Swiss loudspeakers as expensive as a supercar up-ending perceptions about industry viability

If the US and Australia want to reinvigorate manufacturing they should cast an eye to Switzerland where a million-dollar speaker make is profitable and growing.

Goldmund's Apologue Active Wireless Speaker, priced from $1.045m and made in Geneva, proves even top-end manufacturing can be profitable.

Manufacturing has become a talking point thanks to Donald Trump. But there is a flaw in the US President’s plan.

Mass production of television sets, phones and other consumer goods is unlikely to come back to America in the volume he expects, despite the retaliatory tariffs he has unleashed on the world.

But that doesn’t make manufacturing more products impossible. Just ask Carsten Roth, who oversees a team of 30 people in Geneva, Switzerland, and who make loudspeakers for people so rich that the biggest problem they face when crunching a household budget is whether to buy a new Ferrari or a sound system.

Mr Roth has led Goldmund Sound Systems since April last year and says the business is profitable despite choosing to continue to make its towering speakers in Switzerland, and not across the border in France where labour costs can be three times cheaper.

Goldmund Sound Systems chief executive Carsten Roth.

Part of the reason is the speakers are not cheap. They can cost more than $1m. But Mr Roth insists Goldmund isn’t expensive.

“I’m not sure we are priced pretty high because when you go to the audiophile world – which is still existing in more traditional markets, such as China – people are spending up to $2m for their system,” he said.

“Our top model retails about 600,000 Swiss franc as an active speaker and that’s basically all you need. That makes it close to $US800,000 ($1.26m).”

Still, it allows Goldmund to maintain its quality, fund research and development and continue to manufacture in Switzerland – where “Swiss Made” has become its own value proposition.

He has adopted the same model as the Swiss watch industry by manufacturing at lower volumes, using higher-quality materials that differentiate the company from its cheaper, more affordable, mass-production competitors such Sony, Sonos and Bose.

And this is Mr Roth’s top tip for how developed countries like America and Australia can still win at manufacturing without luring Asian production back onshore.

Just look at Ferrari – which Mr Roth regards more of a competitor to Goldmund. It has a market value of €73.86bn, or $US83.94bn. That is almost as big as Ford and Volkswagen combined, which make millions of vehicles a year compared with Ferrari, which makes less than 14,000.

Ferrari has a new architecturally-designed factory in Maranello, Italy. It makes less than 14,000 vehicles a year. Picture: Duccio Malagamba

“We have always been niche since the company’s founding 47 years ago. We have never intended to be a consumer brand or premium consumer brand or be in this mass market,” Mr Roth said.

Goldmund is a true luxury brand. It sells to only the top 1 to 2 per cent of audio customers in each country, which equates to just under 2000 new customers per year.

An analogy would be that Mr Trump would be more successful at encouraging a luxury American-made iPhone that might cost $20,000 apiece and be manufactured at low volumes, rather than attempting to shift Apple’s production to the US.

After all, Apple sells about seven iPhones a second and chief executive Tim Cook says the US just doesn’t have enough skilled workers to produce in the quantities consumers demand without defects.

Goldmund’s Apologue active wireless speaker, which is priced from $1.045m.

Australian company Maison Sabre is making iPhone cases in France that are priced at more than $16,500. It says its revenue is now about $50m and it sells a product every 60 seconds.

But reigniting local manufacturing is not as simple as entering the luxury market and slapping on an eye-watering price tag.

Making such quality products and developing a brand is hard work.

Omega x Swatch Mission on Earth watch.

Even the Swiss Watch industry faced an existential crisis in the 1980s when it came under threat from Japanese quartz movements. Switzerland responded by forming Swatch Group, which not only makes cheaper plastic watches but owns high-end brands Blancpain, Omega and Hamilton.

Swatch created successful collaborations with its more premium brands, launching an Omega MoonSwatch which retails for $525, and a pricier Blancpain model that costs $655. This compares with a regular Swatch costing as little as $95.

Ultimately it’s about leaning into a particular company’s strengths rather than seeking to replicate Asian-style mass production.

“The Japanese are not real competition these days,” Mr Roth said.

“All these (hi-fi) brands from the ’80s and ’90s have not really developed, not as a brand and also not as a product. That probably comes from the fact that they need volume to justify R&D (research and development) investments. That’s not the case for us.

“We have an R&D team of seven people who are never satisfied, always putting the bar higher, sometimes without a commercial reason. And you must be crazy to create such a product. Japanese companies would never do that.”

That’s why Mr Roth considers Goldman’s competition to be other luxury brands and not audio companies.

“Our real competition is Ferrari and Richard Mille. If we are talking about less than 2000 people per year becoming a proud owner of a Goldman product for some of these ultra-high-net-worth individuals, I would say the question is rather whether to buy another Richard Mille limited edition for $400,000 or $500,000, or the latest Ferrari, or SUV, or whatever – or an amazing and outstanding sound experience for their homes.

Richard Mille RM47 manual winding limited edition openwork dial.

“If you look at Richard. He started the company in the year 2000 and look at that company today. He’s producing less than 5000 watches, and he is as valuable as Patek Philippe, which is doing 50,000.”

Mr Roth said Goldmund’s strength was developing speakers that can be tuned to a particular room, without the need for acoustic panelling and heavy carpets to maintain high fidelity.

“We are pioneers in the active speaker. (With our) own technologies, we are able to adjust them to the room, which makes them more appropriate for, let me say, rich people’s homes, which in most cases are a very minimalistic environment.

“You have got lots of big reflections, big glass fronts, no carpets on the floor. We are able to adjust all our active speakers, sound wise, to each room. And when you study more about the performance of a speaker, no matter active or passive, you will understand that a single speaker sounds completely different in different rooms.”

Goldman makes about 2000 of these speakers a year.

Mr Roth is not too fazed by the effect of Mr Trump’s tariffs.

“People who really want to buy a Ferrari for $500,000 will also pay $550,000. China is a very big market for us, I would say if not the biggest, bigger than the US is right now,” he said.

“However, the whole concept of world trading is changing and we have to adapt, that is obvious for everyone.”

Goldmund has entered the Australian market via a partnership with Addicted to Audio, which has stores in Melbourne, Sydney, Perth and Adelaide.

Originally published as Swiss loudspeakers as expensive as a supercar up-ending perceptions about industry viability