The BOSE show on the Berkshire Hathaway Annual Shareholders Assembly in Omaha, Nebraska.
David A. Grogan | CNBC
Bose Corp. will buy the McIntosh Group, a deal that can give the Massachusetts-based firm management of one of the crucial storied names in high-end audio.
McIntosh will proceed to fabricate the high-end audio gear it’s identified for out of its longtime headquarters in Binghamton, New York, Bose CEO Lila Snyder mentioned. The deal additionally contains Sonus Faber, an organization that makes high-end audio system by hand in Italy.
The acquisition of the 2 audio workshops offers Bose entry into the high-end luxurious audio market, Snyder instructed CNBC in an interview.
“There is this opportunity for luxury, where the consumer is more discerning, really interested in the heritage and the story, and that handcrafted nature,” she mentioned.
Snyder, who took over as Bose CEO in 2020, didn’t present phrases or a worth for the deal. McIntosh was beforehand owned by Highlander Companions, a Dallas-based non-public fairness agency.
McIntosh has been making high-end amplifiers and different audio gear since 1949, and one in every of its gadgets can price tens of 1000’s of {dollars}. Sonus Faber sells a pair of audio system that prices $140,000.
The acquisition reveals how Bose is navigating an atmosphere the place there’s extra competitors in headphones and audio electronics than ever. Bose is privately held and does not share annual income, though it had about $3 billion in gross sales in 2023, in accordance with Forbes. It has about 3,000 staff.
Bose enters the high-end luxurious audio market
Luxurious audio — outlined as merchandise that price greater than $5,000 — grew 12% in 2023 to about $2.8 billion in complete gross sales, in accordance with an estimate from Futuresource Consulting. The deal will enable Bose to check a higher-end marketplace for its merchandise, that are already costly – a pair of Bose headphones can simply price $350.
“These are different customers that right now we’re not really reaching with our technology and with our products,” she mentioned.
Snyder didn’t rule out the potential for Bose producing McIntosh-branded headphones or different merchandise.
“We do think there’s a real opportunity around wearables in the luxury and high-performance space as well, which is something that we would expect you to see from us down the road,” Synder mentioned.
Bose is best-known for its audio system and its headphones, together with the QuietComfort headphones line, which was one of many first noise-canceling headsets to hit the market in 2000. It additionally sells soundbars, wi-fi earbuds, audio system and audio gear for vehicles. It divested a bunch that constructed sound methods for auditoriums and different skilled environments final yr.
The audio market has grown since Bose was one of many few high-end manufacturers.
Bose now competes towards a few of the largest firms on the earth, together with Apple, which purchased Beats Electronics for $3 billion in 2014 and launched the AirPods in 2016, concentrating on the premium headphone market.
There’s additionally new audio-focused competitors for Bose.
Sonos, which was greatest identified for its in-home audio system, launched its first noise-canceling headphones earlier this yr, though the corporate is reeling from an app redesign in Could that was obtained poorly by customers. Bose additionally spent the previous decade competing with sensible audio system from the likes of Amazon and Google that have been typically priced aggressively low to spur adoption.
The acquisition of the 2 luxurious audio workshops might assist Bose develop within the in-car stereo market, which Snyder mentioned makes up a couple of third of the corporate’s total enterprise. Sonus Faber produces audio system for Lamborghini vehicles, for instance, and a few Jeeps have a McIntosh-branded audio system. One risk that Bose is worked up about is that it could combine its noise-canceling expertise in electrical vehicles to make the automobile experience quieter, she mentioned.
“There are places today where the Bose brand probably can’t go. Lamborghini is a great example of that,” Snyder mentioned. “You really want the very best kind of cutting-edge technology to be in those luxury or highest-performing vehicles.”
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