October 29, 2008 2:00 am

Out with a Bang

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People flush with cash and with an eye for design have spent voraciously on loudspeakers, televisions and mobile phones from Danish audio and video company Bang & Olufsen in recent years.

But in a sign that €800 ($1,022) mobile phones and €1,250 DVD recorders are no longer must-have items, the company last week said it would stop making phones, DVD players and recorders and instead stick to "core products" such as sound systems and televisions.

Gartner telecoms analyst Carolina Milanesi says: "What Bang & Olufsen was trying to do with their devices was not fitting the current environment ... people are looking to spend less, not more, on phones."

Bang & Olufsen's chief executive Karl Kristian Hvidt Nielsen says the collapse in the property market has hurt sales because people no longer have as much money to spend on the company's audio and video equipment, which costs an average of €7,000-€8,000 - and as much as €20,000. Sales of all products have been falling, he says: "It's a pretty broad spread."

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