Uniti price hike

Thats the trend, face it or not

When the new range of amplifiers and streamers are going to be introduced, perhaps next season, the bestsellers will soon after that, hit a hike

As for outsourcing I guess more semi-finished parts are heading against lower wage areas in order to improve profit

Capital investors milking like in all other business areas

Whats interesting is if this will move or shake the value level of second hand Naim kit

These are huge and (to me) unjustifiable increases. I think dealers are going to have to soften the blow by taking a hit on their profit margins, particularly for an item which is so easy to install and setup. 

Clive B posted:

If the items are manufactured in Salisbury, then the labour costs are in sterling anyway, so exchange rate is irrelevant (unless employees have enjoyed an inflation busting pay increase, of course). What is affected by exchange rate is the cost of materials and components sourced overseas.

Furthermore, it is difficult to see why the price of the Uniti range should be increased and not the rest of the product line, not that I'm seeking to encourage that. It may be owing to cost recovery associated with the delays and technical issues. 

it also means naim will sell more of their units overseas due to their price falling

Back in the day, Naim would put its prices up on 1 April. Even in the days of 10% inflation and massive currency swings they’d only put their prices up in April. Everyone knew when they were due and dealers and customers could plan accordingly. 

To increase the prices on newly introduced products, and particularly by so much, in October and unannounced, seems wrong. I have been told that delays on Novas are now in months rather than weeks, so either Naim have been hit with some need to increase prices (perhaps the original price was underestimated) or they are trying to choke off demand. Naim totally underestimated the challenges of getting these products to market, and maybe they underestimated the price too. But it’s merely speculation. What I do know though, is that if I was a customer saving up for an Atom or a Nova and I rocked up at my dealer to buy it, having saved up, I’d be bloody pissed off to be told ‘sorry chum, you are going to have to stump up another £250/£400’. A 10% increase certainly can’t be justified by the CPI at 2.9% or by recent currency swings because the £ is actually stronger against the € and $ than it was when the prices for these products was first announced. Either Naim have ballsed up their pricing or they are profiteering, neither of which is good. 

To put it in plain English they are taking the p*** .  If I as a small business owner mess up my pricing through my own incompetence then I just have to swallow it or if I priced a job say in March and I go to the customer and say it's now 10% more sorry it's currency fluctuations and all that I would get told where to go or if not I suspect that would be the last job I did get from that customer.

Vote with your feet or rather your wallets people don't stand for it.

It's just not cricket, Naim.

The second-hand Naim stuff look very attractive to me now 

Crabby posted:

I believe they made a strategic mistake. This increase has no other reason than to cash on the uniti success. However, an atom at £2k is a far far cry from the qute2 Price at roughly £1200

 

I don't want to comment on the price increase, safe that it is still a little less than the Italian retail, but I have listened to the Atom a few times attentively (I am one of the few who have been really interested in the new range, it appears) and, to my ears, a Core and an Atom plus decently sensitive speakers would make a good definitive system. If we want to discuss a comparative example of rising costs discussing, say, the addition of a second 555PS DR to a CDP555, well let's talk about cost for value, I'm here, I've heard that too.

M

Bob the Builder posted:

To put it in plain English they are taking the p*** .  If I as a small business owner mess up my pricing through my own incompetence then I just have to swallow it or if I priced a job say in March and I go to the customer and say it's now 10% more sorry it's currency fluctuations and all that I would get told where to go or if not I suspect that would be the last job I did get from that customer.

Vote with your feet or rather your wallets people don't stand for it.

It's what economists call price elasticity - when the seller can increase the price and see little or no reduction in demand. At the extreme it becomes conspicuous consumption when a price increase increases demand. 

I was considering a Nova but not now. The increases have got out of hand. 

Given the Atom was introduced only 12 months ago at a price of £1,600, this means we have witnessed a price increase of exactly 25% in one year. Bloody outrageous, Trevor Wilson should be hanging his head in shame rather than trumpeting about "fair and square".

Looking at Linn price lists from 2016 to 2017, they seem to be able to handle the currency fluctuations. Some products seem to be the same price year to year?

From what I understand the original BOM and hence retail price was calculated, rather unfortunately, just before sterling fell off a cliff.  Since that time the price for all the parts used in the Uniti range have increased considerably.  The delay coming to market could only have made things even harder.  Naim put off increasing the price as much and for as long as possible, not wanting to penalise early purchasers and aiming to soften the impact by incrementing it.  It's worth remembering that Naim tries to ensure a similar proportion margin for all the electronics, that's how they have not only stayed in business, but been able to invest for the future.  Once you erode that, there's no going back, or making things up later. Yes, it's a tough pill to swallow for some and I can understand some of the anger and frustration but the way I see it Naim couldn't keep swallowing the difference forever - particularly with such strong demand for the products. It must have been a really tough call for Trevor to make but an inevitable one when you consider all the facts. 

On 1 January 2016, £1 was worth $1.5. Today £1 is only worth $1.33. That's an 11.3% drop. Add 2.9% CPI and that's 14.2%. Not 25%. But if people will pay £2,000 for an Atom, Naim can choose to charge that. The increase certainly can't all be blamed on currency or inflation. Either the cost accountant messed up or there is market repositioning. 

HH, I'm afraid just a simple currency conversion doesn't fully account for the cost increases that Naim has faced.

Well, whatever it is it’s none of my business. And I don’t want one anyway, so I’ll shut up. 

The same cost of materials applies to all the product range,  so that logic carried forward means we can expect a similar rise in the 2018 price list.  And the next question is will the 2018 price change also add another percentage to the Uniti products.   ?        

Richard Dane posted:

HH, I'm afraid just a simple currency conversion doesn't fully account for the cost increases that Naim has faced.

Thats true Richard but Sterling fell off the cliff post Brexit at the end of June , the Uniti range was unveiled early October more than 3 months later . I follow the markets quite closely as I have assets in the UK and US , the dollar rate post brexit was mid 1.30s and then fell sharply at the end of September to around 1.22 which is where it started 2017 and has since rallied to 1.33 . That is a 9% rise .... The Euro rate has been hovering around 1.15 most of the year , it dipped recently to 1.08 before recovering to 1.13 today . 

I'd say its more a matter of supply and demand rather than currency volatility . 

Pete, I'm afraid you're wrong on that last part - Naim don't price opportunistically, it's not good for long-term business. The percentage margin on the Salisbury built electronics is kept fairly consistent right across the range, (albeit with most pressure - i.e. marginally narrowest, at the lower levels of the range) - that way the lights are kept on, suppliers and people are paid, and a bit is put in the kitty for investment.   It's a tried and tested formula that works.  

Secondly, undoubtedly the BOM was worked out and pricing set before the full ramifications of the drop in sterling came home to roost.  

Mike, I would guess it all depends on how much content in the products is purchased in Pounds, Euros, US Dollars or Swiss Francs. The new Uniti range I would imagine is rather different to the Classic/Reference range in this respect.  It all depends on what's being supplied by whom and from where.  Combine that with a margin that doubtless already narrowest (see above) and a pricing that may possibly have been under pressure from the very start (trying to get so much in there for the money) and it's a perfect storm scenario. 

The margin issue is pertinent but I don't understand a similar margin up and down the range.  Surely you need a massive margin on something like The Statement amps where you are selling in the tens and a much smaller margin on products which sell in their thousands.  I assume, at least the Atoms, target is for high volumes and here the price rise seams out of proportion.  Less so with the Star and Nova where I expect the numbers sold to be significantly less. 

Anyway - none of my business really. I have thought about a Nova but adding an NDX (even a new one) to my SN2 is looking much more attractive, especially now,

Richard - firstly can you as the forum admin enlighten me as to how to put up a reply to a post citing the content of that post (i.e. in quotes)? Doesn't seem obvious to me, and I can't see anything in the FAQs. 

Second, you stated that "Naim put off increasing the price as much and for as long as possible, not wanting to penalise early purchasers and aiming to soften the impact by incrementing it." I can't remember exactly what the original launch price of the Nova was, but a quick Google suggests £3.8K. Thus, the Nova list price has been been increased since launch by nearly 19%. Frankly, I don't believe that Naim's costs have risen by 19% since launch, at least as a result of currency fluctuation - and it appears that many commentators here on the forum share that view. 

Given the fact that Naim messed up the launch of the entire Unit range, and that they were vapourware for 9 months post "launch", how exactly can early purchasers have the "blow softened" given that anyone buying units now are by definition early purchasers, as only now are dealers getting stock? Unless Naim have started to adopt a crowdfunding methodology whereby purchasers are expected to tie up capital for extended periods of time in the hope of securing an early sample?

It would seem to me that the launch of the new Uniti range is something of a textbook example of how NOT to do it - Naim have alienated potential customers at every possible turn.

Speaking personally, having bought a SU 18 months ago, I had been keen to upgrade to the Nova, and take the considerable hit in terms of depreciation on the old SU vis a vis the Nova. As noted previously, an additional £410 is too much of an ask, and a deal-breaker. 

Naim may of course be able to sell as many units as they can make at the newly inflated prices - and good luck to them. I'm keen to see Naim survive as a beacon of British manufacturing - but I'm not naive enough to swallow the line that this is all about currency fluctuations. 

Interesting to note that the Muso price hike a while back was 11%. Given that this unit is made wholly in China (and therefore even more subject to the impact of currency fluctuations, one assumes), this doesn't seem to support your assertion that Naim maintain similar margins on all their electronics. Equally notable was that Naim seemed to find it necessary subsequently to run £75 cashback discount offers on these units - presumably to stimulate the demand softened by the price hike? Can we expect similar offers on the Units range one wonders?

Finally, one does wonder if Naim are planning to prioritise export of the limited initial supply of the Uniti range, where higher profits can be earned from increased margins due to the fall in value of sterling? Would be interesting to know if Uniti prices are going up to foreign markets too, and to the same extent? 

Duncan,

Mu-So I'm sure is very different - I don't know the details here, hence why in my post above I talk about "Salisbury built" electronics.

Naim makes least money (margin) on Export sales, so I doubt that they would be prioritising export sales to make more money.

You can believe or not believe whatever you like - I'm just trying to get some facts across as I see them.  Just to clarify - I'm like you, outside looking in.  There is possibly a small degree of speculation of course, but because I used to work for Naim at the factory I do have certain insights as to how the company works.  And what I don't know I can usually ask about - and get a straight answer. 

Regarding quoting a post, just click on  "Take Action" and scroll down to "Reply With Quote".  You will then be presented with a dialog box with the previous poster's text in a grey bubble under which you can type your post.  Please be sparing though - quoting can get very tedious if not pared back properly.  Multiple quotes of quotes do not translate well on mobile devices.

The actual 12 month  percentage increases between the Uniti launch prices in October 2016 and October 2017 are:

Atom 25% (£1600- £1999)

Star 17% (£2999- £3499)

Nova 10% (£3800-£4199)

Core 15% (£1650-£1899)

The  £xx99 on the latest prices is a bit of a gimmick which makes you wonder how they have been costed and the massive 25% on the Atom is presumably because this is likely to be the best seller and it still ducks below £2000. Important because it will qualify for the What HIFi best below £2000 award (The goto publication for the casual punter).

It's easy to be cynical and as others have said if people choose to buy at these prices good luck to them. Naim's market research has presumably assessed the likely impact on sales.

If they had left prices as they were and factored in the increase in April next year that would be more understandable and acceptable, particularly because Naim must have ordered and paid suppliers months ago to produce the current production run.

Richard Dane posted:

Duncan,

Mu-So I'm sure is very different - I don't know the details here, hence why in my post above I talk about "Salisbury built" electronics.

Naim makes least money (margin) on Export sales, so I doubt that they would be prioritising export sales to make more money.

You can believe or not believe whatever you like - I'm just trying to get some facts across as I see them.  Just to clarify - I'm like you, outside looking in.  There is possibly a small degree of speculation of course, but because I used to work for Naim at the factory I do have certain insights as to how the company works.  And what I don't know I can usually ask about - and get a straight answer. 

Regarding quoting a post, just click on  "Take Action" and scroll down to "Reply With Quote".  You will then be presented with a dialog box with the previous poster's text in a grey bubble under which you can type your post.  Please be sparing though - quoting can get very tedious if not pared back properly.  Multiple quotes of quotes do not translate well on mobile devices.

Thanks Richard for your reply and advice re the "Take Action" option - I'd assumed this option was specifically and exclusively for reporting an offensive post. Interesting also to hear export sales are not as profitable for Naim. Glad to hear you've got a hotline to straight answers - always a Good Thing.  

Jonn posted:

The actual 12 month  percentage increases between the Uniti launch prices in October 2016 and October 2017 are:

Atom 25% (£1600- £1999)

Star 17% (£2999- £3499)

Nova 10% (£3800-£4199)

Core 15% (£1650-£1899)

The  £xx99 on the latest prices is a bit of a gimmick which makes you wonder how they have been costed and the massive 25% on the Atom is presumably because this is likely to be the best seller and it still ducks below £2000. Important because it will qualify for the What HIFi best below £2000 award (The goto publication for the casual punter).

It's easy to be cynical and as others have said if people choose to buy at these prices good luck to them. Naim's market research has presumably assessed the likely impact on sales.

If they had left prices as they were and factored in the increase in April next year that would be more understandable and acceptable, particularly because Naim must have ordered and paid suppliers months ago to produce the current production run.

I believe the Nova is now £4,499.