Even as the global recession continues to claim one business casualty after another, the reluctance of audiophiles to give up their quest for pristine sound quality seems to be cushioning the fall of the luxury hi-fi market.

When businessman Andre Chew tried to buy a Krell FBI amplifier that retails at a five-figure sum, for example, he was told by the store that it was sold out and that he would have to wait for stocks to be replenished.

Of course, Ultralinear International - the official distributor of Krell hi-fi components - is just hedging its bets by keeping a lean inventory, but it also indicates that things have not come to a standstill on the sound front.

That means that even if customer traffic at audiophile mecca The Adelphi isn't what it used to be, you can forget about being able to get a good bargain. In fact, you might well run into a brick wall of low stocks and no apparent movement by retailers to sell more affordable products.

In Ultralinear's case, it sold two of its FBI units in as many weeks, which was why Mr Chew could not buy what he wanted. The company's president, Donald Wong, explains that his current strategy is to maintain a lean inventory to minimise liability should sales drop suddenly.

Despite achieving respectable sales, 'to say business has been affected is a drastic understatement', he says. 'I really don't expect things to improve for at least another six to eight months, especially since hi-fi isn't a must-have item.'

However, bucking the recessionary trend altogether is Clarity AV, which distributes brands such as Kaleidescape and Mark Levinson.

'Last year was better than 2007, and while we have realistic expectations this year, we still expect business to be healthy,' says its director, Ong Pang Soon.

'In fact, my strategy for this year is to advertise,' he says. 'When no one else is advertising, that's the time to stand out in the market. When people see a business advertising, even when times are bad, they'll remember that company,' he adds.

Beyond bravely ramping up advertising, he even plans to open a new Clarity AV store this year, which will inevitably mean higher overheads.

Underlying Clarity AV's moves is Mr Ong's belief in the financial resilience of his high-end customer demographic.

'Frankly, when someone with millions of dollars loses a bit of that, does it make much of a difference?' he asks. 'And when you're talking about buying a $100,000 sound system for a house they spent millions on, does it really hurt their pockets that much?'

There are other strategies besides advertising and opening stores to expand a hi-fi business.

Norman Audio is banking on product placement to attract new customers and build brand recognition. The local dealer for Sooloos music servers is setting up Sooloos units at events such as house parties to net ears and eyeballs that don't traditionally wander into The Adelphi.

'When people use the system and see how easy it is to operate the touchscreen, they will naturally want to find out more about it,' says Norman Audio director Ivan Cheng.

It helps when you have a product as immediately approachable as Sooloos, where everything is controlled from a large touch-sensitive screen much like a giant Apple iPhone.

Another of Mr Cheng's strategies is to focus on female customers, who often have veto power over a home hi-fi purchase.

'I've found that women love music as much as men but are less interested in specifications than the actual sound and user experience, so I show Sooloos to wives first, and once they start enjoying themselves, it makes the buying experience of husbands easier,' says Mr Cheng.

Beyond the traditional audiophile brands at The Adelphi, brands like Bang & Olufsen (B&O) and Bose play in the luxury lifestyle audio market, where customers are willing to pay for looks, sometimes at the slight expense of pure sound quality.

When you walk into a hotel or boardroom, the odds are you'll find B&O and Bose systems installed, and this kind of business-to-business (B2B) market has allowed players such as local B&O franchisee MJ Invest to depend less on walk-in customers.

'Our B2B segment is on par with last year, with many developers discovering that in a decreasing real estate market there is a growing demand for branded property, so I expect an increase in this business model for us,' says Jonas Moller, group director of MJ Invest.

He sees opportunity in today's adversity, and thinks the economy gives B&O scope to focus, in terms of offering the best high-end audio-visual products, and diversify through balancing its B2B and business-to-consumer (B2C) businesses.

Atlas Sound & Vision is the local dealer for Bose, as well as other brands such as ad notam and Loewe TVs, and while its B2C business remains its primary focus, its B2B business has been catching up slowly, says senior manager Sherwin Tien Siregar.

The St Regis Singapore brought Atlas in to install ad notam mirror LCD TVs and Bose sound systems in every room. 'A lot of our project business comes from referrals and also from interior designers and architects, as well as users themselves,' says Mr Siregar.

Of course, Mr Moller is the first to acknowledge the constraints of the economy. 'All luxury business will be affected in a recession, and we have more modest growth expectations for our business in 2009 compared to last year,' he admits. 'But having said that, we still see an increase in individuals in our target group moving into Singapore from the region.'

Fortunately, the forecasted economic gloom has yet to affect the existing projects of MJ Invest and Atlas.

'We haven't yet experienced cancellations but we expect a downgrade in some of the major projects we have pre-wired, such as retail bungalow projects,' says Mr Moller, adding that no one has actually downgraded yet.

Atlas hasn't suffered cancellations either, though Mr Siregar says he 'would not be surprised if there were some delays in construction projects'.

So if you've bought units at The Ritz Carlton Residences or The Hamilton Scotts Residences, which MJ Invest pre-wired, don't worry - those B&O sets will still be there.

In a hi-fi market where entry-level sound is so widely available, the resilience of the high-end sector baffles some consumers. When you can get music servers such as Sooloos which essentially act like single-purpose PCs organising and accessing your music collections, the obvious question is why not just rely on your current home PC or laptop and whatever speakers it came with?

The first trade-off is, of course, sound quality, and when sound systems are auditioned back to back, even self-declared tone-deaf listeners can discern obvious differences.

Diminishing returns will eventually kick in when you deal with the top-of-the-line hi-fi products, but if you're looking to upgrade from stock computer speakers or an ageing hi-fi combo from the 1990s, you will most certainly notice a night-and-day difference when you purchase even the cheapest models from a reputable audio brand.

There's also the temptation of new technology and products. MJ Invest doesn't depend just on sound quality convincing you, but sells the whole idea of integration into a suite of both B&O - and non-B&O - products. The idea is for a single remote to control everything in your house, not just your audio-visual products.

'Today we offer customised solutions that tie your StarHub cable TV boxes, Apple iPods and Apple TVs, satellite TV receivers, Blu-ray disc players and hard-drive storage right into a B&O TV, all controlled from a single remote,' says Mr Moller. 'That same remote also controls your home environment such as lighting controls, automated doors, drapes, air-conditioning and even motorised platforms to rotate your sofa sets.'

Clarity AV has also jumped on the integration bandwagon and offers complete bespoke setups for clients to suit their particular needs and budgets, whether it's something functional or whimsically extravagant.

'We're happy to work with our customers to create a solution tailored just for them,' says Mr Ong. 'Sometimes they'll be building a new house and want something that will tie every room together.'

Mr Ong is also talking with commercial buildings such as hotels to offer them building-wide high-end audio installation as an option to B&O and Bose.

Whether it's home-wide solutions or just music servers, the inevitable trend seems to be towards solutions that mimic computers and integrate into your lifestyle, versus traditional discrete audiophile components. But which paradigm survives the recession remains to be seen.

This article was first published in The Business Times on Jan 9, 2009.