I think there is a lot of speculation and even a note of panic being expressed in some of these posts. I tried to explain the rationale of why Martin Logan might eventually stop producing legacy components, but I certainly wasn't intending to sound any alarms.
The only statement that Justin (speaking for Martin Logan) said was...
Yes we will continue to provide replacement panels for some older models (just like we do now), but as time moves forward we simply can't support EVERY model, especially the older ones.
That doesn't sound very finite to me.
I'm suprised that anyone is talking about resale value on their speakers. Did any of us really get into Hi-Fi as an investment?
Yes, there will always be a market for the resale of used speakers (and amps, and cables etc.), but I really don't think that Martin Logan suffers from resale erosion any worse than any other component/brand overall. Do they make money from the sale of replacement panels? Likely yes. But is it at the same margin that they garner from the sale of other (new) products? I'd be stunned if it were even close. Again, drawing on my own experience from a somewhat similar production environment I'd guess that it's somewhere around 5-6% if that (and we make 48-53% on new product sales depending on mix). It's all about economies of scale and production planning.
Let's say that I make 15,000 of my Class R fixtures per month. I've got my suppliers to deliver the material as I need it knowing that I'm going to bring it in the building, build the fixtures, ship them and invoice them before the end of the month. My supplier knows what materials I need, so he buys raw material based on that product, plus all the others that he knows I'm going to buy. He factors in his lead time to me, shipping time etc and in the end I know exactly what I'm going to get, when I'm going to get it and how much I'm paying for it.
I get a call from Customer Joe Blow asking if I can send him 12 feet of the Rave fixture I discontinued in 2006. I need to see if the perforator still has the tool to make the blank. He does, but we used a heavier gauge back then, so he'll need to order different material than what we currently use, and since we haven't used that material in several years it's a 6 week leadtime from the mill with a minimum buy of 2000 lbs. I need 3 four foot sections with a combined weight of 20 pounds. OK, I'll take the 2000 lbs and hope to use it someplace else; my supplier will hold the material for me as part of my stocking plan, but if I haven't consumed it in 3 months he's just going to send it to me regardless (essentially it's now my inventory). Now I've got material, but I need to get it formed and painted. The form die hasn't been used since 2006 either, so somebody needs to go find that. They do, but now they need to know when I want to take my standard production down to fit it in. Well, I can't let any current orders go past due, so I guess I'll pay them a premium to come in over the weekend and run it. I finally get all my parts, but my own production schedule is at capacity, so I'll also have to have somebody work overtime to build it. See how I didn't make any money on it?
The other option is to just go ahead and make all the components and keep them around, but again, inventory doesn't generate revenue until you ship it and invoice for it. In fact it actually ties up your cash flow so that you can't make more of the things that do make you more money.
What's a manufacturer to do?