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Harman Moves AGK Offices to California, Keeps Research in Austria

The future of long-standing microphone brand AKG has been confirmed by its parent group but it will face competition from a new company founded by former key engineering personnel. Austrian Audio was announced following the closure of AKG’s headquarters in Vienna, which was done as part of Harman International’s bid to consolidate and integrate the R&D, manufacturing and supply chains of all its subsidiary companies.

Development of AKG broadcast, music recording and live sound mics - as well as headphones for both the professional and consumer sectors - is now being carried out at Harman International's 'centre of competency' (CoC) for acoustics in Northridge, California. This sits alongside CoCs for electronics, DSP and video/control and the lighting division, which are based in Richardson, Texas and Aarhus, Denmark respectively. These feed designs to three NPI (new product introduction) centres - in Shenzhen, China; Bangalore, India; and Budapest, Hungary - which work across all Harman brands.

Harman International owns a large number of leading manufacturers of equipment and technology used in broadcast and live event production, including Studer, Soundcraft, JBL, Crown amplification and Lexicon processing systems. Somewhat ironically for a company known for acquiring others, Harman itself was bought in March this year, by the South Korean electronics conglomerate Samsung. Soon afterwards 650 redundancies were announced across Harman subsidiaries but David Glaubke, Harman's director of global communications, says the changes at AKG were decided before the takeover happened.

"The plan started last year and was part of an overall programme of restructuring and consolidation," Glaubke explains. "Looking back over Harman's acquisitions very little had been done with integrating the brands into the corporate organisation. The subsidiaries had their own autonomy but over the years they began to reorganise into business units for different sectors."

Glaubke says that in the past each individual brand would make its own approach to a job, rather than all brands being presented as a whole. "There was no efficiency or integration into how products were sold into a project," he comments. "Then we started thinking about a unified Harman solution, which has been a major shift over the last couple of years."

A more consolidated process has also been applied to product development and manufacturing, which Glaubke says was intended to speed up the launch of new products. "That hadn't been an efficient as it could have been," he observes. "We also wanted to improve the supply chain and bring that and manufacturing closer together, along with sales support."

In the case of AKG this procedure began last year, with announcements made in the local Austrian media. Manufacturing was moved out and while R&D remained in Vienna, plans were made for its ultimate relocation to the US. But, Glaubke emphasises, this does not mean AKG or other Harman brands will disappear: "We're not closing or shuttering them. We are investing in the brands and have taken out inefficiencies."

Glaubke confirms the intellectual property of AKG continues to lie with Harman, which will carry on promoting its subsidiary as a brand. "We will be moving forward with brand development and R&D, that isn't going to change," he says. "What has changed is that we will use the entire Harman International infrastructure for the design and supply chain of products, delivering the same or better quality." He adds that this reorganisation was "not a case of Samsung giving us orders".

It is not clear how many AKG staff were part of the 650 redundancies announced by Samsung, although that figure will be partly counterbalanced by new appointments across the brands. Glaubke also could not confirm if relocation packages had been offered to AKG staff in Vienna.

Austrian Audio has been formed around what is described as a "core team of engineers", which was involved in the design of all AKG professional products and a large proportion of consumer items. The new company is based at premises close to the most recent AKG building in Vienna and will target both the pro audio and consumer sectors. It is also intending to move into the B2B market by designing "a new generation of test and measurement devices" for other companies producing mics and headphones. An order has already been received from a "well-known manufacturer of consumer electronic products" for one of the test units under development

The main focus, however, is for Austrian Audio to design and manufacture its own mics and headphones, although the founders are vowing not to merely copy "the greatest hits". The launch of a first mic product is still said to be some time away but the intention is to incorporate "new and useful features", including Open Source capability.

Despite describing the microphone market as "glutted", Austrian Audio head of marketing Kent Iverson, who held a similar position at AKG between February 2013 and November 2014, confirms the aim is for the new company to produce a new microphone brand. He adds that any future mic products will have broadcast applications.

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