Cost of an AVR or receiver

[TankTop5]

Obviously there needs to be profit built in, that aside, what are the costs of building an AVR or receiver?

Specifically, 5.1, 7.1, 9.1 or 11.1. Is there a significant cost in the electronics or is it licensing that drives the price?

Amplification, is it the power supply or components?

HDMI, USB, component video, Toslink or RCA’s, are there licensing and royalties on patents?

I’m sure I’m not asking all the questions but how much goes into the components and how much goes into paying someone else for the rights to use their technology?

 

[lovinthehd]

Only a few have that level of access I'd think....and @M Code comes to mind first.

 

[Swerd]

In the past, I learned that the most expensive parts for amplifiers were:

• power supply transformer(s)
• machined aluminum parts such as heat sinks or face plate

For AVRs, I think the licensing costs for Dolby, DTS, HDMI, etc. have grown to become major expenses. That may be the reason why only the large audio electronic companies still produce AVRs. Small and medium size companies that produced AVRs in the past, have gone under or stopped competing in that market.

 

[M Code]

Obviously there needs to be profit built in, that aside, what are the costs of building an AVR or receiver?

Specifically, 5.1, 7.1, 9.1 or 11.1. Is there a significant cost in the electronics or is it licensing that drives the price?

Amplification, is it the power supply or components?

HDMI, USB, component video, Toslink or RCA’s, are there licensing and royalties on patents?

I’m sure I’m not asking all the questions but how much goes into the components and how much goes into paying someone else for the rights to use their technology?

Several factors to consider..

• Royalties to Dolby, DTS, Apple, WiFi, USB, HDMI, Audyssey
• Certain royalties are based on # of channels, more channels more $
• Profit to factory
• Profit to brand
• Profit to dealer
• Internal purchase/buying power based on production qtys
• Country of Origin, labor costs, different tariffs depending upon export destination
• Power transformer, most expensive internal component
• Tooling/design costs, amortized over projected qtys
• Software debugging/validation engineering staff overhead
• Agency certification/validation costs, UL, CE, FCC, Apple, Dolby, DTS
• Currency exchange rates affects internal components buying costs & export product FOBs

Royalties for HD are 2X those of SD, so yes many factors to consider. We know this subject well since we have developed/sourced AVRs for most major audio brands. Primary reason that several brands have withdrawn from the AVR category including Teac, Kenwood, JVC, Technics/Panasonic, Sherwood, Harman/Kardon, Fisher while the surviving brands have changed ownership including Marantz, Denon, Pioneer, Onkyo, Elite, Integra. 1 claim I can make, over the last 30 years I have been responsible for the development/delivering of >15 million AVRs so yes I know little about this subject...

Just my $0.02...

 

[TankTop5]

Several factors to consider..

• Royalties to Dolby, DTS, Apple, WiFi, USB, HDMI, Audyssey
• Certain royalties are based on # of channels, more channels more $
• Profit to factory
• Profit to brand
• Profit to dealer
• Internal purchase/buying power based on production qtys
• Country of Origin, labor costs, different tariffs depending upon export destination
• Power transformer, most expensive internal component
• Tooling/design costs, amortized over projected qtys
• Software debugging/validation engineering staff overhead
• Agency certification/validation costs, UL, CE, FCC, Apple, Dolby, DTS
• Currency exchange rates affects internal components buying costs & export product FOBs

Royalties for HD are 2X those of SD, so yes many factors to consider. We know this subject well since we have developed/sourced AVRs for most major audio brands. Primary reason that several brands have withdrawn from the AVR category including Teac, Kenwood, JVC, Technics/Panasonic, Sherwood, Harman/Kardon, Fisher while the surviving brands have changed ownership including Marantz, Denon, Pioneer, Onkyo, Elite, Integra. 1 claim I can make, over the last 30 years I have been responsible for the development/delivering of >15 million AVRs so yes I know little about this subject...

Just my $0.02...

So it would be safe to assume that a 9 channel or 11 channel AVR for under a grand would be sacrificing a lot on the internals.

 

[lovinthehd]

So it would be safe to assume that a 9 channel or 11 channel AVR for under a grand would be sacrificing a lot on the internals.

Sacrificing what particularly, tho? Build quality/longevity? Sound quality?

 

[TankTop5]

Sacrificing what particularly, tho? Build quality/longevity? Sound quality?

Power supply...

 

[lovinthehd]

Power supply...

Could be, but for 2ch use more than many 2ch units get....

 

[3db]

Several factors to consider..

• Royalties to Dolby, DTS, Apple, WiFi, USB, HDMI, Audyssey
• Certain royalties are based on # of channels, more channels more $
• Profit to factory
• Profit to brand
• Profit to dealer
• Internal purchase/buying power based on production qtys
• Country of Origin, labor costs, different tariffs depending upon export destination
• Power transformer, most expensive internal component
• Tooling/design costs, amortized over projected qtys
• Software debugging/validation engineering staff overhead
• Agency certification/validation costs, UL, CE, FCC, Apple, Dolby, DTS
• Currency exchange rates affects internal components buying costs & export product FOBs

Royalties for HD are 2X those of SD, so yes many factors to consider. We know this subject well since we have developed/sourced AVRs for most major audio brands. Primary reason that several brands have withdrawn from the AVR category including Teac, Kenwood, JVC, Technics/Panasonic, Sherwood, Harman/Kardon, Fisher while the surviving brands have changed ownership including Marantz, Denon, Pioneer, Onkyo, Elite, Integra. 1 claim I can make, over the last 30 years I have been responsible for the development/delivering of >15 million AVRs so yes I know little about this subject...

Just my $0.02...

Can you give us a ball park percentage cost for the amplifier stage, room EQ and processing, pre-amp stage, and rolayties?

 

[M Code]

Can you give us a ball park percentage cost for the amplifier stage, room EQ and processing, pre-amp stage, and royalties?

OK... Here are some rough % by section..
A. Amplifier stage 10-15% Will vary depending philosophy of brand, amount of overdesign. Major costs are amount of heat sinking, output devices.
B. Power supply 15-20%
As posted previously the power transformer is the most expensive single internal component, again will vary depending upon philosophy of brand, amount of overdesign
C. Royalties 8-15%
Depends upon # of channels, SW room EQ, type of SW DSP processing SD, HD, video
D. Processor power/resources 10-15%
Depends upon total software burden load for connectivity, audio, video, system control
E. Metal works, chassis 3-7%
Depends upon product size

Just my $0.02...

 

[3db]

OK... Here are some rough % by section..
A. Amplifier stage 10-15% Will vary depending philosophy of brand, amount of overdesign. Major costs are amount of heat sinking, output devices.
B. Power supply 15-20%
As posted previously the power transformer is the most expensive single internal component, again will vary depending upon philosophy of brand, amount of overdesign
C. Royalties 8-15%
Depends upon # of channels, SW room EQ, type of SW DSP processing SD, HD, video
D. Processor power/resources 10-15%
Depends upon total software burden load for connectivity, audio, video, system control
E. Metal works, chassis 3-7%
Depends upon product size

Just my $0.02...

Thanks MCODE.