Bose Acquires McIntosh Group

Bose Corporation has bought McIntosh Group. Even for those of us whose job it is to keep a finger on the pulse of the audio industry, this came as a big surprise. But it gets weirder! In 2011, two years before his death, Dr. Amar Bose donated the majority of his namesake company to his alma mater, the Massachusetts Institute of Technology. So technically, MIT now owns both McIntosh and Sonus faber, two of the biggest players in luxury audio. (MIT has non-voting shares of Bose, so although the university owns the majority of the company, it does not control business decisions.) Bose is easily one of the most well-known audio brands on the planet, but its decision to purchase McIntosh Group may seem odd to audiophiles, who understand the vast differences between the consumer audio gear made by Bose and the high-end electronics and loudspeakers made by McIntosh Group’s roster of companies. The acquisition significantly expands Bose’s portfolio into uncharted territory for the 60-year-old company. Bose acquired McIntosh Group from Highlander Partners, L.P., a Dallas-based private investment firm that had only owned the conglomerate since 2022. The financial terms of the transaction were not disclosed.

Bose describes the purchase as a “strategic move” that unites audio industry leaders with “more than 175 years of combined, deep technical expertise, a dedication to craftsmanship and artistry, and an unwavering commitment to reaching passionate music fans around the world.” According to the company, the acquisition will allow Bose to “infuse its industry-leading audio research and technology into the high-performance and luxury space,” while continuing to develop premium products for the consumer audio market. Although Bose began as a traditional loudspeaker manufacturer, the company is now best known for headphones and earbuds, soundbars, Bluetooth speakers, and other mass-market gadgets. The brand has reinvented itself more than once before and has made undeniable advances in critical technologies such as noise cancellation, hearing augmentation, and immersive audio. According to Bose, the company will continue to develop products and experiences in these popular categories, and it will allow McIntosh and Sonus faber to maintain their focus on high-end electronics and loudspeakers. Together, the brands will “imagine what’s possible in the future of audio — delivering new products, bespoke offerings, and unparalleled listening experiences for music lovers around the globe,” according to Bose. Under one roof, the collective will be able to offer everything from inexpensive earbuds to the most luxurious audio systems possible.

What’s in it for Bose?

We audiophiles think of McIntosh and Sonus faber as big fish, but Bose is on another level entirely. It has about 3,000 employees, and has taken in about $3 billion in sales each year for the last three years, according to Forbes. As I mentioned above, one of the keys to Bose’s ongoing success as a company has been its ability to reinvent itself. The iconic Bose 901 speakers are among the best-selling home audio products of all time, but in the 1980s and ‘90s, the company pivoted with the introduction of its wildly popular satellite/sub packages. These allowed Bose to transition into a home theater company, all while selling boatloads of Acoustic Wave Music Systems — compact tabletop systems like the ever-popular Bose Wave Radio. For the last quarter century or so, Bose has been best known for its noise-cancelling headphones. (They first arrived on the market when I was in high school, and there was really nothing else like them at the time. I bought a pair, but returned them because the noise-cancelling tech pressurized my ears in an uncomfortable way.)  Bose enjoyed several years as the noise-cancelling kings until competitors like Sony began to catch up. But the headphone market changed forever with the advent of Beats and the eventual sale of that company to Apple. Ever since Apple launched its line of AirPods, the tech giant has been the top headphone manufacturer in the world, easily outselling companies like Bose, Sennheiser, and other former leaders. At the same time, products like the Bose Wave Radio have now largely been replaced by smart speakers, again made by tech companies, such as Google and Amazon. By purchasing McIntosh Group, Bose might be preparing for another shift in focus as the landscape in headphones and audio electronics becomes increasingly competitive. 

Bose CEO Lila Snyder discussed the purchase in an interview with CNBC.

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 said. “These are different customers that right now we’re not really reaching with our technology and with our products. 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.

— Lila Snyder, CEO of Bose

Speaking of the road, one of the most obvious motivations for the acquisition has to be new opportunities in the automotive sector. Bose used to be the go-to name for premium audio systems in luxury cars. My old 1999 Acura TL had a Bose-branded system, and when my brother-in-law bought his first Audi over 20 years ago, Bose was available as an upgrade over the factory system. Now, several high-end audio companies have gotten in on the automotive action, pushing Bose out in the process. Last I checked, Bang & Olufsen made systems for Audi, Mark Levinson for Lexus, Harman Kardon for BMW, Burmester for Mercedes, and so on. Bose says that it will work together with McIntosh Group to “expand their research and continue to engineer authentic in-car experiences that redefine automotive sound,” leveraging its own 40-plus years of experience in automotive audio and adding the high-end appeal of brands like McIntosh and Sonus faber.

Over the last six decades we’ve delivered the best premium audio experiences possible; now, with McIntosh Group in our portfolio, we can unlock even more ways to bring music to life in the home, on-the-go, and in the car. We look forward to honoring the heritage of these brands, investing in their future, and pushing the boundaries of audio innovation to bring customers experiences they’ve never heard before.

— Lila Snyder, CEO of Bose

Right now, Sonus faber has automotive partnerships with Lamborghini and Maserati — two high-profile brands that offer ultra-luxury appeal but suffer from limited sales compared to brands like BMW and Volvo (both of which offer Bowers & Wilkins audio, by the way). Meanwhile, McIntosh has a partnership with Jeep, providing the in-car audio in select Wagoneer, Grand Wagoneer, and Grand Cherokee models. Both McIntosh and Sonus faber have huge potential in the car audio space. Both companies are known for their easily-identifiable styling, and both have brand-name clout in the audio world. Even Bose’s CEO recognizes that, in 2024 and beyond, a brand like McIntosh or Sonus faber is a better fit for luxury vehicles than Bose is. “There are places today where the Bose brand probably can't go,” she said. “Lamborghini is a great example of that. You really want the very best kind of cutting-edge technology to be in those luxury or highest-performing vehicles.”

Bose’s dedication to research and singular focus on audio provides a tremendous opportunity to complement and enable our own pursuit of delivering inimitable, ultimate-quality audio experiences. Gaining access to their expertise as a pioneer in automotive audio will also help us accelerate our presence and enable us to deliver solutions that are commensurate with our reputation and performance standards.

— Daniel Pidgeon, CEO of McIntosh Group

Any Benefits for McIntosh?

Since the announcement went live — less than a day ago as I write this — I’ve seen a lot of negativity online about the acquisition, and how it might represent the beginning of the end for two legendary audio manufacturers. Of course, this is not the first time that major players in audio have been snapped up. In 2016, Bowers & Wilkins was bought by a relatively unknown tech company called Eva Automation. (It has changed hands twice more since then, but is still going strong.) It was also in 2016 that Samsung began the process of acquiring Harman. More recently, the audio industry has watched with some trepidation as the purchase of Sound United by Masimo has led to a lot of question marks about the futures of Denon, Marantz, and the rest of the Sound United portfolio. Compared to these deals, Bose’s acquisition of McIntosh Group makes a lot of sense. 

Isn’t it better for McIntosh and Sonus faber to be owned by another audio company, rather than by an enormous tech giant or a health technology company with zero audio experience? 

In addition to extremely high brand recognition (always a good thing), Bose has deep pockets and considerable engineering resources at its disposal. But more importantly, Bose has legitimate reasons to nurture these companies and help them grow. Let’s not forget that McIntosh Group was most recently owned by an investment firm, whose only goal appears to have been to turn a quick profit by buying the company and selling it again after just two years. I understand why some audiophiles are skeptical of a mass-market company like Bose. What if the production of McIntosh electronics is moved away from New York in order to save money? Will Sonus faber’s reputation for Italian craftsmanship be maintained under new ownership? And I think it’s fair to mention that one element of this skepticism comes from the fact that Bose is hardly an audiophile darling. Despite the brand’s worldwide popularity (or perhaps because of it), audio enthusiasts don’t tend to show much love for Bose. But I think there’s a chance that this purchase is a good thing for McIntosh Group.

Also choosing to look for a silver lining is Audioholics founder and president Gene DellaSala, who suggested to me one way in which this purchase might be beneficial for McIntosh. Simply put, McIntosh speakers have been underperforming in recent years, and Bose’s infusion of cash and engineering resources might help McIntosh develop a new generation of loudspeakers with better performance. Personally, I haven’t had a great deal of experience listening to McIntosh speakers, but there is one thing I have noticed that would support Gene’s point. There are many audio companies that, like McIntosh, make all the components needed for a complete system — source components, amplification, and loudspeakers. Some, like JBL and Rega, make relatively affordable stuff. Others, like Yamaha, PS Audio, and TAD, will cost you more. And at stratospheric price-points, you’ll find brands like MBL, Burmester, and Tidal. For all of these brands, I have known some owners who prefer a single-branded system, in which every component is made by one company, but I’ve also known others who use one company’s speakers, but prefer to mix and match their electronics. I know a guy who recently bought PS Audio speakers, even though he uses Parasound amps, for example. I know people who have TAD speakers, but have never owned a source component or amplifier from the Japanese brand. Obviously, loads of people use JBL speakers with electronics made by other companies. But literally every system I’ve ever seen using McIntosh speakers was a pure McIntosh system. To me, that suggests that the speakers are only popular among loyal fans of the brand, and don’t have wide appeal to the audiophile community in general. Might that change under new ownership?

Conclusion

For Bose, the benefits of this purchase aren’t hard to grasp once you take a moment to think it over, and it’s hard to imagine a future in which Bose isn’t a major player in the audio world. It’s a well-established, well-funded company, and it’s not going anywhere. It remains to be seen whether McIntosh speakers might actually improve after this acquisition, or whether McIntosh and Sonus faber will gain significant exposure (and revenue) from new automotive partnerships. Both eventualities seem plausible. I’m optimistic that Bose will allow McIntosh and Sonus faber to maintain their autonomy, and that both companies will continue to design and manufacture their products without massive changes, but we will have to wait and see. Beyond that, there are countless possibilities. Will we soon be tempted by a new line of high-end, noise-cancelling headphones under the Sonus faber brand, to compete with the likes of Focal and Mark Levinson? Will McIntosh make a Dolby Atmos soundbar using Bose technology? Or will Bose-branded products begin to take pride of place among the McIntosh and Sonus faber offerings in high-end audio storefronts? Share your thoughts in the related forum thread below.