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Newcomers Bring New Blood To Audio Business

7/21/2013 08:00:00 PM Eastern

NEW YORK — The audio category might be the oldest segment in today’s consumer electronics industry, but it’s attracting youthful newcomers targeting growth niches.

The newcomers include Mass Fidelity of Toronto, Stelle Audio Couture of Newport Beach, Calif., and Auralic of Beijing.

Auralic is targeting the audiophile-oriented component- audio market, Stelle is targeting fashion-oriented Bluetooth speakers, and Mass Fidelity is targeting the premium wireless-audio category with a Bluetooth emphasis that could potentially expand to Wi-Fi, a spokesperson said.

The companies’ targeted segments are all growing.

Sales of Bluetooth-only speakers (excluding docking speakers with Bluetooth) are posting double-digit gains. In 2012, retail-level sales of Bluetooth speakers rose 484 percent in units and 333 percent in dollars at the retail level, NPD reported.

Wi-Fi speakers without docks grew 77 percent in units last year and 18 percent in dollars, The NPD Group said.

Component-audio sales are also up (see Editor’s Choice), and although the electronics separates segment is declining, niches such as USB DACS and other computer-related audio are rising, as are products related to headphones, marketers said.

Here’s what the companies are bringing to market:

Mass Fidelity’s first product is a $249 Bluetooth receiver promoted as offering CD-quality sound.

The Relay, milled out of a seamless block of aerospace- grade aluminum, is also promoted as looking like a high-end audio component, thanks to its brushed finish and radius corners.

To deliver the performance of high-end components, the Relay streams AAC and AptX over Bluetooth and features 24-bit Cirrus Logic audio processor, 24-bit Burr-Brown DAC, and dual simultaneous 24-bit/48kHz digital outputs. With dual digital outputs, users can connect one digital output to a surround receiver or outboard DAC and the second output to a headphone-amp/DAC combo. A gold-plated analog RCA output is also included.

Mass Fidelity was founded by Benjamin Webster, an audiophile, self-taught electronics technician, recording studio owner and recording engineer. The company, which focuses on marrying exterior esthetics with sound quality, plans additional wireless audio products but hasn’t released a timetable.

With the Relay, the company contended it can dispel Bluetooth’s reputation for fidelity and range limitations. “Bluetooth’s reputation springs from poor execution in the cheap Bluetooth audio devices on the market,” the company said in a white paper.

The key to achieving a high level of sound quality “is to preserve all the information and keep overall system noise ultra low,” the company explained. Mass Fidelity achieves those two goals by using AAC, AptX, 24-bit audio processors and DACs, and custom proprietary code that synchronizes the device’s digital clocks to ensure against timing errors, dropouts and digital artifacts, the company said.

Stelle Audio Couture’s sales opportunities lie in appealing to fashion- and decor-minded women who shop at home décor stores and fashion-oriented stores.

Stelle (an Italian word for stars pronounced stel-lay) is building distribution for two Bluetooth portable speakers, one designed to look like a ladies’ clutch, and the other taking the shape of a foot-tall cylinder. All products are available in different colors or finishes.

The company was founded by CEO Anna Perelman and president Wayne Ludlum, audio-industry veterans who are focusing on Bluetooth speakers targeted to females and the places they shop.

The Audio Clutch and cylinder-style Pillars are sold online at StelleAudio.com and in Fred Segal clothing stores in West Hollywood and Santa Monica. Versions of the Clutch by designer Rebecca Minkoff are available in select Nordstrom locations.

The Clutch, which retails for $349 to $399 depending on color and ornamentation, can be carried like a clutch or worn with a strap around the shoulder. The 9-inch by 2.2-inch by 4.7-inch fashion accessory pops open to reveal two 1.5-inch drivers that play back music from a Bluetooth-equipped mobile device or from a device connected via 3.5mm aux input. It also features hands-free speakerphone capability and lithium-ion battery that lasts for 15 hours at “nominal” volume levels.

The foot-tall Stelle Pillar, priced at $349 in four finishes, measures 4.5 inches in diameter and packs a pair of 1.5- inch drivers and a 3-inch woofer. It also offers 15-hour battery, speakerphone capability, and 3.5mm aux input but adds ability to charge a USB-connected mobile device when the speaker is plugged into AC power. It’s available in high-gloss white, brushed aluminum, matte black and pewter.

Auralic, a Beijing-based company that entered the U.S. market earlier this year with hand-built computer- and headphone-oriented audio components, will establish a U.S. sales office and warehouse facility in the coming months to expand its dealer base, co-founder Xuanqian Wang said.

Founded in 2009, Auralic has already established distribution in Europe, South Korea, Japan and Thailand.

The company exhibited for the first time at an International CES in January, has begun advertising on the web, and plans its first ads in the coming months in consumer print publications.

Auralic designs its own products and positions them as offering higher performance and build quality than competing products at the same price point, said Wang. He and co-founder Yuan Wang describe their mission as producing high-end audiophile products that are reliable, upgradable, and user-friendly.

Although other Chinese audio brands are available in the U.S., those brands offer only tube-based components, whereas Auralic offers solid-state electronics with digital inputs, Xuanqian Wang said.

Current products available to U.S. dealers include the $1,899 Taurus MK II headphone amp with balanced Class A output, said to be able to drive any headphone pair and $3,499 Vega DSD/PCM DAC/preamp with multiple digital inputs, asynchronous USB input, double-rate (5.6MHz) DSD decoding, and PCM up-sampling to 1.5MHz and 32 bits.

The $2,100 Taurus Pre fully balanced line-stage preamp with balanced and unbalanced analog inputs, Class A output, and headphone output is also part of the U.S. line along with the $2,499 Merak monoblock hybrid Class A amp with output of 200 watts into 8 ohms or 400 watts into 4 ohms. Two can be bridged together to deliver a combined 800 watts into 8 ohms.

All products are compact models featuring aluminum chassis.

In October, the company will add two combination DAC/headphone amps at $999 and $1,999. Details weren’t disclosed.

For products that connect to a PC, Auralic is looking for dealers who understand computer audio and can advise customers on how to adjust computer hardware and software settings for optimum music quality, Xuanqian Wang said.

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