Why are AVRs and AVPs so expensive?

[HooStat]

I'm pretty sure the Denon 3800h could be turned into the same level $1,000 AVP and a great $1,500 AVP with higher DACs and better pre-outs.

You could also argue that these products should be no more than $500. What is the basis for choosing $1,000? And why should it cost $500 for better DACs and pre-outs?

 

[bungle]

I am sorry but here are a few things that were not around "a few decades ago": DSP

This one from 90’ies:

Yamaha DSP-A1 specifications Yamaha

Sure you can find a list of things that are different, but that is just natural evolution. New codecs come and go, new inputs come and go. At the same time the above Yamaha had features that are hard to find on todays designs, not just legacy stuff.

 

[techsamurai]

You could also argue that these products should be no more than $500. What is the basis for choosing $1,000? And why should it cost $500 for better DACs and pre-outs?

I explained why - Denon and Marantz sold them for $1,000 not that long ago. I'm adding $500 for $125 in upgrades (the DACs and perhaps improved pre-outs) marked up by 4x to $500. A $1,500 AVP would cost $375 to manufacture.

The cost of the ES9026Pro (8 channel) for quantities over 100 is $24.84 and companies would get much better pricing than that. That would be insane for a $1,500 AVP - don't ask what DAC you normally get at that price range. Your $3 pencil is probably more expensive and the DAC is like the brain of the unit.

It's quite ironic that the 9038Pro for 8 channels costs $62. Does anyone know the price of an AVR that uses it, assuming one exists? I'm guessing Trinnov might.

https://www.mouser.com/c/semiconductors/audio-ics/audio-d-a-converter-ics/?m=ESS%20Technology&series=ES9038

https://www.mouser.com/ProductDetail/ESS-Technology/ES9026PRO?qs=yqaQSyyJnNhU2nm3v27xMw%3D%3D

 

[peng]

I explained why - Denon and Marantz sold them for $1,000 not that long ago. I'm adding $500 for $125 in upgrades (the DACs and perhaps improved pre-outs) marked up by 4x to $500. A $1,500 AVP would cost $375 to manufacture.

The cost of the ES9026Pro (8 channel) for quantities over 100 is $24.84 and companies would get much better pricing than that. That would be insane for a $1,500 AVP - don't ask what DAC you normally get at that price range. Your $3 pencil is probably more expensive and the DAC is like the brain of the unit.

It's quite ironic that the 9038Pro for 8 channels costs $62. Does anyone know the price of an AVR that uses it, assuming one exists? I'm guessing Trinnov might.

https://www.mouser.com/c/semiconductors/audio-ics/audio-d-a-converter-ics/?m=ESS%20Technology&series=ES9038

https://www.mouser.com/ProductDetail/ESS-Technology/ES9026PRO?qs=yqaQSyyJnNhU2nm3v27xMw%3D%3D

I don't know if any Trinnov models uses the 9038Pro, my guess is, none. I do know the Anthem AVM90 uses it.

In your price projection, how did you account for inflation since the time the 3700 was listed for around $1000 and licensing fees (example: Auro 3D for the 3800, that the 3700 didn't have)

 

[techsamurai]

I don't know if any Trinnov models uses the 9038Pro, my guess is, none. I do know the Anthem AVM90 uses it.

In your price projection, how did you account for inflation since the time the 3700 was listed for around $1000 and licensing fees (example: Auro 3D for the 3800, that the 3700 didn't have)

Sure, inflation is upon us and I'd say a 20% increase ism ore than fair.

Auro 3d is practically useless for 99.99% of owners and is silly in an AVR with just 9 channels. It pins you into a 5.x.4 configuration where heights are considered as important as the bed layer and you still can't get the voice of god channel. I guess you could give up the center channel and do a 4.x.5 but that's crazy. What's next 2.10.20?

Just like the 4 subwoofers and 3rd display. They may as well have added a food processor or coffee grinder in the unit to make it more kitchen friendly

 

[techsamurai]

I don't know if any Trinnov models uses the 9038Pro, my guess is, none. I do know the Anthem AVM90 uses it.

The Altitude 16 has the following info:

• DAC Resolution / Sampling Rate:24 bits/192 kHz
• A/D Signal-To-Noise Ratio:119 dB (A-Weighted)
• D/A Signal-To-Noise Ratio:118 dB (A-Weighted)

24 bit?

Isn't the 9038Pro 32 bit and 768khz?

I'm impressed that the AVM90 uses the 9038Pro. What does your model (AVM70) use?

 

[peng]

The Altitude 16 has the following info:

• DAC Resolution / Sampling Rate:24 bits/192 kHz
• A/D Signal-To-Noise Ratio:119 dB (A-Weighted)
• D/A Signal-To-Noise Ratio:118 dB (A-Weighted)

24 bit?

Isn't the 9038Pro 32 bit and 768khz?

I'm impressed that the AVM90 uses the 9038Pro. What does your model (AVM70) use

I am sure the Alttitude 16 does not have the 9038Pro.

The AVM70 has the 9038Q2M.
The AVRs have the 9010K2M.

 

[techsamurai]

I am sure the Alttitude 16 does not have the 9038Pro.

The AVM70 has the 9038Q2M.
The AVRs have the 9010K2M.

Makes very little sense that the AVM70 has the 9038Q2M. It's $13.25 for 2 channels so $53 for 8 channels vs $62 for the 9038Pro. It's probably more cost effective to use the 9038Pro than 4 9038Q2M DACs.

Wow, the 9010K2M is $3.45 a pop so:

MRX 1140: $24 for 13 channel DACs (7 chips)
MRX 740: $17 for 9 channel DACs (5 chips)
MRX 540: $14 for 7 channel DACs (4 chips)

They are really splurging on the DACs in these high-end AVRs

yeah, but 24 bit and 192khz?

Here's a list of 24bit DACs with >113db SNR
List of DACs

Is the Trinnov using the 4104? That's listed at 118db which matches Trinnov's site. If so, it has $42 worth of DACs with 20 channels.

Maybe Trinnov can make a 10 channel AVP for $1,500? They are already there, it appears. They just need to expand their manufacturing capacity.

 

[EJ3]

No way the manufacturers pay that much for those licenses. It's probably below 100$ for all licenses for such devices.

You should also not forget the development cost that needs to be amortized over the sales. An AVR (line) is vastly more complex than an x-channel amplifier. There is a lot of software that needs to work flawlessly.

AVPs are more expensive because they just have much lower sales figures. You may argue that because they have 80% of the same insides, this price difference should not be that high, especially because the amps are missing. But in reality, they probably just make a bit more margin on those things, why not

To put it into vehicle terms:
Just like high end 4x4 vehicles, Supercars & now Hyper cars: limited production to amortize costs across, specialty gear that is not on other vehicles, extra licensing for some things (there may be a lesser version of the same product in a lesser vehicle).
Scarcity drives price. also. They don't make much of this stuff. And need to make a decent livable profit (and be able to pay the employees) off of a small amount of production. These are not "loss leader" items. Yeah, i wish that they were less expensive, too. But mass production is based on just that: massive amounts of production typically brings the cost per item down.
But when you have limited demand & limited production, the costs go up per item. It's not rocket science.

 

[voodooless]

To put it into vehicle terms:
Just like high end 4x4 vehicles, Supercars & now Hyper cars: limited production to amortize costs across, specialty gear that is not on other vehicles, extra licensing for some thing (there may be a lesser version of the same product in a lesser vehicle).
Scarcity drives price. also. They don't make much of this stuff. And need to make a decent livable profit (and be able to pay the employees) off of a small amount of production. These are not "loss leader" items. Yeah, i wish that they were less expensive, too. But mass production is based on just that: massive amounts of production typically brings the cost per item down.
But when you have limited demand & limited production, the costs go up per item. It's not rocket science.

If an AVP would be a supercar, it would be a Porsche Taycan Turbo S, with battery and motors removed, for more money than the Turbo S with all the bits included. You do get a new dashboard though…

 

[Severian]

I feel like we're lucky there are still as many AVRs as there are on the market at all. It seems like an incredibly niche product these days. I barely know anyone who owns passive speakers at all, let alone combines them with a TV.

 

[techsamurai]

If an AVP would be a supercar, it would be a Porsche Taycan Turbo S, with battery and motors removed, for more money than the Turbo S with all the bits included. You do get a new dashboard though…

Good one and very true.

 

[techsamurai]

I feel like we're lucky there are still as many AVRs as there are on the market at all. It seems like an incredibly niche product these days. I barely know anyone who owns passive speakers at all, let alone combines them with a TV.

Why? Stereo is still around and it's usually with passive speakers.

There are still 61 AVRs listed on Crutchfield from 11 manufacturers.

In comparison, there are 121 integrated amps from 25 manufacturers.

Given the much higher cost and complexity of a home theater compared to a stereo system, these numbers suggest that Home Theater is not doing all that bad compared to stereo.

Have we seen any company leave the market? Have the lineups shrunk? If anything, we are seeing companies enter the market like Emotiva, Monolith, Tonewinner.

 

[dlaloum]

Sure, inflation is upon us and I'd say a 20% increase ism ore than fair.

Auro 3d is practically useless for 99.99% of owners and is silly in an AVR with just 9 channels. It pins you into a 5.x.4 configuration where heights are considered as important as the bed layer and you still can't get the voice of god channel. I guess you could give up the center channel and do a 4.x.5 but that's crazy. What's next 2.10.20?

Just like the 4 subwoofers and 3rd display. They may as well have added a food processor or coffee grinder in the unit to make it more kitchen friendly

in a 5.x.4 configuration - a phantom "voice of god" makes perfect sense - unless your room is very very large.

 

[Roland68]

I explained why - Denon and Marantz sold them for $1,000 not that long ago. I'm adding $500 for $125 in upgrades (the DACs and perhaps improved pre-outs) marked up by 4x to $500. A $1,500 AVP would cost $375 to manufacture.

The cost of the ES9026Pro (8 channel) for quantities over 100 is $24.84 and companies would get much better pricing than that. That would be insane for a $1,500 AVP - don't ask what DAC you normally get at that price range. Your $3 pencil is probably more expensive and the DAC is like the brain of the unit.

It's quite ironic that the 9038Pro for 8 channels costs $62. Does anyone know the price of an AVR that uses it, assuming one exists? I'm guessing Trinnov might.

https://www.mouser.com/c/semiconductors/audio-ics/audio-d-a-converter-ics/?m=ESS%20Technology&series=ES9038

https://www.mouser.com/ProductDetail/ESS-Technology/ES9026PRO?qs=yqaQSyyJnNhU2nm3v27xMw%3D%3D

Your assumptions and claims are so far removed from reality that I don't even know if it makes sense to point this out to you.
Therefore only a few points out of many:

1. Price increases
- In the last 3 years, the prices for electronic components have exploded, sometimes by 4-8 times the price. As an example, 3 years ago, a capacitor cost us 0.25 cents per piece when purchasing 100 pieces. Today more than 0.60 cents per piece for a purchase of 1000 pieces, the hundred price is induscutable.
- There are also delivery problems with many components, which means that production is delayed by months.
- For various reasons (including AKM), components are no longer available, or with delivery times of more than 2 years. The market was more affected by this in the last 3 years than in the 10 years before that combined.
These costs are of course added to the devices.

2. Manufacturers' revenues
May I ask what do you think manufacturers will get out of a $1500 sale?

3. Manufacturers' costs
Please make a list of the types of costs a manufacturer has, because these must be completely covered by sales. The components are just a small item.
With other manufacturers (SMSL, topping, etc.), here in the forum, the lack of support is criticized. But the high costs of service, support and parts inventory for AVR manufacturers are not taken into account.

4. Costs at AVPs
AVPs are and will remain a niche product.
The reason no manufacturer guts an AVR and sells it as an AVP is simple, the AVP would be significantly more expensive. The quantity would not be 10% of the AVR. Additional costs (own boxes, instructions, backing board, production, distribution, advertising, etc.) would have to be added to the small quantity.

5. DACs in AVR/AVP
There are good reasons to use individual 2-channel DAC chips in development. Have you checked how many outputs a DSP has in an AVR? How many inputs does an ES9038Pro have?
An ES9038Pro places much higher demands on its wiring and implementation. But if there is no (or hardly any) audible difference between an ES9010/18/38 and an ES9038Pro in "normal" DACs, what should the extra effort bring?

 

[delta76]

I feel like we're lucky there are still as many AVRs as there are on the market at all. It seems like an incredibly niche product these days. I barely know anyone who owns passive speakers at all, let alone combines them with a TV.

it's niche, but not sure about "incredibly niche". it is still a 2.x billion $ market.

 

[techsamurai]

Read this and let me know if you still believe that my assumptions and claims are removed from reality. They are firmly cemented in reality.

Your assumptions and claims are so far removed from reality that I don't even know if it makes sense to point this out to you.
Therefore only a few points out of many:

1. Price increases
- In the last 3 years, the prices for electronic components have exploded, sometimes by 4-8 times the price. As an example, 3 years ago, a capacitor cost us 0.25 cents per piece when purchasing 100 pieces. Today more than 0.60 cents per piece for a purchase of 1000 pieces, the hundred price is induscutable.
- There are also delivery problems with many components, which means that production is delayed by months.
- For various reasons (including AKM), components are no longer available, or with delivery times of more than 2 years. The market was more affected by this in the last 3 years than in the 10 years before that combined.
These costs are of course added to the devices.

The price of other electronics like TVs, computers, speakers don't seem to support your theory. How can the Onkyo, Pioneer, and Integra offer their top product for $1,400 and now $1,600.

2. Manufacturers' revenues
May I ask what do you think manufacturers will get out of a $1500 sale?

How much does Denon get out of their sub-1000 AVRs? They are probably their best sellers. The 3800H must outsell the 4800H and AH1 to a huge percentage and it costs $1,700.

3. Manufacturers' costs
Please make a list of the types of costs a manufacturer has, because these must be completely covered by sales. The components are just a small item.
With other manufacturers (SMSL, topping, etc.), here in the forum, the lack of support is criticized. But the high costs of service, support and parts inventory for AVR manufacturers are not taken into account.

I can't account for all their costs - I don't run their business. Are you suggesting that they were not running their businesses properly until recently?

Clearly, Denon and Marantz have been the target of acquisition. If they were not running their business well, I'm not sure they would have been acquired and we'd have seen changes in their lineups over the past 15 years. You conveniently left out the economies of scale of sharing things across 2 brands vs 1. The 4800h is practically identical to the Cinema 40 as someone posted on another thread.

4. Costs at AVPs
AVPs are and will remain a niche product.
The reason no manufacturer guts an AVR and sells it as an AVP is simple, the AVP would be significantly more expensive. The quantity would not be 10% of the AVR. Additional costs (own boxes, instructions, backing board, production, distribution, advertising, etc.) would have to be added to the small quantity.

The number of AVPs available for sale at Crutchfield showed that they are not as niche as we assume. In fact, at the over $3,000 range, they may outnumber AVRs.

I would argue that it's their price that makes them niche, not their function. I think we have all accepted the fact that we may need to separate our components especially since amplification is actually cheaper from Emotiva than Outlaw than from the onboard amplification.

Also, a lot of folks are using AVRs as AVPs and even the small factor Cinema 70 has pre-outs. If it's not supposed to be used as an AVR/AVP, then what's the point of the pre-outs in such a model? Clearly, AVPs or AVRs functioning as AVPs are the future.

5. DACs in AVR/AVP
There are good reasons to use individual 2-channel DAC chips in development. Have you checked how many outputs a DSP has in an AVR? How many inputs does an ES9038Pro have?
An ES9038Pro places much higher demands on its wiring and implementation. But if there is no (or hardly any) audible difference between an ES9010/18/38 and an ES9038Pro in "normal" DACs, what should the extra effort bring?

I dunno about DACs but the MRX740 is a $3,100 AVR and my calculations for the 9010 DACs with pricing for 100 units (not wholesale) showed that the DACs cost $17. I rest my case. Thank god my CPU and GPU don't cost $17 in my computers.

 

[peng]

4. Costs at AVPs
AVPs are and will remain a niche product.
The reason no manufacturer guts an AVR and sells it as an AVP is simple, the AVP would be significantly more expensive. The quantity would not be 10% of the AVR. Additional costs (own boxes, instructions, backing board, production, distribution, advertising, etc.) would have to be added to the small quantity.

it's niche, but not sure about "incredibly niche". it is still a 2.x billion $ market.

I also think sales volume has a lot to do with pricing, the more you sell, the more you can sell at lower prices!

I just did a not a very non scientific comparison on projected/educated gessed sales volume of AVP vs AVRs (D+M models only) based on customer reviews, while it won't be accuate at all, it might still give us a rough idea.

Amazon.com, Crutchfield.com and Besbuy.com customer reviews on the following:

Amazon Crutchfield Bestbuy
Marantz AV7706: 33 12 26
Marantz AV7705: 12
Marantz AV8805A: 1 12
Marantz AV8805: 15 9
Marantz AV8802A 14
Marantz SR7015: 60 18
Marantz SR8015: 59 24
Marantz SR6015: 73 55
Marantz SR5015: 258 158
Denon AVR-X3700H 584 50
Denon AVR-X4700H 408 102 221
Denon AVR-X6700H 239 26
Denon AVR-X8500H 53 17
Denon AVR-X8500HA 12
Denon AVR-A110 12
Denon AVR-X3800H 16 42
Marantz C50 16 18
Marantz C60 258
Marantz AVR-X2800H 445

Not totally scientific, won't be accurate, but one can still draw some projected sales volume comparisons that seem to show:

- AVRs out sell AVPs by a wide margin
- Denon sells a more more AVRs than Marantz did
- Customers seem to care more about prices than gold plated connectors and HDAMs They probably did what I did, checked prices in countries outside North America and realize that Denon's are better values here mainly because Marantz US and Canada's list prices are ridiculously high relative the Asia and Europe's, I wonder if that has anything to do with the tariff/import duties differentials, as shipping costs shouldn't differ by that much, they all have to be shipped from Vietnam and Japan. South East Asian countries such as Hong Kong and Singapore do enjoy lower shippping costs and import duties though. Still the price differentials between D and M in European countries are much lower than that in the US and Canada, like 1/3 to even 1/4 in some cases.

I thought I would check out Yamaha too and found:

CX-A5100 15
RX-A6A 27
RX-V6A 91

So it's the same scenario, Yamaha sells tons of AVRs especially the lower models but I doubt they sell that many AVPs at all. In fact it is hard to find places (online ones) that even bother selling Yamaha AVPs.

Same for Anthem, AVRs out sell the AVPs by a wide margin if you add up the MRX540, 740, 1140 review to compare with the AVM70 and 90 reviews.

 

[peng]

The number of AVPs available for sale at Crutchfield showed that they are not as niche as we assume. In fact, at the over $3,000 range, they may outnumber AVRs.

We don't know that, but we do know there are a lot more customer reviews on AVRs than AVPs, I mean really a lot more! That does not prove you assumption is wrong, because it is possible that AVP owners are less bothered to submit reviews. Same with the available for sale number at Crutchfield, because high inventory could simply mean sales are slow. Further, if you are comparing D+M's, there is only 2 current models, the AV7706 and AV10, so to compare with AVRs you have to add up the SR7015, 8015, C60, 50, 40, AVR-X2800, 3800, 4800, 6700, 8500.

Bottom line, we don't know the real sales volume comparisons unless someone can share the insider information but one can take an educated guess.

 

[EJ3]

If an AVP would be a supercar, it would be a Porsche Taycan Turbo S, with battery and motors removed, for more money than the Turbo S with all the bits included. You do get a new dashboard though…

But that is what I want, a GREAT AVP (for not too much money [sigh])