Surround Processors - what a mess!
Thursday, November 13, 2008 at 09:35AM Most of the high-end is on the sidelines, a few are treading water and meanwhile the leadership of the market is being held by Denon of all brands!
Are we undergoing a paradigm shift from hardware to software? Or a blip in the market caused by cautious approach to HDMI audio formats?
Here is where we stand in mid November:
- All major Japanese mfrs have $1K (and up) processors that deal with 1080P video and High bit-rate (HBR) 8 channel audio over hdmi.
- Some products from B&W group (Rotel, Classe) support it.
- No Harman Group components (Harman Kardon, JBL, Lexicon) support HBR audio in 8 channel.
- The leading performance pre-pro is the Denon AVP-A1HDC1
- Merdian, Theta and others have announced but not shipped supporting products for HDMI HBR audio.
In understanding the potential shift, one has to recognize whether this is a high-tech market or a luxury branded goods market? I would postulate it's a high-tech software market and the luxury goods vendors are left flat-footed.
The software demands are intense - frequent updates and infrastructure for support are necessary. The logic boards are intensly complicated. The age of a "hand crafted" audio processors may go the same way as a "hand crafted" microprocessor (anyone else worked on a PDP-8 with core memory?)
Silicon Graphics used to own the graphics computing space. Pixar switched to Intel in 2003, others switched to Sun. Now it's 100% Intel.
On the other hand, the leaders in performance sports cars haven't changed. Even as race car technology took a giant left-turn from the road technology, the leaders in consumer sports cars have been remarkeably stable (i.e. we don't have Sauber or Williams car dealers).
As a business person, I had a hard time imaging supporting the development of a world-killer $20K processor on the sales volumes these companies must have. It just seems like too small a market with too intense R&D requirements. Like speaker drivers, there must be an OEM market to supply them. There may already be such a set of providers - I know Bryston supplies their boards to others.
My analysis? The dealers of most of the high-end aren't prepared to deal with the software support and integration costs. The high-end integrators (as opposed to stereo dealers) would like a stable control protocol across their product lines. For some, the answer is Integra (Onkyo) - a full product line with low and mid-level solutions. We've always split - Lexicon for nicer systems, Denon or Yamaha for mid and low-end.