Industry Update

ListenUp NHT: NHT's 75W M-00 powered two-way studio monitor has long been an audiophile favorite for the title of "best computer loudspeaker"—not that the competition has been all that fierce. The Benicia, CA–based loudspeaker manufacturer recognized that the powered monitor, initially marketed direct to recording engineers and in-home studio owners, was selling beyond its target audience and repositioned it as part of its PC Hi-Fi line. When Walt Stinson, co-founder of Colorado-based Audio/Video chain ListenUp discovered the M-00s when he was searching for something to pair with his portable player, he was so taken with their performance that he called ListenUp's marketing manager, Phil Murray, and told him that the chain had to carry them, because they were "simply the best multimedia speakers, bar none."

Accordingly, the chain will now sell the previously direct-only loudspeakers in its retail outlets and at its website. In fact, customers who click onto any of the PC Hi-Fi products on NHT's website will be forwarded to the Colorado company's order site.

NHT's PC Hi-Fi line consists of three products: the $249/each M-00, which features a 1" ferro-fluid–cooled fabric-dome tweeter, a 4.5" paper-cone woofer, and near-field and mid-field compensation switching; the $499/each S-00 compact subwoofer, a self-powered 125W design constructed around a long-throw 8" woofer; and the $99 PVC passive volume control.

On January 11, Ultimate Electronics, a 65-store specialty electronics chain, made two significant announcements: It entered into a stock purchase agreement with Mark Wattles Enterprises, LLC to purchase 6.85 million shares of common stock for $4.4 million and a two-year option agreement with Wattles to purchase 1.85 million shares of company common stock for $1.2 million; simultaneously, it voluntarily filed to reorganize under Chapter 11 of the US Bankruptcy Code to provide it with the necessary time to complete an operational and financial restructuring.

The Chapter 11 filing will allow Ultimate to continue its business operations while it works on post-petition financing plans, which will provide for the company's ongoing trade and employee obligations, as well as honor all customer service policies at the individual store level, including returns, exchanges, credits, and lay-away programs. The restructuring provides that vendors, suppliers, and other business partners will be paid under normal terms for the goods and services provided during the process. Ultimate has also requested Bankruptcy Court authorization to continue paying its employee wages and salaries, while offering the same medical, dental, life-insurance, disability, and other benefits, including accruing vacation time without interruption.

Recent visitors to the Parts Connexion website have been greeted with a rather sobering announcement: "pcX, along with all world-wide distributors and OEM users of Black Gate electrolytic capacitors, were informed this last spring that Rubycon (the sub-contract manufacturer) has apparently decided that they will no longer produce the Black Gate range of capacitors for Jelmax Corporation in Japan (BG's designer/patent holder). Both Jelmax, and their export agent, have confirmed that if this does come to pass, it will spell the end of Black Gate production by mid-2005 (although distributor/OEM orders are required to be placed by no later than the end of 2004). For whatever unspecified reason, finding another sub-contractor is not an option for Jelmax, apparently."

The Parts Connexion is still taking orders on Black Gates, although some other sources, such as Wellbourne Labs, already list them as being out of production.

Black Gate capacitors were popular among DIY hobbyists and many high-end manufacturers, despite their high cost, because they were said to offer lower self-generated distortion than other capacitor designs. In his 2002 Hi-Fi News overview on Black Gate's performance, Martin Colloms measured noise reduction of up to 50dB in some of the top models, although he did caution that in order to measure those results, he had to upgrade his test equipment by installing Black Gate caps!

One audio manufacturer we spoke with speculated that Rubycon, the firm that manufactured the Black Gate capacitors, was concerned over the expiration of the technology's patents, which date to the mid-1970s. Another Deep Throat insider claimed that it was simply a matter of supply and demand: The big demand for capacitors these days is for the organic semiconductor models used in computers, so that's what manufacturers, such as Rubycon, focus on, not low-demand, difficult to manufacture devices such as the "super" electrolytics.

How much impact will this have on high-end products? Probably not a tremendous amount, since few manufacturers have relied exclusively upon the costly components. Many hobbyists, on the other hand, are already compiling shopping lists designed to keep their referred parts on hand for a long time coming.

Dolby makes noise on the Stock Exchange: On Thursday, February 17, Dolby Laboratories began trading for the first time on the New York Stock Exchange under the ticker symbol "DLB." Dolby's initial public offering was 27,500,000 shares of Class A common stock (Dolby Laboratories offered 10,500,000 shares and Ray Dolby, founder and principal stockholder, released 17,000,000 shares). The stock was initially released at $18/share, considered somewhat pricey by many industry analysts. They were proven wrong, since demand exceeded supply; the stock opened at $23/share and ended its first day on the Exchange at $24.30.

Exhibiting the media savvy that has long been a hallmark of the company, Dolby arranged to have the Exchange's opening and closing bells rung in surround sound in the main trading room. The opening bell, triggered by Ray Dolby, chimed in a random pattern that skittered around the main trading floor. President and CEO Bill Jasper rang the closing bell, a special remix created by Dolby engineers, which added percussion and effects to the traditional bell sound, making it seem to jump around the room and envelop the listeners.

For the first time, the television feeds of the bells was delivered to television news stations and broadcast with Dolby Pro Logic II audio encoding, so that viewers with Dolby-equipped processors could experience them in surround.

Both Dolby and its rival, the NASDAQ-traded Digital Theater Systems (DTS), are expected to perform well as high-definition television technology and the DVD format continue to grow market share.

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