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Posted By: Ken Iisaka Steinway rumors? - 02/21/20 12:57 AM
I have heard interesting rumors in recent weeks from multiple sources:

1. Steinway is consolidating and slowing down production of its smallest models. Given that its smallest models are only within inches of each other, that it makes no sense to have four small models: S, M, O and A. One claimed that S, M and O are being discontinued. Another said that S and O are being discontinued.
2. Steinway may be stopping production of upright pianos in the US altogether.
3. Rim construction of the smallest models is being outsourced to Kawai.

I find 1 and 2 plausible, but 3 to be rather far-fetched.
Posted By: pianoloverus Re: Steinway rumors? - 02/21/20 01:03 AM
Since Steinway already has the machinery etc. to make all these models, what would be the advantage of reducing the number of models?

Don't many major manufacturers have at least three models in the 5'1" to 6'2" range?
Posted By: WeakLeftHand Re: Steinway rumors? - 02/21/20 01:06 AM
I heard #2 from the local Steinway Gallery several months ago when I was shopping for a piano. I was inquiring about their K52. He said the one in the store was the last one in Canada. Steinway US was not making anymore.
Posted By: j&j Re: Steinway rumors? - 02/21/20 01:56 AM
Originally Posted by pianoloverus
Since Steinway already has the machinery etc. to make all these models, what would be the advantage of reducing the number of models?

Don't many major manufacturers have at least three models in the 5'1" to 6'2" range?


I agree. I thought that Steinway & Sons considered themselves to be the master builders of smaller grands between the 5’1” to 6’2” range? I don’t know of course, but I would think those smaller size pianos are their biggest and most profitable selling pianos. Seems strange to me.
Posted By: Ed Foote Re: Steinway rumors? - 02/21/20 02:07 AM
Greetings,
The model S was introduced in the 1930"s to keep sales up. It isn't a great piano, in that the shorter strings define the sound, (actions are the same in all their smaller pianos) The depression was on , and people were living in smaller places and it was easier to sell small pianos.. Today, with the flood of pianos out there in the market, I would think a premium brand would concentrate on the semi-pro, or wealthy-status, markets to sell their bigger pianos. Higher profits, I would imagine.
Regards,
Posted By: Furtwangler Re: Steinway rumors? - 02/21/20 02:25 AM
Last August I was told by a very reputable source in the industry some things about Steinway that, should they be true, will amplify what you have heard and go way beyond.

Once again, these are rumors. If they are true however, it will be the most dramatic development in the piano industry in decades.

Stay tuned.
Posted By: P W Grey Re: Steinway rumors? - 02/21/20 03:13 AM
"Buy the rumor...sell the fact".

Remember that the current owner of SS is/was a hedge fund manager.

Just sayin...!

Pwg
Posted By: Lady Bird Re: Steinway rumors? - 02/21/20 06:01 AM
Originally Posted by WeakLeftHand
I heard #2 from the local Steinway Gallery several months ago when I was shopping for a piano. I was inquiring about their K52. He said the one in the store was the last one in Canada. Steinway US was not making anymore.

It not the last one in Canada. (just rumour ) Tom Lee has at least two in the stores ,perhaps more in the warehouse.
There is also one 46" (1098 ?), new piano ,the action and tone was not impressive.
The K52 at least sounded and responded like performance grade piano.(very nice)
This one stood next to my piano in the dealer.(both were 130 size pianos with
sostenuto pedal )
It is still there.It has been the same place since 2017.I bought my piano in 2018.
For some reason I always thought a Steinways M one of thier best selling pianos ?
Posted By: Lady Bird Re: Steinway rumors? - 02/21/20 06:17 AM
Trust Kawai to be making parts if not pianos for Steinways (Yes I know my imagination is running away) .They made pianos for Scheidmayor before that manufacturer ceased making pianos.Of course they make Boston pianos.
I was looking at a tall Boston a few weeks ago and I am sure they have the same cabinet
as the K52 ?
Perhaps it is all rumour ! I sincerely hope so ., like so many here I do admire thier pianos .
Posted By: Lady Bird Re: Steinway rumors? - 02/21/20 06:31 AM
Actually looking at the website the cabinet for the Boston and K52 are not
exactly the same.They are just similar in style.So no ,everyone I was wrong
not the same !
Posted By: Dave Ferris Re: Steinway rumors? - 02/21/20 07:01 AM
I'd love to see a re-birth of a NY Steinway C ! That way when I win some dough in the lottery, I won't have to venture outside the borders of Ca., renew my passport , plus sit on a plane for 14 hours one way. grin thumb
Posted By: j&j Re: Steinway rumors? - 02/21/20 01:19 PM
As a complete amateur who’s quite happy with my piano, I am mildly interested in what happens with Steinway pianos as a conversational topic but fortunately or unfortunately maybe does not have any affect on my piano experience. I’ll just watch and wonder as I have been doing the last 30 years.
Posted By: Lady Bird Re: Steinway rumors? - 02/21/20 05:18 PM
Since they own Renner and the there is a big dealer here Vancouver I find it interesting.
Looking at the dealer website the older K52 upright has a beautiful cabinet.
The new K52 (looks like it just arrived) is very different looking not anywhere as nice.
A different cabinet.
Like WeakLeftHand of course I am interested especially since I considered
this upright.
Posted By: Piano*Dad Re: Steinway rumors? - 02/21/20 05:45 PM
Originally Posted by j&j
Originally Posted by pianoloverus
Since Steinway already has the machinery etc. to make all these models, what would be the advantage of reducing the number of models?

Don't many major manufacturers have at least three models in the 5'1" to 6'2" range?


I agree. I thought that Steinway & Sons considered themselves to be the master builders of smaller grands between the 5’1” to 6’2” range? I don’t know of course, but I would think those smaller size pianos are their biggest and most profitable selling pianos. Seems strange to me.


My guess is that the larger models are more profitable. The increment in materials and labor to produce a B is small relative to the price jump.
Posted By: Ken Iisaka Re: Steinway rumors? - 02/21/20 06:16 PM
I recall that, when the model S was introduced during the Great Depression, it was created as a less expensive model to sell, even it cost just as much as the larger model M to produce. The company got some concessions from the union, and got the model S to be produced by workers with less experience thus lower wages to remain afloat.
Posted By: Piano*Dad Re: Steinway rumors? - 02/21/20 06:30 PM
Don't get me wrong. I'm claiming that the margin is larger on a B than on an M or an S. But sales volume on the S & M (pun intended) may be higher. And high enough to justify having the lines. Steinway has a lot of relatively fixed costs, and you need volume to recoup those costs.
Posted By: Ken Iisaka Re: Steinway rumors? - 02/21/20 08:43 PM
The value of the land at the factory is worth a lot. Developing that land will give them a much higher RoE.
Posted By: Furtwangler Re: Steinway rumors? - 02/21/20 08:50 PM
Originally Posted by Ken Iisaka
The value of the land at the factory is worth a lot. Developing that land will give them a much higher RoE.



It totals 11 acres.

Last summer it was reported that Paulson was selling half of the acreage to Robert De Niro for $73MM

Stay tuned.
Posted By: j&j Re: Steinway rumors? - 02/21/20 09:24 PM
Originally Posted by Furtwangler
Originally Posted by Ken Iisaka
The value of the land at the factory is worth a lot. Developing that land will give them a much higher RoE.



It totals 11 acres.

Last summer it was reported that Paulson was selling half of the acreage to Robert De Niro for $73MM

Stay tuned.


Ewwwwh! I hate Robert De Niro.”
Posted By: Carey Re: Steinway rumors? - 02/21/20 09:27 PM
Originally Posted by Ken Iisaka
I recall that, when the model S was introduced during the Great Depression, it was created as a less expensive model to sell, even it cost just as much as the larger model M to produce. The company got some concessions from the union, and got the model S to be produced by workers with less experience thus lower wages to remain afloat.
The lower paid, less experienced workers info is a new one to me. Hopefully that arrangement ended when Steinway started producing pianos again after WWII. smile .
Posted By: Furtwangler Re: Steinway rumors? - 02/22/20 12:28 AM
Originally Posted by j&j
Originally Posted by Furtwangler
Originally Posted by Ken Iisaka
The value of the land at the factory is worth a lot. Developing that land will give them a much higher RoE.



It totals 11 acres.

Last summer it was reported that Paulson was selling half of the acreage to Robert De Niro for $73MM

Stay tuned.


Ewwwwh! I hate Robert De Niro.”



I knew there was a reason that I like you!!
Posted By: LarryK Re: Steinway rumors? - 02/22/20 01:04 AM
Originally Posted by j&j
Originally Posted by Furtwangler
Originally Posted by Ken Iisaka
The value of the land at the factory is worth a lot. Developing that land will give them a much higher RoE.



It totals 11 acres.

Last summer it was reported that Paulson was selling half of the acreage to Robert De Niro for $73MM

Stay tuned.


Ewwwwh! I hate Robert De Niro.”


How is that possible? Robert De Niro is one of the greatest actors of our time.

Posted By: Tgrshrk99 Re: Steinway rumors? - 02/22/20 03:00 AM
Never equate someone who is good at their job with necessarily being a good person.
Posted By: dng Re: Steinway rumors? - 02/22/20 06:40 AM
Recently a Steinway dealer suggested the most pianos sold are M’s, A’s and B’s, and suggested perhaps S, and O’s may not be as frequently made.
Posted By: Joseph Fleetwood Re: Steinway rumors? - 02/22/20 02:36 PM
I suspect this is all rumour. Kawai making rims for Steinway? I doubt it.
Posted By: j&j Re: Steinway rumors? - 02/22/20 02:39 PM
Originally Posted by Tgrshrk99
Never equate someone who is good at their job with necessarily being a good person.


Exactly!!
Posted By: Carey Re: Steinway rumors? - 02/22/20 03:19 PM
Originally Posted by joe80
I suspect this is all rumour. Kawai making rims for Steinway? I doubt it.

I guess "Boston" pianos don't count. smile
Posted By: Joseph Fleetwood Re: Steinway rumors? - 02/22/20 11:13 PM
When Boston first came out, there were people saying for years "of course, now Kawai is making Steinway pianos", or more subtly "now Kawai is making pianos for Steinway". I think Pearl River make Essex pianos, and that led to people saying "now some Steinways are made in China"....

The truth was of course Kawai have been making Boston pianos for Steinway and Sons for almost 30 years, and Pearl River have been making Essex pianos for Steinway and Sons for about 12 or 15 years (whatever I can't remember the exact dates), but the Steinway piano is only made by the Steinway factories in Hamburg and New York. To be honest Steinways do enough to rub people up the wrong way (the whole decal and restoration saga for example) without these rumours being added to the mix.

I WILL be interested to see if they are just rumours or if there's a truth behind them. The rumour a few years back was that there would no longer be a New York and a Hamburg Steinway, and that both factories would produce exactly the same piano. Ron Losby said in the interview with Tiffany Poon that the New York would remain a New York and the Hamburg would remain a Hamburg, but they had streamlined some cosmetic things. Again there though, there have been at various points in time New York Steinways made with Hamburg parts, etc etc (not making this a New York vs Hamburg post, there's enough of them...)

I could see for instance, one of the factories dropping the M and the S, but the other one keeping them on. I could see Hamburg keeping the smaller grands on because of European demands, but again I'm only speculating. Certainly I've never quite understood why someone would pay the eyewatering prices demanded by the M and the S - it's not that much piano for the money.
Posted By: johnstaf Re: Steinway rumors? - 02/22/20 11:23 PM
Originally Posted by joe80
Certainly I've never quite understood why someone would pay the eyewatering prices demanded by the M and the S - it's not that much piano for the money.


I know, but a nice M is great fun! 😁
Posted By: j&j Re: Steinway rumors? - 02/22/20 11:43 PM
Originally Posted by johnstaf
Originally Posted by joe80
Certainly I've never quite understood why someone would pay the eyewatering prices demanded by the M and the S - it's not that much piano for the money.


I know, but a nice M is great fun! 😁


The only thing that l think would explain it is the M and S models still have the Steinway name and are small enough to fit in a small apartment in Manhattan.
Posted By: iObsessed Re: Steinway rumors? - 02/23/20 09:21 PM
It definitely makes sense to me for Steinway to discontinue 1 or 2 sizes. Streamlining/outsourcing the uprights and getting rid of the Steinway S is probably a good move. Uprights are just so low margin and not as good in perceived quality and prestige that it would make sense for Steinway to massively scale down to make room, factory-wise and personnel-wise, for more grands.
Posted By: pianoloverus Re: Steinway rumors? - 02/23/20 09:43 PM
Originally Posted by iObsessed
It definitely makes sense to me for Steinway to discontinue 1 or 2 sizes. Streamlining/outsourcing the uprights and getting rid of the Steinway S is probably a good move. Uprights are just so low margin and not as good in perceived quality and prestige that it would make sense for Steinway to massively scale down to make room, factory-wise and personnel-wise, for more grands.
But I think your argument about Steinway uprights, if true, could apply to any prestigious makers uprights. Yet they don't seem to be changing their upright production. I don't think Steinway needs more room for grand production since they used to make many more pianos in the same factory. The above doesn't mean I don't think there could be some other reason why it would make sense to change their upright production.
Posted By: johnstaf Re: Steinway rumors? - 02/23/20 09:53 PM
I wonder if Steinway uprights are selling. I hardly ever see Steinway even mentioned in discussions about the finest uprights money can buy. It's nearly always Blüthner, Bechstein, Bösendorfer, Steingraeber, Sauter etc.
Posted By: Lady Bird Re: Steinway rumors? - 02/23/20 11:34 PM
Originally Posted by iObsessed
It definitely makes sense to me for Steinway to discontinue 1 or 2 sizes. Streamlining/outsourcing the uprights and getting rid of the Steinway S is probably a good move. Uprights are just so low margin and not as good in perceived quality and prestige that it would make sense for Steinway to massively scale down to make room, factory-wise and personnel-wise, for more grands.

Yes well as long as they let everyone know.The price of those uprights and smaller grands are
extremely high.
Posted By: Retsacnal Re: Steinway rumors? - 02/25/20 12:07 AM
If I was Steinway™...

Assuming what I've heard -- that they are discounting and cutting production -- is true, here's what I'd do. I would respond to the dynamic in play by not only discontinuing S, M and O production in NYC, I'd drop the price of an A to about 80k (just a little more than the current M price). As Piano*Dad noted above, their marginal cost increase for the additional 13, 7 or 4 inches over the S, M and O respectively simply isn't that much.

This would likely rock the 6 foot (and under) market.

How would this impact Steinway? First of all, I suspect that it's largely price that determines which Steinway people buy, so if a buyer can get more piano for the same amount, they'll take it. Anyone who would have bought an M or O will probably be willing to buy an A for roughly the same price. Steinway would lose the marginal revenue associated with the sale of A's and O's at the current price, but if they are already discounting sales, then this is just a move in the same direction. Also, this loss would be offset to some extent by those who would have otherwise bought an S because it's the cheapest paying a little more for the A because it would now be the cheapest (and/or "worth" the difference in price). In other words, I don't think Steinway would lose many sales in terms of units.

Further, I think they'd pick up a sales from people shopping in the 6 foot and under space, because the A would sell to more people who would like a Steinway but are more price sensitive. For example, this would drop the A under a Yamaha CF4, and put it in shooting range of an S3X, just to name one competitor. Other makers would be forced to adjust their prices if they wanted to maintain their current price position relative to Steinway.

Any shopper considering a high-end six-foot piano would give the Steinway a much harder look than they might have otherwise. Steinway would probably not lose unit sales at all. It doesn't cost them much more to produce the A than they other models. And I think they'd pick up sales from competition. They'd save some on switching costs in the factory by avoiding switching between setups for the "extra" models (in truth, this is probably nominal, but could be the rationale for dropping the A price to something that approximates the "replaced" models).

For shoppers who are less price conscious and truly prefer an S or M for space reasons, the Hamburg models could be made available for their current prices.

Assuming that the least expensive models are the most popular, and that unit sales don't drop, then their gross revenue would hardly change. Assuming they pick up sales, then their gross revenue would increase.
Posted By: Retsacnal Re: Steinway rumors? - 02/25/20 07:30 PM
Originally Posted by Furtwangler
Originally Posted by Ken Iisaka
The value of the land at the factory is worth a lot. Developing that land will give them a much higher RoE.



It totals 11 acres.

Last summer it was reported that Paulson was selling half of the acreage to Robert De Niro for $73MM

Stay tuned.


I've commented on this before, but if you divide the company roughly into halves, NYC and Hamburg, then this sale underwrites almost half of the NYC side. Of course, those are very rough numbers, and there's the whole band instruments division, etc, so just selling half the property is a very significant thing in terms of the current ownership's ROI. I still think the property is ultimately too valuable to just sit on, especially since production is [likely] dropping, etc. They could move production, sell the rest and come out even further ahead. That's assuming that they want to maintain NY production. Hamburg seems to be where the action is, given the global market. Of course, they could also do some major restructuring in that regard, and serve markets differently too (e.g. US production going to China (or vice versa wink )). But the rest of the world seems to largely view Steinway as a German piano, at least in places where pianos are selling...
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