Whenever the topic is AN vs Kondo it is just stronger then me not to post the statement from Audio Asylum by
Hiroyasu KONDO.
- Posted by Hiroyasu Kondo on January 20, 2000 at 15:59:26:
Why not also post Peter's Defense? Part 1
Of Thieves, Liars & Magpies.
In response to Mr. Kondos posting of January 16, 2000,
Mr. Kondo and I worked together for nearly 20 years and during this time we both benefited enormously from each other skills, knowledge and understanding. I have learnt a lot from Kondo-san and I hope that in a quiet moment, he also appreciates my love of music, commitment to excellence and unyielding support. Our collaboration worked very well for many years, but as in many relationships, business or otherwise, the parties develop in different directions. I wanted to continue to pursue sound quality through further exploration of the single-ended output stage and all manners of transformer coupling.
Mr. Kondo felt in contrast and I believe still feels, as he showed a push-pull 2A3 amplifier at the London High-End Show in September 1999. Firstly, that the push-pull triode output stage can somehow be developed to marshal a return to superiority and secondly that transformers only belong in the output stage of power amplifiers. I always considered this an abandonment of our basic principles and since Kondo-san never presented me with any push-pull prototype that proved to be better than any of the SE amplifiers he made, so I have stuck to my views.
The financial crisis in South East Asia in late 1997 polarised these two divergent philosophies, which then became emotionally and commercially incompatible and Mr. Kondo decided to break off our collaboration and we parted our ways.
It is never easy to break up after so many years and especially when it also involves a high-profile brand, even more so in an industry infested with rumourmongers, hacks and carpet baggers.
After a brief legal argument,
Audio Note UK Ltd. retained the rights to the brand name registration and Mr. Kondo is now selling his amplifiers under the name Kondo. The reasons for ANUK retaining the brand name registration are as obvious as they are logical,
1.)The value in the name was created solely and exclusively by
Audio Note UK and my personal investment. Kondo-san took no part in the financial, strategic or commercial risks involved in building the brand name recognition.
2.)Registering a company under the name
Audio Note in Japan does not in itself give the rights to a brand, only the hard work and expense building it is what makes it known and worthwhile, emotional attachment alone accounts for little in the real world. Since the product strategy, investment and most of the concepts were formulated in the UK with Kondo-san co-operating willingly, happily going along for the ride, for as long as the annual rewards were always on the increase. There was no-one crying foul then.
3.)In the end equation is it really so surprising that the brand name stays with the investor, I would have thought that this was normal practice, just ask anyone with money to invest about this and they will tell you the same.
Therefore there is no question of “stealing" the brand name, intellectually, morally or otherwise so I think we should leave Rossini masterpiece out of the discussion, as attractive as the emotional connections may be.
Now to elaborate with a bit of history.
Since 1990 there were two
Audio Note companies, one of which developed and produced its own products under the name
Audio Note in the UK and which also specified and distributed
Audio Note Japan's products and the original company in Japan.
It is important to
note here that it was ANUK who decided which products from AN-J should be marketed outside Japan, and the voice you hear in products like the ONGAKU, GAKU-ON, KEGON and M10 is a mixture of Kondo-san’s and mine. The combination of these two voices is inseparable in these products and was decided upon by myself, and as a result, I often deemed many of Mr. Kondo's products not suitable for wider distribution, much to his considerable chagrin. A fact that undoubtedly contributed to his hostile behaviour during our negotiations in late 1997 and early 1998 and to building his deeply aggrieved attitude later.
The original agreement was that ANUK would develop the more commercial part of the
Audio Note product line (Levels Zero to Three). In addition, ANUK should develop a product range complimentary to the Japanese products, capable of displaying their qualities and also provide an overall development platform for improving the concept of music reproduction shared by Kondo-san and I at the time.
With an investment over 7 years of well over one million pounds, ANUK went ahead and largely fulfilled its obligations under the agreement (which incidentally ran out in 1995 without being renewed and might I add without much further discussion about brand name, strategy or new terms of contract).
As a small example, in early 1994 ANUK even paid to send an engineer to Japan to teach and train AN-J staff in quality control procedures, product consistency and layout (amongst other matters showing them how to get the power supply quiet enough to remove the feedback from the ONGAKU). Techniques and concepts that did not at the time exist in any measure at the AN-J factory, one of many such small investments that helped make the AN-J products more saleable.
From late 1993 I kept Kondo-san very busy building NEIRO, ONGAKU, GAKU-ON, M10 etc., but by mid-1997 the emerging financial crisis in South East Asia started dramatically slowing sales. So for the first time in our relationship Kondo-san and I had to face the fact that sales were plummeting and orders to Japan would have to be reduced immediately otherwise overstock would kill our joint cash flow very quickly (these products are expensive to build).
Kondo-san absolutely refused to face up to this fact and make the necessary adjustments to his overheads. So instead of dealing with the problem himself and seeking our cooperation to minimize the damage, Mr. Kondo pushed the entire responsibility onto ANUKs shoulders by demanding that we "fulfil our obligation. This was in his view that we should buy a minimum of what he could produce to keep staff and turnover regardless of whether we could sell it or not, in other words, ANUK owed him a living regardless of market conditions.
This I in turn refused to do, so stalemate ensued.