Mainstream loudspeaker company, Bose, announced today that they are purchasing Upstate New York based, McIntosh. McIntosh is one of the most iconic brands in the history of audio and bring a respected electronics brand to pair with Bose. Italian loudspeaker manufacturer, Sonus faber, also is included in the deal which brings a high end loudspeaker offering that Bose has never had to offer to the marketplace.
The specific terms of the deal were not announced.
Read about McIntosh’s House of Sound Experience Center in New York City.
The brands of the McIntosh Group Inc. help Bose stay in good graces with Best Buy as their in-store Magnolia centers. Of the establishment audiophile electronics brands, McIntosh is the last big player standing as brands like Krell and Classe’ are in effect dead. Harman’s, once mighty Mark Levinson brand is more focused on audiophile headphones and in-car, Lexus audio. While other brands have morphed and/or failed, McIntosh has picked up significant momentum in the custom installer (CEDIA) channel which add to their appeal.
Curious Question Number One: Why Not Sound United?
The McIntosh Group was in far better shape in terms of distribution and organization than the many brands than Sound United (Masimo). To say that medical services company, Masimo, has failed in owning a billion dollar’s worth of brands ranging from Bowers & Wilkins to Denon to Marantz to Definitive Technology to Polk Audio to Classe’ Audio to Boston Acoustics. The Sound United brands also come with HEOS connectivity which was why the former and now exiled CEO of Masimo wanted for overall connectivity with not just AV but their medical services products. This billion dollar investment didn’t just lead to a boom in pandemic sales as everyone focused on in-home activities but owning HEOS has resulted in a legal win over Apple that is the biggest of its kinds – likely in the tens of billions of dollars when all of the dust settles from all of the predictable appeals.
With publicly traded Masimo badly needing to rid themselves of their Sound United brands (they said as much in their recent filings so says industry watchman, Ted Green at Strategee.com) the multiple on the Sound United brands had to be very appealing with overall revenues that are far larger than the McIntosh Group Inc. Perhaps the overall buy-in for Sound United is too high but with pending Trump-era tariffs (consumer sales tax) could drive down future sales for products made in places like China which is where most Sound United brands are now made (Vietnam too)?
Curious Question Number Two: Why Buy Into the Audiophile Market After Decades of Fighting It?
If you’ve been in the hobby for long enough, you have heard the term “No highs, no lows it must be Bose”. Which is a statement to how much Bose has ignored and/or disliked the audiophile space. Now they bought their way into the business, big time. With Baby Boomer clients feeling all warm and fuzzy over the green glowing lights of a McIntosh component, will audiophiles want to buy McIntosh or Sonus faber? That is to be seen.
Bose as a company is famously litigious and that hasn’t helped their reputation with enthusiasts, custom installers and others. There will be many in that group who don’t like this deal.
Where Bose gets little credit is how they have built perhaps the single best, multi-channel sales platform not just in consumer electronics – but in any category of consumer products. Bose sells their products in every imaginable channel outside of enthusiasts audio. These channels include: big box retailers, catalog retailers, the biggest online retailers, automotive, pro-audio/sound reinforcement and so much more. Now they are players in the audiophile space – a space that they’ve purposefully ignored for decades upon decades.
What Will Bose Do With These New Shiny Audiophile Toys?
Time will tell but the best move that they could make is to fight their sue-first tendencies and somehow get over their ignore-the-enthusiasts media strategy that they’ve had for more than a generation with their namesake speakers. Simply put, audiophiles think that Bose products don’t perform well (their Bose headphones are far better than one might expect and they co-pioneered modern headphone noise cancelation) but feel that McIntosh and Sonus faber do in fact compete in the performance audio marketplace.
If the plan is to try to make McIntosh into a totally mainstream, lifestyle brand, that is a very big challenge that likely see the enthusiasts buyers look to other, more new school audiophile brands including many that come from Switzerland. Sonus faber, could be spun off if Bose doesn’t want to be in the high end loudspeaker brand.
Most companies tend to want to play with the new toy that they just bought in an M&A deal and that could be the case here and Bose has the chops to find a way to make this channel work as they do with airplane magazines, door-to-door sales or outlet stores. They absolutely can make that work if they put their time and significant resources into it. Can that be done without the support of their core clientele? That’s more questionable, but not impossible.
Will Bose show the insight and restraint to let the brands that they bought do what they do best as Berkshire Hathaway would? Nearly all companies when buying up other companies can’t resist putting their mark on their newly acquired brands. Bose needs to be very careful with that as the core McIntosh and Sonus faber client isn’t likely a fan of the mothership brand. Bose will need to earn that trust with the audiophile market who they’ve ignored for so long. That’s going to be another big check for them to write next.
2025 will see a lot of change in the home audio business. I think that we will see a number of brands and dealers exit the business. As consumer belts tighten and other expenditure priorities take precedent, it will be felt by the manufacturers and distribution. If tariffs take root, this will also impact pricing which in turn will push sales down.
Our incoming rapist-felon president needs to honor his word because he is the CEO of Truth Social and when we think of Trump we think of a man who is dedicated to the truth, right?
How is consumer electronics going to do with 20% PLUS sales tax (sorry non-college educated Trump voters but you don’t understand that a tariff is a sales tax and that THE CONSUMER PAYS FOR IT)?
I fear you are right my friend.
People like you will never know why you lost. A lawsuit might help.
You would consider filing a lawsuit against someone who articulates verifiable fact!?
Interesting.
If you’re curious about what was lost in the recent election, it won’t be long before these details are available for all to see, especially for those who voted against their own best interests–albeit think they won.
In an attempt to explain/cast blame on the election results, the Atlantic published an article about the American caste system as it relates to higher education, specifically the emphasis on ivy league schools and the chasm created between those with/without a college degree vis-a-vis our political divisions.
My hunch is, this chasm begins not in higher education, but in elementary school, where at age 7 critical thinking skills could be fostered–but more commonly are not.
In 1936 Jean Piaget observed during what he termed, the concrete operational stage (ages 7 to 11), a child’s capacity for inductive reasoning.
While their cognitive development had not yet matured into syllogistic logic, which would happen closer to 11 years of age, the question is begged: how many high school graduates learned critical thinking skills, syllogistic reasoning, and the scientific method.
Had the bulk of the voters who elected Trump (esp. high school educated white males) been taught these basic skills, the results would have been different.
Although our education system failed to provide important lessons in thinking and learning how to learn, one does not throw out the baby with the bathwater.
Trump’s “boasting” about doing away with the department of education, however, does exactly that.
Rather than expanding on its capability to serve our young, and the different modes for learning throughout this population, Trump considers it a matter for each state to consider, yet does not address how the schooling will be funded.
We’re in for some challenging times ahead. . .
Not me. But Trump could as he has with CNN. Trump has not been convicted of sexual assault or rape. He was not charged in criminal court but civil court where no real evidence was needed only hate for him. His accuser couldn’t even remember where or when it happened. Trump was basically made to pay for slander because he said the accuser was not his type.
Goodbye McIntosh! Bose will certainly cheapen the brand.
This is why Bose should have bought some or all of the Sound United brands. Diversity while staying more “in their lane”:
With that said, Bose is VERY GOOD at multi-channel marketing. They’ve ignored and disliked our channel for so long that this will be a BIG CHALLENGE
Thank you Jerry for making it clear that a tariff is a tax on the consumer that buys the product.
Too bad a non-34x felon couldn’t make that point in the “fly over states”
I found this article most difficult to read, particularly from the beginning of the article through the section titled Curious Question Number One. Not a disrespectful question: was it translated into English? Seriously, some of the sentences are either difficult to read or make little sense. I’d sincerely appreciate a rewrite or better explanation of what exactly is going on with Harman’s, Sound United, and how all of that relates to this particular transaction.
Sorry – I do speak English. I was going fast and didn’t have time to have my proofer take a look. In the project management triangle you get two of the three elements of cost, quality and time. You win on cost because I give you the content for FREE. Speed – I got you there. Quality? I guess I failed you there but I don’t think you will find these insights anywhere else right now (or anytime)
Harman has NOTHING to do with Sound United (did we just start a rumor?) for the record.
I did have lunch with a beloved Ex-Harman exec in the Valley yesterday but that has nothing to do with Bose, McIntosh or Sound United.
Ne pas oublier aussi la ClassD, McIntosh comprend qu’il ne peux et ne pourra plus “Essayer” de justifier leurs tarif exorbitant face à la ClassD tout autant plus performante, mais à moindre coût. La supercherie des fabricant soit-disant HDG ce termine.
This acquisition makes sense if viewed from Bose’s primary perspective. They are principally an OEM car audio powerhouse supplying many car companies with either their mainstay in car entertainment or their step up offerings. They have run the table on the midfield portions of that market and are a dominant force. By acquiring McIntosh Group with McIntosh and Sonus Faber, they have acquired two credible high end brands that they will be able to bludgeon the competition with in the luxury car OEM market. They immediately step into McIntosh’s relationship with Jeep. Is it a large step to envision BOSE/Mc-Sonus leveraging successful partnerships with Jeep, owned by parent company Stellantis who also own Fiat and all the Italian brands in that umbrella? They will have instant access to pitching Ferrari to use Sonus Faber, a partnering that makes too much sense. BOSE is currently what, a $3Bn brand? With this acquisition, they will have the ability to make instant inroads into the luxury car brands. I predict $4bn within 5 -6 years.
Sadly, I doubt they will do much more than the minimum to hold up the high end home audio offerings if history is any guide. There’s simply too much money to be made in original equipment car audio contracts worth tens of millions per year. Mark Levinson was at their peak when Harman acquired them. While more than an afterthought today, they don’t allocate the resources to keep high end home gear a true priority. So good for Bose, but likely bad for high end home audio fans like myself. I hope I am wrong, but fear I am not.
Perhaps, Bose can make a profitable deal on mostly automotive?
Giving up on the enthusiast audience seems crazy.
So does blowing the chance to get a more mainstream brand like Denon or a high end speaker brand that IS RESPECTED in Bowers & Wilkins
Perhaps Bose can make McIntosh less gaudy at least.
Older audiophiles LOVE the industrial design of McInotsh.
Other legacy brands have “updated” their look. Technics comes to mind. Modern gear but really good/relevant ID. NAD is some ways too.
This will work ONLY if Bose can somehow keep the public from knowing it is behind Macintosh. Remember when Sony took over Fender? Or when Porsche brought out the really-Audi 914? Of course now ppl are actually collecting the 914, but it took decades for enthusiasts to view it as a Porsche.
Bose is behind McIntosh now.
That is not anything that can be hidden.
I’ve had some execs who were in on the Harman/Lexus deal explain JUST HOW this deal will make Bose a fortune with car audio. That’s good fort them.
We write about the hobby of audio and McInotsh is an important brand for decades. Will that stay the same? Your guess is as good as mine.
Hi, I am not sure of the timing of it, but I did hear that Bose had quietly sold off its professional-audio division. So, perhaps the motives included a dollop of plain old, perfectly legal Income Tax Avoidance. Assuming that Bose sold its pro-audio division at a profit.
Now, when you buy capital assets, unless there is some special temporary tax break in effect, you can’t just write off 100%. But, you can deduct the depreciation. So, who knows.
If that big volcano under Yellowstone Park blows, Bose’s management of McIntosh will be the least of our worries.
I am not seeing this as a tax play.
They want in on car audio and can try to make McInotsh into the audiophile version of Harley Davidson.
With the Levinson/Lexus deal as a model – this can be very profitable.
The question is: what will happen to the audiophile components going forward? Bean counters will want to slash expenses. Bose doesn’t spend a penny of ads in our world so there’s that to cut.