UPDATE 2-Bang & Olufsen Q1 sales stall as consumers shun luxury
* Q1 pretax loss 64 mln DKK, vs forecast 25.7 mln loss
* Revenue flat at 600 mln DKK
* Keeps full-year outlook unchanged
* Shares down 4.4 percent (Adds detail, background, quotes)
COPENHAGEN, Oct 10 (Reuters) - Danish electronics maker Bang & Olufsen reported flat quarterly revenue after strong sales of lower-priced products were outweighed by a steep decline at its top-end audio-visual unit.
Sales of its cheaper B&O PLAY range, launched at the start of the year to win new and younger customers, rose 92 percent, the company said on Wednesday.
B&O's audio-visual unit, whose 103-inch BeoVision4 TV costs about 100,000 euros ($129,000), saw revenue slide 20 percent.
The business contributes over half of group revenue and also outweighed a 37 percent rise in its automotive business which makes sound systems for luxury cars such as Aston Martin, Audi and Mercedes.
"The crisis in Europe is also hitting Bang & Olufsen, no doubt," said Alm Brand analyst Michael Jorgensen. "They are feeling the lack of consumer willingness to spend."
The quarter was also dented by an absence of new product launches, the company said.
Chief executive Tue Mantoni stood by B&O's outlook for double-digit sales growth in its 2012/13 year and an improved operating margin, pinning hopes on B&O PLAY product launches in October. "It is expected that these two products will drive significant revenue in the second quarter."
The group's pretax loss doubled to 64 million Danish crowns ($11 million) in the June-August period - its first quarter - compared with a forecast for a 25.7 million loss forecast in a Reuters poll. Sales were flat at 600 million crowns, also missing forecasts.
B&O shares were down 4.4 percent by 0935 GMT, lagging a 0.7 percent fall in the local mid-cap index.
"Overall, it is quite bad compared to what was expected," Sydbank analyst Nicolaj Jeppesen said. "Most of it comes from capacity costs which are quite a bit higher than forecast."
Costs related to product development and marketing rose 18 percent to 306 million crowns and were heavily affected by the launch of B&O PLAY, Jeppesen said.
Slowing growth in Asia's luxury markets has put a question mark on the timing of B&O's ambition of moving into the region.
Mantoni has said B&O wanted China to account for 20-30 percent of revenue within 2-3 years, compared with around 3 percent currently.
"Bang & Olufsen has to have a presence there, but the timing is another issue," Jorgensen said. ($1 = 0.7754 euros) (Additional reporting by Mia Shanley and Teis Jensen; Editing by David Cowell and Dan Lalor) (email@example.com; +4533969649; Reuters Messaging: firstname.lastname@example.org)