An observation on Apple’s new Airpods Max vs. Bang and Olufsen’s Beoplay H95

Surprisingly (or unsurprisingly if you are familiar with Apple’s supply chain capabilities) given the recent talk, the Airpods Max are in fact a value offering from Apple.

Consider the nearest equivalent offering in the headphone space, Bang & Olufsen’s Beoplay H95, at $800 USD.

$549 versus $800. Yes, the folks from Cupertino put out a product at a price 2/3 of the nearest competitor (less some cables with an admittedly inferior case).

It is becoming clear that even at a discount the clever folks at Apple have effectively achieved equivalent or superior performance in most aspects that can be judged by the average user. i.e. sound quality, battery, connectivity, durability, features, etc.

On a material composition basis the former does lack the fancy leather and titanium accoutrements of the latter which justifies a portion of the price difference, and many more minor aspects where they qualitatively trade off.

A definitive judgement would require comparing the actual overall fit and finish, including hidden components, that would require tearing down both. However, as those aren’t available yet, it is reasonable to assume given the track record of both companies that the interiors are comparable to their exterior quality.

In other words the actual performance/quality per dollar for the Airpods Max is much greater.

Why is this noteworthy?

Although it is well understood by industry insiders that the bill of materials (BOM) cost for headphones, or any modern high-end consumer electronics product really, are a small fraction of the actual sale price, I would be willing to venture that the total BOM cost for Apple’s headphones are in fact significantly lower than for Bang & Olufsen since it would be unlikely for Apple to target an exceptionally low profit margin.

Here is where many would quibble that there have been cases with effectively vast increases in performance per dollar. e.g. a mid range product was updated to have almost equivalent performance with, or replaced, a higher end product with only a modest price bump.

Although this is also true, being due to component cost reductions, reduced profit margin, and so on, it’s nonetheless exceptional to put out an actually equivalent or superior product, not just a somewhat inferior substitute, at a lower price point, at similar profit margin level!, relying almost entirely on a more efficient supply chain. It is hard to avoid the conclusion that Apple enjoys an unparalleled advantage.

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