The high end of the market is evolving: mainstream brands offering the same thing - only better - are having a tough time. A couple of months ago Sony pulled the plug on its Qualia brand, despite excellent reviews of its SXRD projector and RPTV sets. It seems Qualia was one luxury Sir Howard Stringer couldn't afford in his reorg. No reasons were given for the move, but I'd speculate that having a high R&D halo brand only helps when the main consumer electronics business it fuels makes money. Since Sony is losing money across the line, it makes more sense to build the high end technology into mainstream products themselves, hopefully enabling a bit higher margins and injecting some profitability down the line.
That isn't to say that the high end is dead - far from it. The key is to provide a unique and differentiated experience. Two examples:
- When I met with Kaleidescape earlier this year, they emphasized not just the features and functions added to their $25,000 -$50,000 video archiving and distribution systems, but also the growing number of customers they have. Kaleidescape is an example of a high end product that is not just a slightly better DVD player, but with the new bookmarking features, an entirely new way to watch movies. Movies start up in the right aspect ratio without any setup, resume exactly where they're left off, and can be set to jump just to specific scenes - similar to listening just to specific music tracks across a genre instead of listening to an album at a time.
- The D-Box lineup is another high end product creating a new market - something like an amusement park ride, physically moving your couch around in synchrony with the movie. This is a step well beyond bass shakers that vibrate your couch when something goes "boom." The D-Box X3ME (supposed to be pronounced "extreme") line recently added vertical motion to its entry level line. Entry level is a matter of perspective: the MSRP is $10,000. An add-on field installable system is $4,299 plus either $3,000 for the controller or your own PC plus an $800 kit. The idea is to extend this beyond "the sky is the limit" crowd, but it is still a very high end product by anyone's definition.
-avi