Why an iPod Touch costs more than the sum of its parts?

We've all read those blogs that "reveal" the parts cost of a fill-in-the-blank, Kindle, iPod, or Palm Pre. If you ask me, this simplistic, by-the-numbers gambit overlooks most of the costs of bringing a product to market.

First and foremost, products, all products, are priced to what the market will pay. I don't care if it's a 16-ounce bottle of Poland Spring water, Coldplay concert tickets, or a Ferrari 599 GTB Fiorano, retail prices are determined by what the market will pay. And luxury products have higher profit margins than mass market stuff. Oh really?

But the mindless rash of blogs that purport to add up the parts costs, for example $39.51 for the display, $15.96 for 8 gigabytes of flash memory, $15.41 for components, and $12.39 for the 3-megapixel camera, to calculate the cost of anything are hugely misleading. The writer merely subtracts the parts cost from the retail price and concludes the difference is the "profit."

Does the writer assume the company's factory doesn't pay rent or for electricity or heating and air conditioning? And that the factory labor force works for free?

These articles completely ignore other costs, such as research and development and engineering expenses associated with creating say, a Kindle. Manufacturers also pay significant licensing fees for technology used in their products.

Shipping costs of large products such as flat-screen TVs must be factored in before determining the final cost to the consumer.

Oh, and what about the online or brick and mortar retailer? They have their own set of expenses for rent and employees. Some of whom might need health insurance. … Read more

Are SACD and DVD-Audio dead yet?

It's interesting. Tens of millions of homes are equipped with multichannel home theater systems, but multichannel music is a dead issue. Stereo rules the roost, for going on 50 years.

Ten years ago it looked like stereo's days were numbered--the two new multichannel formats, SACD and DVD-Audio, were on track to be the next big things. Funny, it didn't work out that way. I cover the subject in detail in my "Whatever happened to 5.1-channel music?" article that appeared in the July issue of Stereophile magazine.

Obviously, 5.1-channel sound makes sense for movies and home theater, mostly because 5.1 was an outgrowth of theatrical film-sound technologies stretching all the way back to the 1950s.

Every attempt to bring surround music into the home without video has flopped, big time. Are you old enough to remember the rise and fall of quadraphonic in the 1970s? What was needed was a surround format that didn't require music lovers to invest in new playback gear. Surely such a format would prove the viability of music surround...wouldn't it?… Read more

Sound vs. picture: What's a better investment?

A good friend of mine is still fuming over picking HD-DVD over Blu-ray. He's held the grudge so long he just recently dumped the player and even some of the discs and bought a Blu-ray player.

I know another guy who's steamed that his $2,000 6-year-old receiver doesn't have HDMI switching, so to get Dolby TrueHD and DTS Master Audio he plays his Blu-ray over the receiver's 5.1 channel analog inputs. Fine, but the receiver doesn't do any sort of bass management over its analog inputs. The sound isn't so hot.

Do you know anybody who bought a plasma TV in 1999 for around $10,000 who still uses it as their primary display? I don't, but I'd bet most of those buyers are on their second or third display by now.… Read more

What's so great about high-end audio?

It's the hi-fi's job to produce the sound of music encoded in a recording.

Does how well or how accurately it produces the sound affect musical enjoyment? I'm not so sure about measurements; they just define distortion levels, power rating, and frequency response, but they don't have all that much to do with good sound. Good sound is much harder to nail down; we like what we like. You know good sound when you hear it.

Studio recordings rarely sound "live," or even realistic. How could they? Chances are the band never played the entire tune together "live" in the studio. Their music was patched together from bits and pieces, overdubbed, pitch corrected, rhythm corrected, EQ-ed, dynamically compressed, and processed in a gazillion ways. Of course, a lot of that also goes into modern "concert" recordings. So what constitutes a good sounding recording is pretty impossible to define. Play it back over a great system and what do you hear? Does it get your blood pumping?

So the question really is, does the music fully engage the listener? Sometimes, the better the hi-fi, the more music the listener hears, the more they like the music. Why that is? I don't know. … Read more

How big are Howard Stern's ratings?

Stern loves to count the 20 million Sirius XM subscribers as listeners, and his rabid fan base believes him!

Come on, that's a huge stretch, even for the former "King of all Media." Intentionally equating potential audience with actual listeners is classic Stern BS. The former King never made another movie or wrote another book. He's the King of Satellite Radio, and he works for a company that NEVER posted a profit during his reign (it continues to post losses every quarter). Sirius XM stock has been lingering around thirty-three cents a share for the past month or so.

I'm just waiting for Stern to advise his buddy, Sirius XM CEO Mel Karmazin, to boost profitability by eliminating all of the other channels. Stern is the big draw, so why waste resources with all those other channels? I wonder how fast the 20 million number would plummet.

Before the Sirius XM merger "Daily News" writer David Hinckley reported that "Arbitron has released its first-ever ratings for XM and Sirius, covering April-June 2007, and they show that in an average week, 1,225,000 listeners at some point heard Stern." That's the TOTAL for the week, so at any given moment, Stern has maybe a few hundred thousand listeners. Anyway you look at it, that's a sorry ratings number for the former terrestrial radio god.

Arbitron also said that one other satellite channel--XM's "Top 20 on 20" - topped a million during that April-June 2007 ratings period. Since Sirius XM doesn't release its internal ratings, we don't have any way to verify Stern's claims, or other satellite radio shows' numbers.

On today's show Stern admitted that, yes, he has fewer listeners than he did when he was on terrestrial radio, but wouldn't go so far as to say lots of terrestrial radio personalities have far more listeners than he does now.… Read more

Face it: The best stuff is expensive

Here at CNET we write about all sorts of gadgets and toys, but I've noticed that when I write about high-end gear I get the biggest reaction.

I like hearing about stuff I can't afford, like the recent road test of the $80,000 Jaguar XFR. The big sedan can hit 162 mph, can stop from 150 in 6 seconds, and it's a ball to drive fast. Funny, the road tester never mentioned fuel economy. There you go, people don't buy $80,000 cars for their practicality, they buy them to be seen in and for how well they perform.

High-end audio isn't so different, but it's more private. High-end buyers' families and friends are the only ones who'll ever get to be bowled over by the sound and looks of their spectacular audio systems. So while you've probably heard of Jaguar, chances are you're less familiar with high-end audio brands. I'm here to help raise awareness of quality audio.

I write about the world's best audio gear for "Home Entertainment" magazine, and I recently had the pleasure of testing the Burmester 032 integrated stereo amplifier ($22,495) and B25 speakers ($11,995/pair). Burmester is based in Berlin, Germany. The company builds the sort of hi-fis a Jaguar owner would buy.

The 032 amplifier's sculptured metalwork is drop-dead gorgeous. The amplifier's front and sides are covered by machined heat sinks. They provide optimal cooling for the stereo 240-watt-per-channel amplifier's output transistors, eliminating the need for noisy fans. Burmester components, fully decked out in chrome, are a startling sight to behold. … Read more

Poll: Are concert ticket prices too high?

Let's face it: Musicians' income from CDs and downloads is on the wane, so they have to make a buck where they can.

Ticket prices for local venues in New York City can be pretty steep. Small jazz clubs can easily run $30, plus a two-drink minimum.

Steve Knopper's "High Ticket Prices Could Hurt Concert Business" article in Rolling Stone at least pointed to relative "bargains" among the big summer tours. Tom Petty and Bruce Springsteen's shows have ticket prices under $100; Dave Matthews Band's seats go for $32 to $75; Pearl … Read more

Sirius XM sticks it to subscribers

How's the Sirius XM satellite radio monopoly working out for subscribers? Not so well. Now that Sirius XM is the only game in town, it's nudging up fees for subscribers. Nice!


Could the subscriber losses be attributed to recent price hikes? The … Read more

Can hi-fis ever sound like real music?

Audiophiles are on a quest; we're always lusting after the perfect fill-in-the-blank (speaker, amplifier, turntable, CD player, etc).

Catch is, perfect gear wouldn't automatically make every recording sound life-like. At that point the gear wouldn't have a sound per-se; the recordings' sound would be laid bare.

I wrote "How high do you want your fi?" for the April 2009 issue of Stereophile magazine, and I'm still getting a wide range of feedback about that piece from readers and friends.

I'm defining a "perfect" hi-fi as one that's indistinguishable from the sound of live instruments. No hi-fi has ever fully recreated the sound of a symphony orchestra, jazz group, or rock 'n' roll band. Solo instruments fare better, i.e. guitars, flutes, and vocals; you can almost get a glimpse of their sounds over the best high-end systems. But a drum kit? Piano? No way!

Audio components are far from perfect, so it's no surprise their sounds aren't 100 percent convincing. As imperfect as the gear is, the recordings themselves are even further away from documenting the sound of vocals and instruments.

The age-old analog/digital divide is the least of it. The musicians do their thing, and then the microphones, their positions relative to the instruments, the skill and imagination of the engineer/producer/mastering team's use of equalization, compression, processing, etc., create the sound we hear.

Pop or rock music is rarely played by the complete band, with vocals, live in the studio. Out-of-tune singers and players are pitch-corrected, drummers' off-kilter rhythms are tweaked, there's not a lot of there there to reproduce. Most recordings are so heavily processed they could never sound real.… Read more

Do major record labels have a future?

Record stores are fading fast, the big labels--EMI, Sony/BMG, Universal, and Warner--are on their last legs, and commercial radio stations rarely play new music. The big music retail chains: Tower, Virgin, and HMV are all gone.

People still listen to music, it's how they hear it and find it that's changed. Oh, and they don't want to pay for it.

The Beatles didn't get a big, fat advance when they signed a record contract. They hooked up with EMI to make records; the band couldn't do it by themselves. Luckily for the Beatles, they had a terrific producer, George Martin, who encouraged John, Paul, George, and Ringo to keep growing. Without Martin the Beatles might have been just a minor footnote. He set the scene and created the right environment for the Beatles to bloom.

The artist/producer relationship is crucial, and back in the day, the great labels--Motown, Stax, Electra, Atlantic, Columbia, Blue Note, and Warner Brothers--had the best producers. The labels promoted the music and got it on the radio.

Nowadays, any 12-year-old could make a record in his or her bedroom, put it up on a site,and sell it. Up-and-coming local bands do the same--but without the input and direction from the right producer, the band won't tap its full potential. … Read more