Denon & Boston Acoustics Line Show

I sat with Boston Acoustics' new Senior Vice President, General Manager Eli Harary. Harary has had a long and successful career in consumer electronics and came to Boston Acoustics earlier this year from Harman. Over lunch we discussed the challenges he is facing as he seeks to re-energize the Boston Acoustics brand, which has been recently acquired by D&M Holdings. I commented that while many years ago I remember Boston Acoustics being a familiar brand with a good reputation, they seem to have been off the radar for a while. He agreed with the assessment and sees a fantastic opportunity to grow this brand and return to the strong reputation their products deserve.

Harary commented that it amazes him that with all the current technology and advances in home audio & video, that most people still purchase large black rectangular boxes (speakers) that sit in their living rooms. He and his team are looking to rethink what a speaker looks like and how it fits in to the décor of a room. Perhaps foreshadowing the event we were about to walk into, he suggested that colors, textures and shapes are all things that could be approached in a fresh way.

After lunch we gathered around a U-shaped table in a conference room to view the presentations. Bob Weissburg, President of D&M Holdings welcomed us and explained that they had picked Cleveland for the event because of the Rock & Roll Hall of Fame and Museum, since our industry is (or at least used to be) all about music and audio. (The day would culminate with a dinner and private tours at the museum - but more on that later). He then gave an overview of the D&M family of companies. D&M Holdings, Inc. owns the following brands: Denon, Boston Acoustics, Snell Acoustics, McIntosh, Marantz, ReplayTV and Escient, as well as the Denon Pro and Marantz Pro lines for the professional audio market.

D&M is a global company, focusing on managing the house of brands under its roof. They feel that global brand consistency is the key to success, and that "one brand fits all" is no longer relevant in today's marketplace. Their key objectives for the coming year are to continue to diversify with their "house of brands" approach, expanding their reach and breadth of products in the premium home A/V market. They seek to build strong brands, respond to customer trends, grow faster than the market, and to continue to acquire brands that will diversify and compliment their portfolio, thus satisfying a broad range of consumers.

Throughout the day, service and training were stressed. This company appears ready to aggressively grow through excellence in their product line and especially in customer service, support and satisfaction. Everyone who spoke stressed training and service, and it was pointed out that "premium price/class products deserve premium service." Some trends that Weissburg sees coming include the fact that home theater will continue to grow through flat panel sales and HD content. Audio will grow based on the receiver becoming the "master control device," as well as media manager-type devices that will grow as consumers become more comfortable with technology. Application-specific speakers such as in-wall, built-in and outdoor types continue to increase in popularity. Overall, premium audio sales are recovering and should continue to improve in the coming year.

Weissburg then introduced Phil Cohn, Senior VP Sales & Marketing for Boston Acoustics. Cohn stressed a fanatical commitment to customer satisfaction and dealer support, and discussed "The Boston Sound," which he described as "honesty in the sonic performance, the way the artist intended." Regardless of price, there should be a consistency in performance. He stated that one out of every four employees at Boston Acoustics is an engineer, and pointed out that all products are engineered in-house.

Eli Harary, Senior VP & General Manager, described that under the D & M system, they have implemented a new product development process that will accelerate time to market, thus enabling greater innovation. This new process will cut time to market by 50% from their pre-D & M days. He was very excited to announce a new design partner focused on end-user solutions. The partner company is ELEVEN, which he pointed out was not ten, but one better - eleven! I expect that they are working on the things he hinted at earlier during lunch, such as textures, fabrics, finishes, shapes, etc.

Jeff Cowan, Director of Training and Product Support, introduced two new product categories, both of which were in development prior to the D & M acquisition. He further described "The Boston Sound," stating that regardless of price, form factor or intended application, all Boston Acoustics speakers should share a pure neutral balance, accurate and color-free sound, and have a wide power response (which he described as a uniform wide dispersion for a big "sweet spot" and more life-like sound). Boston Acoustics is an engineering-driven company that uses advanced computer software and hardware in the manufacturing process. All products are built to extremely exacting standards for 100% quality assurance to ensure precise duplication of the reference standard.

Denon & Boston Acoustics Line Show: Overview - page 2

Boston Acoustics E Series Speakers

The first new product category introduced was the new flagship speaker line, the E SERIES . He described this line as the ultimate expression of the Boston sound. It is a unified industrial design for use in a variety of applications, including bookshelf, stereo monitors, surrounds, and front main and center speakers.

The cabinets are a cast aluminum shell, with wood veneer side panels that are removable and are able to be painted, stained or lacquered to the customer's choice.

They can be used in a horizontal or vertical orientation, can be shelf, wall or stand mounted, and feature several custom installer-friendly features. It is a very flexible design - compact, more suitable for many of today's typical applications. The speakers are engineered with an elegant appearance and mixture of colors and textures, while still providing ultra-high performance.

He brought one of the empty aluminum shells and passed it around - it is quite substantial, very clean and sleek in appearance. Here are some of the features:

• 5mm thick aluminum extrusion
• internal bracing/ribbing
• MDF/Aluminum composite front baffle
• interchangeable "groovlock" side panels allow for customization
• available unfinished - to truly customize
• cast aluminum end caps with reversible foot
• two sets of gold plated 5-way binding posts
• integrated wire tunnel
• ships with hex key for different configurations of end caps and side panels
• platform supplied with E50 & E70 for tilting & anti-resonate
• optional wall bracket (ALL models can be wall mounted)
• optional floor stand w hollow post - elegantly integrates with speakers •
• dealer-friendly product because of the flexible speaker configurations
• mix & match
• sold as singles
• all speakers can be used as main, center or surround

Here is a brief description of the lineup (prices are per speaker):

• E40 ($400) and E60 ($600) Bookshelf Speakers, with a 4-1/2-inch woofer designed specifically for the E-Series by Boston's transducer engineers [The E60 has a 5-1/4 inch woofer, both were designed in-house at BA for the E Series];
• E50 ($500) LCR Speakers, with the VR H.O . tweeter, a high-output version of Boston's acclaimed VR tweeter, designed to be used vertically or horizontally;
• E70 ($800), featuring two 5-1/4-inch woofers with a 1-inch VR H.O. tweeter in the middle, designed to be used as a left-, center-, or right-channel speaker;
• The Flagship E100 Speaker ($2500), standing an impressive six feet tall, with six 5-1/4-inch woofers, one 5-1/4inch midrange/woofer, one 3-1/4-inch midrange driver, one 1-inch VR H.O. tweeter, and one rear-facing VR tweeter.

The second new product category introduced was the XB Powered Subwoofer line of products, which were described as "forward thinking, front firing." All have Boston's exclusive BassTrac circuitry, designed to eliminate distortion, metal grills and low profile feet that allow the speaker to hug the floor.

Here is a brief description of the lineup:

• The flagship XB6 ($500) features a large 12-inch Deep Channel woofer, BassTrac circuitry, with a 600-watt Dynamic Power Rated amplifier in a vented enclosure, with a frequency response of 29Hz-150Hz (+/-3dB). The volume control is conveniently mounted on top of the cabinet, flush with the surface, so the top remains perfectly flat.
• The XB4 ($400) features a 10-inch Deep Channel woofer, BassTrac circuitry, a 400-watt Dynamic Power Rated amplifier in a vented enclosure, and a frequency response of 38Hz-180Hz (+/-3dB). As in the XB6, the volume control is conveniently mounted flush with the top of the cabinet.
• The XB2 ($300) features an 8-inch Deep Channel woofer, BassTrac circuitry, a 200-watt Dynamic Power Rated amplifier in a vented enclosure, and a frequency response of 45Hz-200Hz (+/-3dB).

Finally, in an effort to respond to some questions, it was made clear that Boston Acoustics will no longer produce or sell receivers, nor any other product that would compete with other D & M product lines. Also, the E Series will NOT be carried in Circuit City, but there will be products from the rest of the Boston Acoustics line in the stores - not derivatives.

After a short break we returned to the conference room for Denon's presentations. Stephen Baker, President of Denon USA, started off explaining that he was encouraged by positive business trends. Consumer electronics revenues are up, fueled by triple digit increases in flat panel sales. The audio component business was up by 6% in June of this year, and residential custom installer revenues increased 18% to 7.3 billion in 2005. This is all great news for Denon, who is again outperforming the industry.

Baker discussed Denon's strategies and objectives, including getting closer to key customers and increasing awareness and market share. They plan to do this through expanded resources, renewed commitment to sales training, and direct consumer outreach through the web & targeted media.

Jeff Talmadge, Director of Product Development and Systems Integration introduced many new products. He explained that while last year's focus was introducing their home-theater-in-a-box products, this year's focus is on custom installers.

The 2006 lineup of A/V receivers all include the following features:

• 7 channel power amps
• XM ready
• multizone capability
• iPod ready
• new S series remote control
• 8 channel analog input for high definition DVD formats
• all HDMI inputs/outputs are 1080p, 7.1 24/96 PCM compatible

Denon & Boston Acoustics Line Show: Overview - page 3

There are a lot of notes and we'll be sure to provide more detailed information (some of it has already been posted) but to get a quick overview of the new products that Denon is featuring - here are some of the highlights:

Flagship AVR-5805MkII ($7,000)

• 5 HDMI inputs
• scales analog input signals up to 1080p
• full Ethernet functionality
• improved web browser
• this model now shipping

AVR-4806CI ($4,000)

• on-board scaler
• CI secret installer modes
• now shipping

AVR-2307CI ($799)

• XM-HD 5.1 processing
• HDMI 1.1; 2 in, 1 out
• analog to HDMI upconversion (but not scaling)
• ships in August

AVR-1907 ($549)

• XM-HD 5.1
• auto setup w/microphone
• 3 component in, 1 out
• component upconversion

ASD-1R iPod Dock ($129)

• available in black or white
• not proprietary to Denon products

DVD-3930CI ($1,499)

• Realta HQV - same chip used in the DVD-5910CI
• universal formats player
• PC compatible scaling
• Burr Brown audio DAC's

DVD-2930CI ($849)

• Recon VX chip - first DVD player to use this chipset
• 10 bit video processing and scaling
• 1080p output via HDMI
• lowest price DVD player with Denon Link

DVD-1930CI ($369)

• scaling to 1080p
• HDMI
• universal formats player

DVD-1730 ($169)

• HDMI version 1.1 compatible
• 1080i scaling via HDMI

Also introduced were two new compact systems, the S-81 and the DHT-487DV . The S-81 ($599) is a 2-channel personal audio system that is XM and iPod ready, and boasts 50 watts per channel. The DHT-487DV ($699) is a 5.1 home-theater-in-a-box product that includes a Denon A/V receiver & DVD player with speakers and a 100 watt powered subwoofer.

During a short question & answer period, HDMI was a hot topic. After Talmadge was asked when Denon would be putting version 1.3 in their products, he explained that version 1.2a is the current and latest version available. It allows for transmission of SACD, but requires the added expense of DSD in the equipment. The DVD forum has not finalized version 1.3, and even when it does, it will still need to be tested by manufacturers and then officially released. Dolby must also update their chipset. He expects all of this to happen no sooner than mid-2007. He was unsure at this point if current HDMI equipped Denon products would be able to be upgraded to 1.3, and will not know the answer to that until the spec is finalized.

He was also asked about Blu-Ray. Denon wants to release the right products at the right time, and they do not want to release a product too early. He stated that they will be market-driven in their decision-making process. In other words, they aren't buying into the hype just yet either.

We were then escorted to a small meeting room for a demo of the E Series speakers from Boston Acoustics. The room was set up with 3 E-100s flanking a large screen. The mains had gorgeous cherry veneer side panels. They were bi-amped from an AVR-5805MkII. There were also four E70s for side and rear surrounds. There were a total of 5 XB powered subwoofers spread around the room. The quidditch scene from Harry Potter sounded amazingly clear, with objects appearing to fly not just from left to right, but overhead. We also listened to selections from Dire Straits in 5.1 audio and Stevie Wonder in 2-channel Pure Direct mode. The speakers sounded fantastic.

The E100s are also beautiful - tall, thin, dark and handsome. The bass was tight and controlled, and never felt boomy. I look forward to getting a chance to listen to these in a more critical and controlled environment.

After the demo, we went into another meeting room where the full line of Boston Acoustics and Denon products were displayed. Boston was displaying every imaginable type of speaker. On display were in-wall, in-ceiling, outdoor, bookshelf, floor standing, built-in, on wall, and the new E Series. They also had some clock-radio, table radio, and CD radio units. One of the more interesting speakers they had on display was a subwoofer (Sub 10F) that is designed to be built-in under the floor, with the port positioned similar to a typical heat/air vent that you would see in many homes.

Denon had on display all of its current and freshly announced A/V receivers, stereo receivers, DVD/CD players, as well as their home-theater-in-a-box systems. It utilized their well-recognized fancy layout that we've seen with their tradeshow floor displays at the industry trade shows.

Overall it was a great day in Cleveland (you don't hear that very often) that ended with the evening party at the Rock & Roll Hall of Fame Museum. Denon had rented out the entire museum for a private party, complete with a lavish spread of food & drinks, as well as tours. If you are ever near Cleveland, you need to carve out at least half a day to visit the museum. It is nirvana for any music lover. I could have easily spent a full day immersed in the exhibits.