Emotiva Announces Price Hikes Due to China Tariffs - AVS Forum | Home Theater Discussions And Reviews
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post #1 of 58 Old 06-18-2019, 10:11 AM - Thread Starter
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Emotiva Announces Price Hikes Due to China Tariffs

Trade wars have economic consequences and one of them is higher prices. AV equipment manufacturer Emotiva has sent out an email with a link to its blog announcing imminent increases in the price of its products as a direct consequence of the 25% tariffs being imposed upon Chinese goods by the US government.

The company notes that during the first round of tariffs, it simply absorbed the increasing cost. However, due to the size of the second round of tariffs, and the extended nature of the trade war, it is forced to increase prices because it's business model has always depended upon smaller margins. Therefore it does not have the leeway to simply absorb the cost of the trade war. Emotiva further notes that the price increases do not simply affect the products it sells that are made in China. Because of the fact that many components also come from China, the cost of its US-assembled products will also increase.

Emotiva says that the price increases will go into effect on July 1. Granted, the company's products are already such a good deal, and increasing cost will likely not affect their status as a provider of high price-performance ratio AV options.

In its message, Emotiva expresses hope that the tariffs and the trade war are temporary, and that it will be able to reevaluate its pricing at some point in the future. If that happens, it will be interesting to watch and see which companies follow suit. But for now, what's happening is a price increase (otherwise known as inflation).

Per Emotiva, not everything the company makes will be affected, it will be limited to the following:

1. The XMC-1 Upgrade Program is not affected by the price increase.

2. Processors; RMC-1, XMC-2, and RMC-1L WILL NOT increase in price.

3. Loudspeakers and Subwoofers are unaffected by the tariff and pricing is unchanged.

4. Products that are affected, will only see a nominal 5% increase. We have absorbed the bulk of price increase internally.

Mark Henninger
Editor, AVS Forum

Last edited by imagic; 06-18-2019 at 01:28 PM.
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post #2 of 58 Old 06-18-2019, 11:08 AM
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well we knew it was coming (industry wide) .. now it's here ...it's up to the consumer to absorb it , boycott it , or do something about it ...

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post #3 of 58 Old 06-18-2019, 11:13 AM
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post #4 of 58 Old 06-18-2019, 12:33 PM
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Quote:
Originally Posted by imagic View Post
Trade wars have economic consequences and one of them is higher prices. AV equipment manufacturer Emotiva has sent out an email with a link to its blog announcing imminent increases in the price of its products as a direct consequence of the 25% tariffs being imposed upon Chinese goods by the US government.

The company notes that during the first round of tariffs, it simply absorbed the increasing cost. However, due to the size of the second round of tariffs, and the extended nature of the trade war, it is forced to increase prices because it's business model has always depended upon smaller margins. Therefore it does not have the leeway to simply absorb the cost of the trade war. Emotiva further notes that the price increases do not simply affect the products it sells that are made in China. Because of the fact that many components also come from China, the cost of its US-assembled products will also increase.

Emotiva says that the price increases will go into effect on July 1. Granted, the company's products are already such a good deal, and increasing cost will likely not affect their status as a provider of high price-performance ratio AV options.

In its message, Emotiva expresses hope that the tariffs and the trade war are temporary, and that it will be able to reevaluate its pricing at some point in the future. If that happens, it will be interesting to watch and see which companies follow suit. But for now, what's happening is a price increase (otherwise known as inflation).

Emotive has long promised to perform more manufacturing in the U.S. Looks like that hasn't happened.

Many companies such as Yamaha, Denon and Marantz have been smart enough to manufacture their products outside of China. Production costs are as low or lower in places like Vietnam, than in the PRC. It is also possible to to have 100% control of a manufacturing operations outside of China vs. a max. of 49% in China. It was smart to relocate production out of China years ago. It is unfortunate that Emotiva is evidently expecting its customers to pay for what appears to be its management misjudgements.
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post #5 of 58 Old 06-18-2019, 12:43 PM - Thread Starter
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Quote:
Originally Posted by bigguyca View Post
Emotive has long promised to perform more manufacturing in the U.S. Looks like that hasn't happened.

Many companies such as Yamaha, Denon and Marantz have been smart enough to manufacture their products outside of China. Production costs are as low or lower in places like Vietnam, than in the PRC. It is also possible to to have 100% control of a manufacturing operations outside of China vs. a max. of 49% in China. It was smart to relocate production out of China years ago. It is unfortunate that Emotiva is evidently expecting its customers to pay for what appears to be its management misjudgements.
More like assembly, raw parts for all this stuff is still coming from China one way or another. Unless, as you point out, you are a global corporation that can afford to pick and choose the country that you open a factory in. But I doubt even those big mfgs. are agile enough to move the entire production capacity out of China immediately, so unless they really anticipated this, I'm not sure how insulated anybody is. I literally do not know, I haven't read that much up on it.
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post #6 of 58 Old 06-18-2019, 12:44 PM
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We all know what's really happening here. Emotiva has been wanting to increase the prices all along. The tariffs are just an excuse for doing it now. Mark my words, the prices will NOT go down when this madness stops a year from now and these tariffs are gone.
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post #7 of 58 Old 06-18-2019, 01:11 PM
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I don't want to get caught up into the politics of all this, but I don't see how tariffs to this magnitude don't start to impact bottom lines and, ultimately, the customer. Emotiva is not a massive company who can absorb these types of costs and their business model is direct sales through the internet to the consumer at very competitive prices.

I suspect more internet direct companies will start to be more affected as time goes by.

I also understand, as a nation, these massive deficits (some of it being import vs export) is not sustainable either.
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post #8 of 58 Old 06-18-2019, 01:20 PM
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They also posted this follow up today ...

Hi all,

Just a quick comment to avoid any confusion or misunderstandings...

1. The XMC-1 Upgrade Program is not affected by the price increase.

2. Processors; RMC-1, XMC-2, and RMC-1L WILL NOT increase in price.

3. Loudspeakers and Subwoofers are unaffected by the tariff and pricing is unchanged.

4. Products that are affected, will only see a nominal 5% increase. We have absorbed the bulk of price increase internally.

Hope this clarifies things for everybody.

Thanks for your understanding and support!

Big Dan

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post #9 of 58 Old 06-18-2019, 01:20 PM
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Quote:
Originally Posted by ack_bk View Post
I don't want to get caught up into the politics of all this, but I don't see how tariffs to this magnitude don't start to impact bottom lines and, ultimately, the customer. Emotiva is not a massive company who can absorb these types of costs and their business model is direct sales through the internet to the consumer at very competitive prices.

I suspect more internet direct companies will start to be more affected as time goes by.

I also understand, as a nation, these massive deficits (some of it being import vs export) is not sustainable either.

Deficits and debts and trade imbalances must be dealt with... but not this way. It never works for either side and yet their hackles get raised and that leads to even more economic damage.

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post #10 of 58 Old 06-18-2019, 01:25 PM
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Here's the rest of the story (posted on the Emotiva Lounge)...

"Hi all,

Just a quick comment to avoid any confusion or misunderstandings...

1. The XMC-1 Upgrade Program is not affected by the price increase.

2. Processors; RMC-1, XMC-2, and RMC-1L WILL NOT increase in price.

3. Loudspeakers and Subwoofers are unaffected by the tariff and pricing is unchanged.

4. Products that are affected, will only see a nominal 5% increase. We have absorbed the bulk of price increase internally.

Hope this clarifies things for everybody.

Thanks for your understanding and support!

Big Dan
"


Here is a direct link to Dan's post...

http://emotivalounge.proboards.com/post/995502
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post #11 of 58 Old 06-18-2019, 01:29 PM - Thread Starter
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Good info, post updated

Quote:
Originally Posted by DOC1963 View Post
Here's the rest of the story (posted on the Emotiva Lounge)...

"Hi all,

Just a quick comment to avoid any confusion or misunderstandings...

1. The XMC-1 Upgrade Program is not affected by the price increase.

2. Processors; RMC-1, XMC-2, and RMC-1L WILL NOT increase in price.

3. Loudspeakers and Subwoofers are unaffected by the tariff and pricing is unchanged.

4. Products that are affected, will only see a nominal 5% increase. We have absorbed the bulk of price increase internally.

Hope this clarifies things for everybody.

Thanks for your understanding and support!

Big Dan
"


Here is a direct link to Dan's post...

http://emotivalounge.proboards.com/post/995502

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post #12 of 58 Old 06-18-2019, 01:30 PM
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Yep - received an email this morning about the price.

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Quote:
Originally Posted by imagic View Post
Trade wars have economic consequences and one of them is higher prices. AV equipment manufacturer Emotiva has sent out an email with a link to its blog announcing imminent increases in the price of its products as a direct consequence of the 25% tariffs being imposed upon Chinese goods by the US government.

The company notes that during the first round of tariffs, it simply absorbed the increasing cost. However, due to the size of the second round of tariffs, and the extended nature of the trade war, it is forced to increase prices because it's business model has always depended upon smaller margins. Therefore it does not have the leeway to simply absorb the cost of the trade war. Emotiva further notes that the price increases do not simply affect the products it sells that are made in China. Because of the fact that many components also come from China, the cost of its US-assembled products will also increase.

Emotiva says that the price increases will go into effect on July 1. Granted, the company's products are already such a good deal, and increasing cost will likely not affect their status as a provider of high price-performance ratio AV options.

In its message, Emotiva expresses hope that the tariffs and the trade war are temporary, and that it will be able to reevaluate its pricing at some point in the future. If that happens, it will be interesting to watch and see which companies follow suit. But for now, what's happening is a price increase (otherwise known as inflation).
Quote:
Originally Posted by bigguyca View Post
Emotive has long promised to perform more manufacturing in the U.S. Looks like that hasn't happened.

Many companies such as Yamaha, Denon and Marantz have been smart enough to manufacture their products outside of China. Production costs are as low or lower in places like Vietnam, than in the PRC. It is also possible to to have 100% control of a manufacturing operations outside of China vs. a max. of 49% in China. It was smart to relocate production out of China years ago. It is unfortunate that Emotiva is evidently expecting its customers to pay for what appears to be its management misjudgements.
Quote:
Originally Posted by imagic View Post
More like assembly, raw parts for all this stuff is still coming from China one way or another. Unless, as you point out, you are a global corporation that can afford to pick and choose the country that you open a factory in. But I doubt even those big mfgs. are agile enough to move the entire production capacity out of China immediately, so unless they really anticipated this, I'm not sure how insulated anybody is. I literally do not know, I haven't read that much up on it.

Likely most of this offshore manufacturing (varying amounts of fabrication and then assembly), whether in China, Vietnam, or Malaysia, is performed by contracted firms, not the company with its name on the product. In some cases the contract manufacturer does some of the design as well. Each of these countries, and many others, provides financial aid to local manufacturers, it's a tough world! Foxconn, headquartered in Taiwan, is the most familiar contract manufacturer name. It does most of the assembly work for Apple and has facilities around the world. Most all the high-tech parts in electronics come from Korea (examples, Samsung, LG), Taiwan (the largest contract fab TSMC for example), Japan (a few examples,AKM, Rohm, higher quality capacitors, and D&M higher level AV products) or the U.S. China typically supplies low tech parts. Obviously there are exceptions here. Marantz moved the production of the AV770X from China to Vietnam around the AV7703 time frame, with much improved reported quality. China's 2025 plan is to produce much more sophisticated electronics, build large numbers of semiconductor, fabs, etc. Most of this would be done with government money, likely though government owned companies that are common in China.

AVR's for example, have quite a low tech design. Nothing wrong with that. It's all that is required to meet the requirements of their market. Most of the circuit boards are two layer except for the digital board. Most any contract manufacturing firm can easily make these boards, install the components, etc., as part of its offerings. An example is the Marantz AV8805. The digital board is perhaps over two layers, but the DAC board is two layers. The power supply/XLR board, the switch mode power supply, and the board that connects to the 13 or so HDAM boards, for example, are two-layer boards with physical, wire jumpers, where required, instead of using say 4-layer boards. This is certainly acceptable, but low tech in today's world of electronics. Assembly of the boards is likely a combination of automated placement equipment plus hand labor for placing components such as electrolytic capacitors. Final assembly is likely by hand.
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post #14 of 58 Old 06-18-2019, 08:12 PM
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Quote:
Originally Posted by bigguyca View Post
Emotive has long promised to perform more manufacturing in the U.S. Looks like that hasn't happened.

Many companies such as Yamaha, Denon and Marantz have been smart enough to manufacture their products outside of China. Production costs are as low or lower in places like Vietnam, than in the PRC. It is also possible to to have 100% control of a manufacturing operations outside of China vs. a max. of 49% in China. It was smart to relocate production out of China years ago. It is unfortunate that Emotiva is evidently expecting its customers to pay for what appears to be its management misjudgements.
Do you think that Emotiva management should have foreseen the tariffs?

That seems like a bit of a stretch.
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post #15 of 58 Old 06-18-2019, 08:18 PM
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Schiit Audio - 2019, Chapter 2: “Made” No More

This is a good read on the topic of "Made in America" including legal definitions relevant to consumer electronics...


2019, Chapter 2: “Made” No More
https://www.head-fi.org/threads/schi...#post-14735246
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post #16 of 58 Old 06-18-2019, 09:08 PM
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Wow....5% on *some* products. What is that net of inflation...3%? Definitely worthy of a press release and email blast. Thanks Dan.
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trade deals/tariff's...never heard of them before. you can always just buy straight from china if ya want.

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well we knew it was coming (industry wide) .. now it's here ...it's up to the consumer to absorb it , boycott it , or do something about it ...
It's not life or death. Just wait until things change.
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Yeah it's crazy. We can't make mentions of what caused this craziness from happening, and only speaking about tariffs here - but on the review threads and many of the movie threads, certain movies are bashed on AVS - calling them out for being "feminism films", "Craptain" films, and similar items without any reprimanding or deletion of any kind.

But carry on speaking about the tariffs, but don't we dare talk about the origins of said tariffs!
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Reminder: As always, political commentary is not allowed on AVS Forum nor is it wanted by the vast majority of its members.

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Yeah it's crazy. We can't make mentions of what caused this craziness from happening, and only speaking about tariffs here - but on the review threads and many of the movie threads, certain movies are bashed on AVS - calling them out for being "feminism films", "Craptain" films, and similar items without any reprimanding or deletion of any kind.

But carry on speaking about the tariffs, but don't we dare talk about the origins of said tariffs! [IMG class=inlineimg]/forum/images/smilies/rolleyes.gif[/IMG]
+1
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post #22 of 58 Old 06-19-2019, 03:24 PM
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When shopping for speakers and subs, one of my factor to go with was supporting U.S products, U.S. made.
Have seen "Designed in U.S." and/or "Assembled in U.S.". Great, isn't it?
Too bad, 90% of the materials are imported and probably 90% of that figure is from China.
Stop tweaking the word, just label "Made in China" up front.

I'm not talking about Emotiva in particular but in general.
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post #23 of 58 Old 06-19-2019, 04:49 PM
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I give Emotiva credit for being upfront about all of this. May other companies do the same.

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post #24 of 58 Old 06-19-2019, 04:51 PM
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I give Emotiva credit for being upfront about all of this. May other companies do the same.

Most won't. They'll just up their prices without saying a word.

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Quote:
Originally Posted by bobknavs View Post
Do you think that Emotiva management should have foreseen the tariffs?

That seems like a bit of a stretch.
No way. We have been told for two years about a tax cut that will save us money and then we get tariffs that take that all away.

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Oh boy, the actual problem predates this forum's existence and the fact that some people just now talking about this for reasons we can't discuss, tells more about them and their apparent lack of knowledge of this long standing issue. China should have never been part of the WTO, and I leave it at that.

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post #27 of 58 Old 06-19-2019, 05:25 PM
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Originally Posted by Seilerbird View Post
No way. We have been told for two years about a tax cut that will save us money and then we get tariffs that take that all away.

Man, you received a tax cut? I sure didn't. A lot of people I know didn't. It mostly went to stock buybacks and those sorts of corporate shenanigans.
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post #28 of 58 Old 06-19-2019, 07:25 PM
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This is a good read on the topic of "Made in America" including legal definitions relevant to consumer electronics...


2019, Chapter 2: “Made” No More
https://www.head-fi.org/threads/schi...#post-14735246
It boils down to where the work is done, you can design something anywhere you want, but where you hire people to assemble it, that counts. And if you assemble it in the U.S. then people in this country get the jobs. Since parts come from all over the world these days, if you assemble here, that's what I would call made in 2019.

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post #29 of 58 Old 06-20-2019, 03:10 AM
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Man, you received a tax cut? I sure didn't. A lot of people I know didn't. It mostly went to stock buybacks and those sorts of corporate shenanigans.
My income has remained exactly the same for the last three years. My federal Income Tax was $300 less this last year. But I spend a boatload of money at Walmart and they will be forced into raising their prices.

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post #30 of 58 Old 06-20-2019, 03:07 PM
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Emotive has long promised to perform more manufacturing in the U.S. Looks like that hasn't happened.

Many companies such as Yamaha, Denon and Marantz have been smart enough to manufacture their products outside of China. Production costs are as low or lower in places like Vietnam, than in the PRC. It is also possible to to have 100% control of a manufacturing operations outside of China vs. a max. of 49% in China. It was smart to relocate production out of China years ago. It is unfortunate that Emotiva is evidently expecting its customers to pay for what appears to be its management misjudgements.

I don't know, before this trade war thing even happened, a lot of those companies moved manufacturing to Vietnam. I think they mostly did it for cost cutting reasons. It's a lot cheaper to manufacture in Vietnam than it is in China. Hopefully the Onkyo takeover will lead to Marantz and Denon manufacturing getting moved to Malaysia- not the best venue but , to me, definitely beats "made in China or Vietnam".
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