Bang & Olufsen, That Danish Audio Brand, Just Turned 90 — Are Good Looks All It Has? | QDaily Business History

This article tells you what it has done for design.

After graduating from university in 1924, Peter Bang spent six months at an American radio factory. He then went back to Denmark and brought in Svend Olufsen, a good friend from his student days, as a partner. With help from Svend's parents, the two built an attic laboratory at the Quistrup estate in Struer, a small town on the west coast four hours' drive from Copenhagen. That is how Bang & Olufsen was born.

Not until 1932 did they meet Henrik Dahl-Mikkelsen, an artist of only 16, who designed a logo for the company built on the abbreviation B&O. From then on, B&O became the name that better stood for the brand and the company, and it is still in use today.

The B&O logo

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In 2015, Bang & Olufsen turned 90. It already had nearly 600 directly operated stores in more than 60 countries and regions. For an appliance brand approaching a century old, that is not a large footprint — but B&O, which has always gone its own way, knows perfectly well that what it sells is more than the appliances themselves.

When you shop for audio equipment, you might line up a dozen brands to compare: Bose, Sonos, Harman Kardon, Denon, LOEWE, or Japan's Nakamichi. But if you already know you like B&O, you will not look at anything else, because what you are buying is not really the audio equipment either.

It may be a design masterpiece that will never embarrass your taste, or the finishing touch in a clean, modern home. This high-end Danish audiovisual brand has plenty of famous fans, Steve Jobs and Tom Cruise among them.

As the story goes, B&O speakers were among the few furnishings in Jobs's nearly empty mansion, and the biography Steve Jobs mentions that B&O was his favorite audio brand. In Minority Report, starring Tom Cruise, a scene showing him wearing B&O's A8 earhook earbuds turned many viewers into devotees of the earbuds' hard, metallic, industrial look. The product met the needs of a younger generation of enthusiasts who wanted hi-fi sound and good looks at once, and though the price was high, it sold well enough.

Ask people who are drawn to B&O and the first thing most of them say is "beautiful design." But design is not what the company was built on. Neither Peter Bang nor Svend Olufsen was trained in it. Both were fanatics about radio technology who studied at the same Danish electronics engineering school, and what drove them to start B&O was that huge interest in how radios worked.

Technology was also what made them a household name in Denmark. In 1929, when Danish cinemas were switching from silent film to sound, Steamboat Willie — the first film in which Disney's Mickey Mouse formally appeared — screened in Denmark through B&O loudspeakers, the first time Danish audiences felt the magic of sound this way.

In 1934, B&O launched the Hyperbo5 RG Steel radio-gramophone, which put radio, speaker and phonograph into one machine and made the company's products a model of high-fidelity audio equipment. It was also the first time B&O showed its design position: a pursuit of quality, of the human touch, and of beauty.

The Hyperbo5 RG Steel radio-gramophone

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But once an audio company has used technology to get on its feet, the question worth asking is what let it hold that ground while also becoming a genuinely international company that collected award after award.

Design is clearly the core strength that separates B&O from other audiovisual brands.

The 1920s and 30s were B&O's period of rapid growth, and also the years when Germany's Bauhaus school was pushing its modernist movement. Bauhaus held that earlier design had served only the privileged and cared too much about form. What it put forward instead was a strongly democratic idea: strip away all elaborate form, and let design serve nothing but basic function.

B&O's products were shaped by that German Bauhaus functionalism, and the work it produced in the 1930s shows it most plainly: the Beolit39 radio, a recording device made for the film industry, and rooftop loudspeakers for circus and military vehicles.

The Beolit39 radio stands out. Plastic-molding technology had just made curved molding possible, so B&O decided to combine the streamlined elements of the American car industry of the day with the look of skyscrapers, all in the service of function. It became a classic example of balancing beauty and function, opened new ground in radio design, and helped establish B&O's standing in industrial design.

The Beolit39 radio

This body of work set the tone for everything the company made afterwards and grew into B&O's signature design language. Its brand ambassador Stuart Tolliday once used five words to describe how he understands B&O: craftsmanship, detail, precision, beauty, and art object.

They became the company that best understood how to turn creativity into a business — always first in design, and never short of technical breakthroughs either. Even a disaster that nearly wiped out the factory did not stop them.

Near the end of the Second World War, because B&O refused to work with the Germans, Nazi sympathizers planted explosives in the company's plant in Gimsing. The blast leveled it, but not one of its 300 workers left.

They rebuilt the plant, their spirit unbroken, and went on experimenting through the 1950s with radios, radio-jukeboxes and televisions. In this period the architect Ib Fabiansen joined and brought new design thinking to the company's products, while the Englishman David Lewis, who joined in 1965, was called a "design genius of the electronics industry." He later became B&O's chief designer and led the development of many of its products.

David Lewis

Take the BeoMaster 900 transistor radio, launched in the 1960s. It was the first time a long, streamlined form had been used on a radio: technical progress meant the set no longer needed the bulky ventilation gear of earlier designs, which allowed something simpler and more elegant. It won the iF International Design Award in 1967.

The BeoMaster 900 transistor radio

Right after it, in 1967, came the BeoLab 5000 System, designed by the Danish industrial design master Jacob Jensen. The system included an amplifier, a radio tuner and two speakers, and was B&O's first audio system built to professional technical standards. It was also the first time Jensen tried putting a "slide rule" sliding tuning control into an audio product, an element later copied across many B&O designs. The product won both B&O and Jensen himself an iF International Design Award.

The BeoLab 5000 System

Jacob Jensen

In 1975, building on the BeoLab 5000 System, Jacob Jensen designed the BeoMaster 1900 integrated system. Thoroughly modern design was by then his standard, and its touch-sensitive buttons broke new ground for the industry. He also took the trouble to hide the buttons for less common functions under a thin, handsome aluminum panel that flipped open when needed, which made the BeoMaster 1900 look cleaner and sharper.

This breakthrough won Jacob Jensen the ID design award in 1976 and a place in the design collection of the Museum of Modern Art in New York. More telling still, the BeoMaster 1900 went on to be B&O's best-selling product for the next 20 years.

The BeoMaster 1900

The Museum of Modern Art also collected the Beogram 4000, launched in 1972 — the world's first turntable with an electronically controlled tangential tonearm — which took the ID and SIM design awards.

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In recognition of what it had achieved in design, 39 Nordic design works from B&O went on show in the spring of 1978, in the plain white Goodwin gallery on the second floor of the Museum of Modern Art in New York. Titled "Design for Sound," the exhibition was only the fourth solo show this long-celebrated museum had given a single brand since it opened in 1929. Eighteen of the products entered MoMA's permanent design collection, making B&O the design leader among companies of its kind.

Look back over 50 years of B&O products and you find many gifted designers behind them: Ib Fabiansen, Acton Bjørn & Sigvard Bernadotte, Henrik Sørig Thomsen, Lone & Gideon Lindinger-Löwy, Anders Hermansen, and Steve McGugan.

Each had a distinct style, yet all of them found one common outlet in B&O's products. "We want to fill a room with music, not fill a room with audio equipment. Shrink the equipment down, even make it a beautiful object in its own right, so that enjoying music comes with a layer of visual pleasure as well — isn't that better? Whatever their size, these products are a pleasure to look at, in quality and in form, like a work of art," Stuart Tolliday explains.

We said earlier that Steve Jobs was a B&O fan. Indeed, by Stuart Tolliday's account, Jobs often talked products over with B&O's developers and offered suggestions. The scroll-wheel control on the early iPod, for one, was inspired by the design of B&O's remote controls.

Beyond Apple, B&O shaped the design of many other products, including those of Sony, another company Jobs admired greatly. In 1961, former Sony president Akio Morita set up the Sony Design Center under the young Norio Ohga. Through the 1960s and 70s, Ohga worked out a spare, clean visual identity for Sony's radios, televisions, tape recorders and more — black plastic housings trimmed with silver metal edges. That was exactly the B&O design language then popular in Europe.

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Go through B&O's products one by one and you see that what the company has tended so carefully is not a business that supplies the market with products, but one that creates new demand in the market. It is only that this demand has always been a niche.

Look at B&O's 2014/15 annual report and you find that this company, adored by so many tycoons, took in only 2.356 billion Danish kroner (about US$335 million) for the year and lost 803 million kroner (about US$114 million). B&O blamed the poor showing on production problems and a weak market. Company president Tue Mantoni said that a run of new products failed to ship on time and that production costs came in higher than expected, hurting results.

Yet across the past five fiscal years, even in the best of them, 2011/12, revenue reached only 3 billion kroner (about US$430 million), on a profit of 100 million kroner.

In fiscal 2014/15, B&O's stores worldwide fell from 549 to 525. In Europe, the market where it began, it lost 13 stores in a single year.

B&O stores

A market share like that has everything to do with where B&O has always placed itself. Audio enthusiasts were never a large circle to begin with, and aiming at the high end made the circle smaller still.

As early as 1964, when B&O launched the BeoMaster 900, its first radio built on the new transistor technology, Svend — who had a real gift for sales management — coined a premium slogan for the brand: "For those who care more about design and quality than price."

The company has made custom leather cases with Louis Vuitton for its BeoSound 2 music player and Serene phone, and upmarket cars such as the Audi A8, R8, S8 and Q7 come fitted with B&O's Advanced Sound System. Aston Martin and Mercedes-AMG have used car audio systems developed with B&O as well. Even Hyatt and W Hotels, chains that make a point of upscale art and living, have chosen B&O's audio products.

The collaboration with Louis Vuitton

The Audi Q7 fitted with B&O's 3D sound system

The "higher than expected production costs" Tue Mantoni named are, of course, a real problem — but they are also exactly what the company has held to for 90 years.

Take the BeoLab 90 active speaker released this year, the product of years of work. Its sculptural form is dictated entirely by function; that is, its acoustic requirements are expressed entirely through its shape. It is in essence a complete audio system: an active speaker with 18 independently driven units, needing no separate preamp, power amp or DAC.

The BeoLab 90

The Danish company is just as particular about materials. The Beolit 15 portable speaker, for instance, has a body of the anodized aluminum B&O handles best, paired with a grain-leather carrying strap. The Beoplay A6 wireless speaker, meanwhile, is wrapped in handmade Kvadrat wool-blend fabric, which lets sound through well. And at this year's CES, the company showed the world's first wireless music player with a wooden touch surface, the BeoSound Moment.

The Beolit 15

The Beoplay A6 wireless speaker

The BeoSound Moment

B&O has always treated design as its core strength. "When people ask me what Bang & Olufsen does, I always say it comes down to three things: sound, design and craftsmanship," says Tue Mantoni.

For many years after it was founded, the company kept no designers on staff, recruiting big names from around the world instead. The reason was mostly a design one: outside designers are far less likely to be swayed by the market strategy of internal management, or to change a design concept because of how the business is doing. What B&O wants is work that stays truest to the design itself. Worth noting: B&O's management has no right to alter a design model — it can only accept or reject one. Only the designer may change the model.

Clearly, this was bound to make for a design experiment run without regard to cost.

And that is only the design side. Once a product enters development, B&O's "Cube" speaker sound-testing center, its listening panel of professionals trained in sound, and its "environmental lab" put every stage through round after round of design, engineering, material selection, manufacture, audiovisual testing, durability testing and safety testing. Only when all these punishing steps are done does a product's development cycle formally end — one or two years at the short end, three or four or more at the long end.

The factory

The testing center

The nephew of co-founder Svend Olufsen, who was also B&O's successor, once put it this way: "We work hard to make original masterpieces, because the world values things of lasting worth, not objects you throw away. We will stay ahead, because people expect it of us."

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But the fear that the company is "too small to survive on its own" has long troubled its management. However much B&O kept innovating on the product side, the financial pressure never let up.

In 2011, Tue Mantoni, a former McKinsey consultant, joined B&O as CEO. He wanted to improve the shape of the business — not to stay confined to the small market at the top of the pyramid, but to get B&O's products into a bigger one.

The mass-market young became the target. Who is willing to spend when times are hard? None other than the young, arty crowd who insist on feeding the soul even when money is short. Wake that group's inner appetite and their spending power is considerable. They may not be as exacting as audiophiles, but they are unusually alert to design and beauty.

In 2012, B&O launched B&O PLAY, a sub-brand built around headphones and portable speakers and aimed squarely at younger buyers. Next to B&O proper, B&O PLAY costs less and looks younger.

"B&O PLAY expresses B&O's core design values, giving users of B&O PLAY products the highest-quality listening experience," said Tue Mantoni. "I believe there will be many new customers who want a simple listening experience and will be drawn to buy our products through B&O PLAY. We will meet our customers' expectations with outstanding design and excellent sound. Many loyal B&O customers have also told us they would like to use products like these in a second home, in their children's rooms, or in the car."

Against fiscal 2013/14, B&O PLAY's revenue grew 15% in fiscal 2014/15 and accounted for 25% of the B&O brand's total revenue that year — a decent showing for a sub-brand only three years old.

The BeoPlay A2 Bluetooth speaker

The B&O Play H8 wireless over-ear headphones

We can think of B&O PLAY as a B&O that wants to get younger. Can it help this 90-year-old brand break open a bigger market?

Cover image from Bang & Olufsen