Bose is a brand with cult status and a guarantee of quality. Nevertheless, the audio company has been stumbling from one crisis to the next for several years. TECHBOOK took a closer look at the founding history of the popular headphone manufacturer.
Bose Corporation is an American provider of high-quality audio solutions for both private and professional use. In addition to speaker boxes, headphones and audio systems for cars, Bose also produces sound systems for halls, halls or churches that are precisely tailored to the respective environment. For several years now, however, the bad news surrounding the brand, which is revered in an almost cult-like manner by its fans, has not stopped.
From radio repairman to company founder
The Bose Corporation was founded in 1964 in Framingham (Massachusetts) by then 35-year-old Amar Gopal Bose. The life story of the company founder reads adventurously: his father was a Bengali revolutionary who fled from Calcutta to the USA to escape the British colonial police. When the later family import business began to falter during the Second World War, 13-year-old Amar G. Bose helped out with a radio repair shop. At 17, I was accepted to the Massachusetts Institute of Technology (MIT). He received his doctorate in electrical engineering in 1956 and eventually worked as an assistant professor at MIT.
As a lover of classical music, Amar G. Bose was bitterly disappointed with the acoustics of the stereo systems of his time and devoted himself to so-called psychoacoustics. This is a branch of psychophysics, which in turn deals with the interaction of the human perception of sound as a hearing event and with its physical sound field sizes.
What may sound very complex at first, Bose ultimately came to an important conclusion: only about ten percent of sound reaches our ears directly. The majority of the rest is previously reflected by surfaces such as walls and ceilings. Based on this knowledge, Amar G. Bose developed a loudspeaker that radiated sound in all spatial directions. The goal: To replicate the sound radiation of real musical instruments, such as in a concert hall. Here, too, the sound only reaches the audience after it has been reflected from the walls and ceiling.
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Idea factory instead of a headphone company?
The company’s self-image is still based on this motto today. This also goes hand in hand with Bose’s lifelong refusal to recognize conventional audio measurement methods as relevant evaluation standards for the quality of audio devices. The listener’s perception alone is the ultimate test, Bose said at the time. To this day, this attitude results in the principle of not publishing any relevant technical data about our own products.
Bose sees itself “not as an audio company, but as a think tank.” This somewhat idiosyncratic attitude did not harm economic success for a very long time. On the contrary: Bose still enjoys a reputation as a cult brand that fans adore – not least because the quality of the products is right. And even the design is worthy of an award, as shown by the presentation of the prestigious Reddot Design Award for the Portable Smart Speaker in 2020.
Bose can iron out potholes, but cannot prevent scandals
The Bose company is not only active in the field of consumer electronics, but also offers professional solutions. The equally famous and unusual commissions include St. Peter’s Basilica in Rome and the former Bundestag in Bonn. Bose supplied tailor-made sound systems here. And the company was even able to record successes in topics that at first glance seemed completely unrelated. For example, with the Bose suspension system for cars that was introduced at the beginning of the millennium. This wheel suspension system does not rely on conventional spring struts, but rather on four electromagnetic linear motors that actively compensate for uneven road surfaces. This allows a car to speed over bumps without the body moving.
However, anyone who thinks that the (economic) world is still in order at Bose is mistaken. For several years now, there has been bad news after bad news, scandal after scandal. A US customer sued Bose in April 2017 because the company had passed on data from users of wireless Bose headphones. A month later, Bose released an updated software version in which users could switch off the transfer of user data.
The numbers are rushing downwards
As if missteps of this kind weren’t painful enough, competition in the audio market is also constantly growing. Other companies also present strong products, particularly in the area of headphones and sound systems for private households. Apple serves a similar quality and style-oriented target group as Bose. Lifestyle brands like Beats, on the other hand, have established themselves among younger customers and gamers. The consequences are clear: Bose’s sales have fallen by around twenty-five percent since 2019. Last year, 2022, the company was only able to generate sales of three billion US dollars instead of the previous four.
In 2020 – shortly before the corona pandemic – the company went a drastic step further and divested itself of all 130 Bose stores in Europe, Australia, Japan and North America. As a reason, Bose pointed to the significantly changed purchasing behavior of customers. The trend towards online shopping has received a further boost during the pandemic years. Nevertheless, the closure of so many company-owned branches sends a worrying signal. The stores in Asia and the United Arab Emirates have so far remained unaffected by the cost-cutting measures.
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Image damage vs. confidence
The greatest damage in terms of image occurred at the beginning of December 2021. At that time, the Federal Cartel Office fined the German Bose subsidiary (Bose GmbH) a fine of almost seven million euros. According to the accusation, Bose has “restricted the freedom to set prices for the distribution of audio products by participating authorized dealers for years.” Soon afterwards, at the beginning of May 2022, the company announced that another 250 employees had been laid off. “Again” because Bose has repeatedly announced layoffs since 2019. Only around 6,000 people will work at Bose in 2022, the majority of them in Boston. In 2019, Bose still had around 9,000 employees.
But even if the numbers are moving downwards to an alarming extent, the trend could still be halted if the company is managed carefully through the crisis. Founder Amar G. Bose, who died in 2013, signed over the majority shares of his company to MIT during his lifetime. His institute has neither a say in day-to-day operations nor is it allowed to sell its shares. But the profits continue to finance research and laboratories. “We are a company with the legacy of a brilliant engineer, founder and innovator who loved music,” says Lila Snyder, who has led Bose since then and wants to lead it into a promising future. Idealism alone will not be enough, but the CEO has already shown great pragmatism in the past. The next few years will show whether Bose can maintain its position as an iconic and successful audio manufacturer.