Nice thread about Denon Engine from John 00 Flemming

Having run a 500-person multinational consulting company over the past 12 years, I can’t help but nerd out on the business side of things. Denon is a business first and foremost.

In business parlance, this is known as “perceived value”. That is, if you purchase a product from a manufacturer, you perceive the value to be higher than the competition. In the case of pioneer, its perceived quality, features and even status. Marketing and the products themselves help a ton with this. Seeing Pioneer DJ gear at festivals being used by big-name DJs really helped their “perceived value” in the market.

An analogy for this is Apple. You get far less processing and storage power for your money with apple compared to the competition at the same price points. However, the perceived value in the market is different. This helps Apple continue to keep their prices high and make huge margins on pretty much everything they do because people perceive the value of their products to be higher, and improve their own status in society. Apple’s marketing push in the early 2000’s really helped make this possible, in addition to making products that are designed extremely well (for the most part) and last a really long time compared to the competition, thus making them stand out from all other computer makers.

Nintendo’s the same way also. :wink: Most of their consoles are low-powered compared to the competition. Their perceived value in the market doesn’t come from the consoles ability to crunch numbers, but rather the design (portability with the switch)

Denon’s big push to increase their perceived value is to produce products that:

  • Have a futuristic design
  • Have a longer shelf life via software updates.
  • Last as long as the competition when put up to similar abuses (prime series)

It’s likely that the Engine DJ designers really understood the trajectory of the mass democratization of hardware and software (thank you to Moore’s law and the Open Source :sparkling_heart: movement :sparkling_heart:!) that had been going on over the past nearly 45 years and realized that they could capitalize on these to increase their perceived value in the market by taking the best of many worlds:

  • Low-cost processing hardware (like Nintendo)
  • Well designed hardware (Apple)
  • Improve your status (Apple)

Finally, there is a model known as the Adizes corporate life cycle. This model speaks to how companies are made, grow, and die. Long story short, Pioneer likely is in the Stability phase, where Denon is likely in their Prime phase. (no pun)

The company is now the industry leader but it doesn't have the same drive and hunger as before. The company welcomes new ideas but with less enthusiasm. Financial people are running the company and in order to please the shareholders they focus on short-term results rather than investing in R&D, which is needed for future growth.

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Cool chart - where’s it from?

Couldn’t help it. :rofl: I literally took the time to link the article.

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Excellent! That certainly puts my rumination to shame.