Bang & Olufsen's Dapper Digital Player

As audio and video collections increasingly are transformed into a series of electronic digital signals, consumer electronics companies have struggled to convince consumers they should pay a premium for products that competitors might sell for hundreds of dollars less. One solution: Distinguish through design.

Danish company Bang & Olufsen (BOb.CO) has used the strategy to cater to well-heeled consumers for decades, and the stylish BeoSound 5 digital media server is no exception. In the face of a precipitous decline in purchases of high-end consumer goods around the world, the BeoSound 5's main system sells for $5,900, with a pair of accompanying BeoLab 9 floor-standing speakers adding another $10,000 to the bill.

Bang & Olufsen is hoping the BeoSound 5's unique good looks will have you reaching for your credit card without asking the price. The 6-lb. control pad goes with a "less is more" approach and looks like a console you'd see on the bridge of Star Trek's Enterprise. It sports a 10.4-in.-by-7.5-in. glossy black glass screen (1,024-by-768 resolution) flanked on the right by an aluminum cylinder that handles navigation and control. The control pad can sit on a heavy base or stand, or be attached directly to a wall.

The controller connects via a cable on its underside to the BeoMaster 5, a separate unit that acts as the brains of the system. It's the BeoMaster 5 that houses a 500GB hard drive, which holds and serves up digital music files and CD covers to an LCD screen on the controller. It includes an Ethernet jack or Wi-Fi 802.11g to access 8,000 preloaded Internet radio stations (customized at installation). On the back, there are connections for BeoLab speakers and a S/PDIF digital audio output to connect to an external amplifier and speaker system.

But because the system is divided into two units and connected by wires, Bang & Olufsen's claims of minimalism fall short. Unless you plan to open walls, there's an ungainly amount of speaker and connector wires that no amount of design can completely hide away. Other music systems such as Sonos wirelessly connect to amplifier boxes that can be tucked out of view.

Like Flipping Through Your Old Records Though the BeoSound 5 is billed as a media server capable of storing digital photos and some video formats for serving up to a Bang & Olufsen television, it's mainly a digital music jukebox that runs on a Windows XP-embedded operating system. It does come with software to load and organize CDs from either PCs or Macs, though Bang & Olufsen executives say they expect the vast majority of customers to have an outside company rip and transfer music collections to the device. There are multiple encoding choices for storing music in MP3 format, but the company recommends using the WMA lossless format, which does not remove any of the digital bits and bytes used in music compression. That offers storage for about 1,200 CDs, or 20,000 tracks.

Once the system is set up, navigation is simple and intuitive. Its designers call the BeoSound a marriage of the physical and digital, offering users a way to flip through CD covers using the control wheel on the right, much like you would a crate full of vinyl albums. Left and right arrows step the user forward or back to a new track, while a "Go" button initiates a command.

Strangely, there's no button on the control pad to pause music. That requires a remote, sold separately for about $400. And the power button is hidden away so effectively on the left edge that it's hard to find easily and quickly.

Below the control wheel is a lever that acts as a laser pointer to navigate through the various screens that manage the system. With the big glass screen, you might expect the company to have chosen the touchscreen format popularized by Apple's (AAPL) iPhone. But engineers instead opted for the wheel-and-lever system to evoke the idea of flipping through an old record collection. Then, too, the relatively large size would have added to the bill of materials. The resulting interface is not complicated, though you'll need a light touch to avoid flipping too rapidly through the choices.

Eye-Candy Risk One of the biggest technological selling points of the system is MOTS, short for More Of The Same. This is an algorithm that examines what's playing and creates an on-the-fly playlist of similar music. MOTS analyzes parameters such as sound, timbre, rhythm, and other acoustic attributes to select similar tracks. It can definitely create some quirky set lists. Music that came preloaded on my test system careened from '80s alternative music like Depeche Mode to a pop hit from Toni Basil to a hard rock tune that had me racing to forward to the next track. Doubtless the system works better when loaded with a personal collection.

In the end, though, the Bang & Olufsen system is just a piece of eye candy unless you encode music in the higher bit-rate lossless or WAV formats. This blends the high and low frequencies into a crystal-clear sound mix that can help users rediscover music the way it was meant to sound. The problem is that if you're transferring music that's already been ripped to your computer's hard drive, it's less likely to have been encoded in lossless because of the huge amount of space each track takes up.

Bang & Olufsen hopes new products like the BeoSound 5 will jump-start sluggish growth. In August it reported a net loss of $72 million as the global downturn weakened demand for its products. It also announced the closure of 64 dealer stores worldwide.

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