Harman International has finally completed the acquisition of Sound United, bringing brands such as Bowers & Wilkins, Denon & Marantz, Polk Audio and others under the Harman name.
It’s an impressive roster of audio brands – likely the strongest line-up in the hi-fi industry. But it also feels a bit… strange.
Not necessarily bad strange but like a lot of industries at the moment, the word “consolidation” is popular, and from one perspective, it could be seen as a good thing, viewed from another and it might shine a light on the struggles of the hi-fi industry in today’s rapidly changing world.
The woes of hi-fi
While the hi-fi industry is one that racks in annual sales that likely run into the billions, it has struggled to court a new audience that cares, and most importantly, values audio like previous generations.
The smartphone has also had a massive effect. People interact with their smartphones more than any other device, and as such, the industry has positioned its products towards smartphones, devices that act as a gateway to using music streamers, music streaming services, headphones or active speakers whether it’s through Bluetooth and Wi-Fi.
Traditional hi-fi is seen as too complicated for some, and a smartphone makes it more accessible. You’d hope.
What’s also affected the industry are companies that have bought hi-fi brands and don’t seem to understand them or have tried to bend them to their will. This is where we get to the issues with Bowers & Wilkins and Sound United.
B&W was bought by EVA Automation in 2016, which went down the route of networked devices in the Formation series. Bowers hasn’t launched any new products in that range for several years. It wasn’t a match made in heaven, the software and hardware didn’t get on too well.
Masimo – a company whose expertise was in medical technology – bought Sound United and gulped up a whole load of hi-fi brands. An odd situation became messier the longer it went on, with Masimo seemingly pushing in one direction while the Sound United brands were looking elsewhere.
When Masimo bought Sound United, it did so for $1bn. Three years later, it sold for $350 million. Mismanagement? Lack of cohesion? Poor leadership? Whatever the case, it did not work.
The Harman buyout makes sense
Harman is a company with massive audio heritage – JBL is one of the biggest audio brands on this planet, and you also have Harman Kardon, AKG, Mark Levinson, Arcam and others. It is hopefully going to turn that money tap on and invest in these brands too.
For Harman, the expectation is these brands won’t compete as if they were rivals. In an interview with What Hi-Fi, Dave Rogers, President of the Lifestyle Division at Harman, said as much in that they won’t be tinkering with what these brands offer but would take learnings and leverage them as a whole.
Consolidation can have adverse effects – you’d only need to look at Hollywood to see an industry get smaller and smaller and make less money because of it. There’s always a worry that a company swallowing another could see a reduction in innovation, of brands doing the same thing but slightly differently.
Sound United now has owners who understand the market. Though my knowledge of Harman’s previous acquisitions is limited, I’d assume there have been some buyouts that haven’t worked out. But here’s hoping Harman International doesn’t tinker with the character of the brands. Otherwise, what was the point of buying them in the first place?
How much is too much?
This issue is one I’ve alluded to above, but all these brands working alongside each other is a tricky situation. They can’t all be a success.
Denon & Marantz will cross over with Arcam in the AVR market in some ways. Bowers & Wilkins will mingle with JBL and AKG in the headphones market; as well as JBL and Revel in the premium loudspeaker market, and the likes of Infinity and Mark Levinson in the car audio market. Roon vs HEOS. That all feels a bit tight.
Would Bowers & Wilkins ever launch a portable wireless speaker a la JBL? If that was ever on the cards that seems less likely now. Would the same technology be used across multiple brands, reducing costs and streamlining production processes? Maybe. It hasn’t happened so far – JBL soundbars are different from Samsung, despite going after the same market.
Harman International can exploit the success these companies have had in their respective markets – Defnitive Technology in the US, Bowers in Asia, JBL in, well, everywhere. But staying in the same lane can get a bit boring after a while.
If there’s a worry that I have, it’s not that these companies won’t be allowed to do what they already do anymore. It’s that they won’t be able to do the unexpected, something that surprises, something that could draw in a bigger audience.
Because that’s what the hi-fi industry requires.
