July 2014 Issue
The Biz

Bose Knows a Bit About Pro

Hundreds of framed copies of the company’s patents adorn the walls of the subterranean passageway that connects Bose’s headquarters to its R&D centerI recently attended an all-day technology demonstration at the Bose lair outside of Boston. On the way, there were lots of Bose active noise-canceling headphones visible onboard the flight. And in the room at The Charles Hotel in Cambridge, there was a Bose Wave radio, as iconic as a Herman Miller Aeron chair or a Le Corbusier chaise lounge, sitting on the nightstand. All this foreshadowing might have seemed like a PR person’s dream, as though somehow Ford had managed to make every car on the road taken to one of their dealerships a Mustang or an Escape. The reality is that it’s a fact of life: Bose has built a tremendous brand in the consumer electronics business.

But we weren’t here to look at radios or headphones, except as they appear in the engaging museum-like installations that Bose has built into one of the two huge buildings on its Framingham, MA campus, which are linked by a 400-foot underground tunnel right out of a Tom Clancy novel. Nothing really mysterious there; as anyone familiar with Massachusetts winters knows, it’s a great way to avoid a long walk on zero-degree wind-chilled January day.

Some History

The company is very cognizant of its own history, which dates back to 1964, when the late Dr. Amar Bose (1929-2013), then a professor of electrical engineering at MIT, started his own company using new, patented technologies he developed as a graduate student there. The first successful audio product Bose introduced was the 901 Direct/Reflecting speaker system, in 1968. It got people’s attention and opened the flume for a series of products, many of which are still manufactured today, including the Wave radio, the Acoustimass cube speakers and those ubiquitous headphones, which were introduced in 1989 for pilots and are now available in a consumer version worn far more frequently in the back of the flying bus.

But as I mentioned, we weren’t here to look at consumer technology (though they did proudly show off the new SoundTouch wireless streaming-music systems). Rather, this visit was about professional sound, a domain Bose has been in longer than many of us may have realized — its first “pro” speaker was aimed at the musician market in 1972 — and where the company has built up a considerable portfolio of products in recent years, including its Auditioner and Modeler software. These are topped off by the RoomMatch installed-sound modules, the tip of Bose’s spear into what has become the most robust arena in pro audio. It joins the existing Panaray series of installation speakers and the portable L1 series of column P.A. systems aimed at musicians.

Professional audio is Bose’s smallest division, but it has a pretty amazing legacy of R&D behind it, such as research into vibration damping to smooth the suspension systems on cars and cancelling out engine noise, such as the Bose Ride for heavy-duty trucking. The company’s approximately 10,500 employees around the world are mostly occupied with other technology groupings, including home entertainment, noise reduction technology (consumer headphones, aviation and military headsets), automotive, and medical device test equipment. But pro audio has become a major target for Bose in the 21st century. With RoomMatch, Bose took a unique approach: instead of configuring the array to meet the needs of the space it has to fill, RoomMatch offers system designers 42 array modules. Called Progressive Directivity Arrays, each of these have highly specific horizontal and vertical dispersion characteristics allowing customization to fit nearly any venue.

Ready For Prime Time

There’s no doubt that Bose’s technology is ready for prime time. It had better be: the live-sound product sector is more crowded than it’s ever been, and the sheer number of installed and touring speaker products on the market at the moment is mind-boggling. But as anyone who attended last month’s InfoComm Show might have noticed, live sound is a serious growth category, between the continued emphasis on touring as the main revenue driver in music and the post-recession resurgence of the live-event business. (Bose is focusing on the installed market now, but sources at the company say that a touring version of the RoomMatch is not out of the question.)

But Bose also has a unique set of challenges and advantages. The former is represented by the company’s hugely successful brand in consumer electronics, something that their pro execs candidly acknowledge can be a problem when trying to convince professional users that the same brand that makes the music sound so good in the home and in the car can also make it sound good in the performing arts center and the arena. In a very crowded market landscape, that can be a real issue.

Always interested in looking outside the box, Bose embarked on a extensive research project to improve automobile suspensions. This never went into production, but eventually became the basis of the Bose Ride truck seat system.But the advantages are as substantial. Bose is self-sufficient, technologically and financially. It’s a company predicated on R&D and has a wall of patents to back that up, and has a history of being able to cross-utilize its developments. It is also dedicatedly self-funded; Bose has studiously avoided going to either public markets or private venture sources for capital. True to its New England Yankee heritage, debt is something to be scrupulously avoided. Bose CEO and president Bob Maresca made a point of recalling the company’s one major experience with outside capital: In the early 1980s, Bose was getting deeper into the automotive market, but unfortunately just as what Maresca referred to as “the Volcker recession,” named for then-Federal Reserve chairman Paul Volcker, was getting underway. Interest rates as high as 18 percent were scary enough, but when the bank decided it didn’t like some of Bose’s plans for a particular market and called in the line of credit, it threw a wrench into an entire product strategy. No wonder that Maresca stated that it was the last time the company ever considered going on the street for capital. Ever since, all of Bose’s products have been completely self-funded.

Maresca acknowledged that “can slow down the pace of product development” and compel Bose to delay entering new markets with capital-intensive projects. But time is something that Bose has on its side; Maresca estimated that it took up to 15 years to develop RoomMatch and its PowerMatch amplification. Being economically independent also means that Bose can afford to fail now and then. In fact, the word “risk” occurs several times in an otherwise generic promotional video that the company showed. A willingness to fail is a prerequisite for success. “I can make long-term bets,” said Maresca.

And that’s what Bose’s venture into pro audio is — a long-term bet in a sector that’s showing pretty long legs.


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