Veteran Harary Targeting AV Specialists With New Audio Consoles, Tabletops

Former Harman and Boston Acoustics executive Eli Harary is heading a team of audio industry veterans in launching a luxury audio brand called AudioXperts, which the company hopes will give the specialty retail channel a differentiating product line “with margin."

Harary told Consumer Electronics Daily the concept has been in the works for a year and a half as he and his team studied a way for “guys we grew up with in the business” to offset that plunging margins of flat-panel TVs. Harary said longtime retail stalwarts such as Bjorn’s in San Antonio and Vann’s were “all struggling with the slowdown of panel sales,” he said, and they recognized that if they wanted to get on track they needed to figure out how to sell something “new and exciting for more money than what Best Buy could sell it for.”

AudioXperts’ product line will focus initially on integrated systems that provide a “complete solution,” including a one-piece surround-sound system and tabletop music systems. A line of speakers is in the works for later this year, Harary said. The 4TV surround-sound systems are built on a concept developed by ZVox Audio to use the surround-sound audio console as a base for the TV. Harary called the ZVox model “a great value for what it does, but most spouses wouldn’t put it in the house.” Black-box ZVox systems sell for $199-$499, while AudioXperts has stylized its four-figure 4TV products using smoked glass and aluminum casings.

Despite a height of just over two inches, the units pack multiple drivers that deliver powerful sound from 200-watt and 500-watt amplifiers, respectively, Harary said. The entry-level model includes four 4.5-inch long-throw woofers that produce the output of an 8-inch down-firing woofer, Harary said, while the flagship model comes with a separate wireless subwoofer that operates in the 5.8-GHz band. The 40-inch-wide model 2112 is priced at $1,999, and the 50-inch-wide model 5122, with the wireless subwoofer, has a suggested retail price of $3,999, Harary said. The subwoofer has a matching footprint to the console and can be placed either under the console, under furniture or elsewhere in the room, he said. Consoles will ship to dealers in early October, he said.

Other features of the 4TV consoles include Dolby Digital and DTS; aptX Bluetooth higher quality wireless music streaming; multiple inputs including digital, optical and USB audio for iOS devices; and a slot to accept Apple’s AirPort Express. The company chose compatibility with AirPort Express versus incorporating AirPlay in the console because “AirPlay costs money,” Harary said. Consumers who want streaming capability can buy the $99 AirPort Express module to slide into the port on the console, and those who don’t want the functionality “don’t have to pay for it,” he said. AirPort Express enables peer-to-peer connections, he said, so consumers don’t have to have Wi-Fi in a location to make it work. Consumers who put an AudioXperts product in a room out of reach of the household Wi-Fi are “screwed” if using AirPlay but not so if using AirPort Express, he said. Drivers in the higher end system are configured in a way that enables the consoles to deliver a distinct dipole effect, he said. The separate subwoofer uses 8 4.5-inch drivers, he said.

AudioXperts is taking on soundbars with 4TV, Harary said. He noted that the typical 4-6-inch height of a soundbar is not only unattractive but can get in the way of an infrared beam as it tries to reach a receiver that’s typically built into the bottom of a TV frame. The form factor of the 4TV eliminates that issue, he said. Also, the 4TVs swivel on bases so that if a customer swivels the TV to a particular viewing location, the speakers go with it. “The sound turns with the picture,” he said, something a soundbar placed on a shelf can’t do. Harary also noted that most flat-panel TVs -- despite the wishes of interior designers -- aren’t placed on a wall, which makes a shelf-mounted solution appealing for the 70 percent of consumers who don’t mount their flat-panel TVs.

At $2,000 and $4,000 a pop, Harary concedes 4TV won’t be a mainstream hit. “Will we sell 800,000 units the first year?” he said rhetorically. “Absolutely not, but there are dealers and consumers who are wanting something better than what’s available, and this represents something unique,” he said. The 4TV consoles have proximity sensors that “light up the touchpanel” when users approach within 6 inches -- “a sexy feature,” Harary said. The blue LED lights for the units are placed on top “so you're not looking at lights” when watching TV, he said.

Some of the retailers that will launch AudioXperts include Bjorn’s, Worldwide Stereo, Listen Up, Vann’s and Crutchfield, Harary said. The strategy for now is to focus on specialty retailers, Harary said. Crutchfield will be the only exclusive e-tailer, he said. A Crutchfield representative we spoke to wasn’t familiar with plans to carry the product, and he didn’t get back to us by our deadline after saying he would look into it.

Definitive Audio in the Seattle area will evaluate the AudioXpert product line, said Mark Ormiston, president. For Definitive, which “made its hay” in high-performance audio separates, the soundbar category is “not where we got our start,” but if AudioXperts delivers products that are “high-demand, we'd definitely be interested,” Ormiston said. With AudioXperts’ 21st century organizational structure -- the five staffers work out of their homes “from around the world,” Harary told us, and the products are being sourced from an industrial design company in China -- it’s too early for Ormiston to commit to carrying product, he said, but he plans to keep a close eye.

The category is “on fire,” Ormiston said, referring to connected devices based on AirPlay and AirPort. “That’s definitely where the growth is,” he said. “It’s not in preamps and power amps or projectors.” Definitive sells the B&W Panorama in “pretty good quantities,” he told us, despite not being “the best-looking piece on the market” and being “pretty pricey.” A decision to carry the AudioXperts solution would largely come down to its bass performance, he said. “If it’s got bass and room-filling sound-pressure level at that price point, it could sell,” he said. The level of customer interest in streaming audio categories is “not where we came from and not what we aspire to own,” Ormiston, but “we're selling more and more and more of it. We love that, but it’s causing an adjustment in our reality,” he said. Bottom line, Ormiston said, is that most of the passive soundbars on the market today don’t have the cabinet volume to reproduce adequate bass, and having to add a subwoofer “defeats the purpose.” AudioXperts’ challenge, he said, will be to “produce enough room-filling sound from one shelf."

Bjorn’s in San Antonio will carry the 4TV products, and owner Bjorn Dybdahl told us he’s excited about the opportunity. “Eli has an understanding of the higher end business,” Dybdahl said, and he believes the look of the product will appeal to high-end customers. Harary told us AudioXperts is offering dealers an alternative to the $2,200 Panorama. Dybdahl, a B&W dealer, said he'll continue to carry B&W and find a way to “make it happen” to carry the 4TV as well. Despite the high price of the AudioXperts consoles, Dybdahl believes there are enough well-heeled customers looking for “something really good and willing to spend the money.” With 4TV, AudioXperts “really has a niche,” he said. “The real issue for us is the middle customer,” he said. “That’s the area where we're getting hurt more."

Bjorn’s is still evaluating whether to add AudioXperts’ other offering, tabletop radios and speakers under the Eva (environmental audio) name that are made from “recyclable, renewable sources and biodegradable materials.” AudioXperts designed products for the needs of customers in both North America and Europe, where “they're actually environmentally concerned,” Harary said. “I wanted to do a product in a category that paid attention to the environment that could be built out of materials that were substantially recyclable or renewable,” he said. Models include a portable, battery-powered Bluetooth speaker ($299.99); a dock radio with Bluetooth ($399.99), a dock speaker with Bluetooth ($299.99), a tabletop clock speaker ($249.99) and a $199.99 companion stereo speaker. Users can add AirPort Express from Apple ($99) to get AirPlay wireless streaming, he said. The systems include wool covers and bamboo cases, according to company literature. The products are due out in late October, he said.

AudioXperts plans to come out with products in additional categories in the next two years, including outdoor and “unique headphones,” Harary said, but the company still wants to maintain “luxury” positioning. While the tabletops are far less pricey than the surround-sound consoles, in their category, Eva products are definitely in the luxury price band,” he said. Harary believes there’s a high-end customer segment waiting to be served technology. With the exception of Bang & Olufsen, he said, there aren’t many CE products that a specialty AV dealer can sell to a luxury customer. The margin-laden products in the audio segment tend to be audiophile products that are “less lifestyle-oriented” and “somewhat challenging to hook up,” he said. “There’s nothing to sell to the “Audi S Class” or Mercedes Benz customer, he said.

When plasma TVs first came out, they filled a prestige technology role that has disappeared, Harary noted, taking margins with them. “What was once a $4,000 or $5,000 sale is now an $1,800 sale,” he said of flat-panel TVs, and margins have been chopped from 40 percent to 20 percent or less in the process. In addition, brands that specialty AV dealers have traditionally supported have become more commoditized, Harary said, and salespeople don’t have anything they can “get excited about other than iPhone docking products and headphones.” Dealers’ ability to “sell an expensive thing to an expensive consumer is very limited,” he said.

AudioXperts’ staff includes: Harary, president; Mark Nazar, director of acoustical and electrical engineering; John Fischbach, director of product voicing; Jeff Litcofsky, director of marketing and communications; and Chick George, director of sales operations.