behind IOTAVX is (was) also the owner of the Nakamichi (UK) brand. Licensing the Nakamichi name was expensive hence the switch to IOTAVX. So, as Nakamichi (UK) marketed the AV1 I guess IOTAVX can legitimately claim that the AVX1 is a successor product. I don't think anyone was really fooled into thinking that Nakamichi (UK) was in any way related to the original Japanese Nakamichi company (except perhaps What Hi-Fi;))
Thanks for the details. My point wasn't based on whether iIOTAVX was related to original Japanaese Nakamich but whether the AVX1 was in any way related to AV1.

To capture the main logic:

1. IOTAVX has/had the rights to sell Nakamichi AV1. In this we both agree regardless of how this came about (I did mention I wasn't clear about that but it is irrelevant to the point being made). I don't think Nakamich UK/IOTAVX was in any way involved with the design of the AV1 but the logic does not change even if they did.

2. IOTAVX calls the AVX1 as a "successor" product t AV1. This in a literal dictionary sense is true but what I am pointing to is the disingenuity of that use.

Consider an analogy. Let us say Chevy stops production of the Corvette in 2022. Asks Tesla to create a version of its roadster and change the wheels, seats, paint scheme, battery pack while keeping the power train and suspension the same and sells it as a Chevy labeled roadster and say it is a "successor" to the famed Corvette. There is nothing wrong with doing the former but their marketing would be problematic to say the least. Don't you think they will be laughed at by the industry and the consumers and accused of bad faith advertising?

When you call something a "successor" to another known product to market by association, it implies something more than just I sold X earlier and I am selling Y now. It implies that you have inherited the lineage somehow - in what made the earlier one famous. You improved the original design or used the same designers, etc.

The AV1 and AVX1 have nothing in common in design or designer which was my point. They don't even share the same lineage.

First of all, the AVX1 and its earlier incarnations are very simple boxes with one or two boards.

Here is the NuForce AVP-18 which as far as I know came up with the original concept of an all digital pre/pro, the functionality and chose the necessary chipsets and processors for it. They worked with a Asian supplier which I believe is Hontron because they acquired the rights to NuForce when it was sold to Optoma (NuPrime acquired the high-end products of NuForce).

NuForce-AVP18.jpg


This was back in 2012 or 2014. The DAC and the processor that gave it the EQ features continue down its evolution.

Next is the Emotiva MC-700 OEMed presumably from Hontron or some entity Hontron licensed it to (I doubt it is Tonewinner which is too big to do this kind of licensing). In this model, it is exactly the same chipset for the main board (including some common circuit layouts) but the board was split into two with some circuit layout changes. Functionally, it was exactly the same as the NuForce and had the same EQ features and DAC capabilities. It upgraded the HDMI to 4k. The power supply seems to be a minor revision.

emotiva MC-700.png


Now here are the exact same boards as the MC-700 used in the IOTAVX AVX1

iotavx7.1-1.png

iotavx7.1-2.png


Yes they added the balanced XLR outputs to it in a similar incremental evolution but the main feature set and functionality is exactly the same including the way you use the parametric EQ (it is the exact same chip originating back to its use in the NuForce). Exact same boards as the Emotiva MC-700.

Now, what way can this be considered a "successor" to a completely different product AV1 other than this company sold both one after the other while sharing nothing else and using a product already sold under different labels.

And when they claim, it is "Developed from the ground up...", it is literally true, somebody did develop it from the ground up but the implication that somehow IOTAVX had anything to do with it other then give a requirement to add XLR to an OEM supplier is the disingenuous part especially combined with its preceding statement.

This is what triggered the association with negociants in my head. Most of the negociants are "merchants" by definition who (with a few exceptions) don't necessarily have any skills to do any production/design skills themselves. Their strength is marketing and sales and branding which is what I think IOTAVX is doing.

And as I have said before, those kinds of arrangements are OK by me. They are beneficial to the consumer in the end if they fill niches ignored by others or make products available at much lower prices otherwise not possible. But it is the marketing spin that I find objectionable.
 
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Vasr

Vasr

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Thread Starter #13
Sometimes, what the brand selling it contributes to can be more than just requirement specs. For example, with NAD and the Hypex arrangement for the amplifier boards.

Another example of where a "negociant" trying to hide the origin and getting some flak for it is the Outlaw 976 Pre/Pro.

976rear.jpg


People discovered that its is the exact same description as a Fortex unit from Hong Kong sold under different labels.

fortex_avp.jpg


An Emotiva rep on the Emotiva forums posted that the Outlaw board looks exactly like the evaluation board unit they got from Fortex that they rejected. This could just be a competitor dissing Outlaw. But Outlaw had to post some details of how much they influenced the design internally (more than a straight OEM and less than what they had led people to believe).
 
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Vasr

Vasr

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Here is another interesting find in the murky world of Audio negociants that people may not have heard of.

Would you buy your HiFi equipment from a company called OutdoorSpeakerDepot? Or how about OptimalSpeakerDesign instead? Better? Even they can't seem to make up their mind using those interchangeably in products sold as OSDAudio via Amazon.

The site for OptimalSpeakerDesign Audio (https://www.osdaudio.com/about-us) claims

"Our U.S.-based research, development and design team, is supported by a network of cutting-edge acoustical, mechanical and electrical engineers. Together, we create products that combine the latest technology with ease of use for a quality sound experience."

Their sales outlet at OutdoorSpeakerDepot looks like a Monoprice type retailer

https://www.outdoorspeakerdepot.com/

Here is where it gets interesting. They sell a 5-channel power amp

https://www.outdoorspeakerdepot.com.../200w-5-channel-class-h-stereo-amplifier.html

OSDAudio5chAmp.png


which was "introductory priced" at less than $500 and with a first time coupon of 10% to visitors to the above site, they sold a bunch of these as external amps and people seem to be happy with it, even more so when it was discovered that this was a debadged and discontinued Carver labeled amp HTA5A but at half the price.

Carver.jpg
OSDFront.jpg


Are they the OEM for these amps? Are they liquidators for brands? Are they a knock-off company?

But here is where it gets even more interesting and murkier.

People noticed that this looked like an upgraded version (adding XLR inputs) of "Designed in the US" Outlaw 5000 with more than passing resemblance both inside and outside (although Outlaw calls it Class A/B and OSD calls it Class H :) )

Outlaw5000rear.png
Outlaw5000innards.png


Outlaw5000inside.png
OSD5inside.png

Which one of the above two is which... :)

Or like the newer Outlaw 7000 with XLR inputs
Outlaw70007chRear.png


Good luck finding out who grew what grapes and where in this world...
 

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sergeauckland

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#17
Many years ago, there was a paper publication called something like the Journal of the Japanese Electronics Industry (JJEI) which had pages and pages of products which would later turn up branded something familiar. Pickup arms, turntables, amplifiers, you name it, they had it.

I don't see it being any different now, only that it's China rather than Japan doing it, and it's on-line rather than on paper. There's a whole raft of stuff on eBay and Amazon that's either branded something random, and/or if you buy XXXXX and send them the artwork, they'll brand it with whatever graphics you want. Some of the stuff is quite good, some of the stuff is rubbish. I don't think any of it is properly CE marked although a lot of it has the CE (China Export) mark. I've bought the odd bit of stuff, most recently a mains sequencer to switch on all my equipment in the right order, for less than I could even buy the parts to make my own, but I did make sure it was properly earthed internally and any caps across the mains properly rated.

S.
 
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Vasr

Vasr

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Thread Starter #18
The big difference is that these are much more legit than those eBay gizmos and these things involve some serious design work by "somebody". Sold by recognized brand names in the US with all the certifications.

The interesting part is some of these brands getting exposed for overstating their participation in the design and production - i.e., negociants claiming to make estate grown wine.
 
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