Pianos used to occupy a position of honor in nearly half of America's living rooms until the 1930s, but have gradually been replaced, first by radios and then by television sets. But Steinway continues to turn out only 3,000 instruments a year at its factory in New York's borough of Queens, about the same production rate as a century ago.

Steinway advertises itself as "The Standard of Excellence," which is no exaggeration considering that its product is still handcrafted and all other American pianos -- including

Steinway's own less expensive Boston Piano -- are mass-produced in the quantity of about 100,000 a year. Since its founding in 1853, Steinway & Sons has produced only 563,000 instruments bearing the name Steinway in gold letters.

Steinway had competition for most of its first century from several great German instrument makers such as Bechstein and Bluthner, which also are celebrating their sesquicentennials this year. But they can no longer be considered rivals, since 98 percent of the world's pre-eminent concert pianists play exclusively on Steinways at last count.

Four generations of the Steinway family have been connected with the firm, but now only one, Henry Z. Steinway, a great-grandson of the founder, is still active as an ambassador-at-large for the firm. He was president of Steinway & Sons when it was sold to CBS in 1972 and chairman of the board when he formally retired in 1980 to spend most of his time at Steinway's elegant Manhattan sales rooms.

The firm has been sold twice since, mostly recently to Selmer Industries, a maker of band instruments that has changed its name to Steinway Musical Instruments. The company has gone public and shares are listed under the stock symbol LVB, which stands appropriately enough for Ludwig van Beethoven, because all possible stock listings starting with ST had been taken.

"My great-grandfather, Henry Steinway, revolutionized the construction of the piano," said Steinway, a debonair 87-year-old who autographs pianos for buyers who want their instruments personalized. "It gives me great pleasure to know that thousands of musicians and music appreciators around the world take delight in playing and hearing the unique sound of Steinway, built in much the same way as they were a century ago."

The original Henry was born Heinrich Engelhard Steinweg, a German who was a boy bugler at the Battle of Waterloo. He began his professional career as a pipe-organ builder but switched to pianos and won his first prize for an instrument in 1839. The first piano he ever built in 1836, dubbed the "kitchen piano" because it was made in the Steinway kitchen, is on exhibit at Steinway's New York factory.

Steinweg emigrated to New York in 1850 and anglicized his name to Steinway. He worked for Beacon & Raven, whose instruments were made popular by composer-pianists Stephen Foster and Louis Moreau Gottschalk. The infant piano industry was thriving, employing 1,900 workers nationally and turning out 9,000 pianos annually, and Henry Steinway soon went into his own business with his sons, building the rectangular piano popular in the early Victorian era at a factory in midtown Manhattan.

The business was so successful that in the 1870s the Steinways built a showroom and concert hall on 14th Street that was for many years the city's most eminent stage for performance of classical music. The Steinways moved their factory in 1872 to 400 acres in the city's borough of Queens where they built a foundry to make cast-iron piano parts and a lumber mill for manufacture of the rims and sounding boards of their new best-seller, the grand piano measuring up to nine feet long.

In the 1890s, the factory site in Queens' Astoria neighborhood was developed into Steinway Village with housing for employees, a post office, and parks. In 1925 a new piano showroom and concert hall was opened on Manhattan's East 57th Street as near to Carnegie Hall as the Steinways could get.

Henry Steinway Jr. was awarded a patent for a grand piano in 1857, and C. H. Theodor Steinway, Henry's eldest son, held more than 40 patents for his piano innovations.

He defined the Steinway piano's architecture and patented the unique method of bending 17 layers of wood by means of a giant vise into the curved shape of a grand piano case. Inside the case are fitted a 340-pound cast iron plate and a soundboard pressed into the shape of a dome.

Each serially numbered Steinway piano contains some 12,000 parts, and the skills of 300 craftsmen go into its assemblage. Because they are handcrafted, each piano has a unique sound that either appeals or doesn't appeal to pianists, who become obsessively attached to instruments they prefer and have them shipped all over the world for concert engagements.

Although most people think of a Steinway as a plain but handsome black-lacquered instrument, fancy art cases have been made by special order since 1857.

Piano No. 300,000 with gilded eagles for legs was installed in the East Room of the White House in 1938. It replaced No. 100,000, which was presented to the American people on the occasion of Steinway's 50th anniversary and is now on display at the Smithsonian Institution. For the 150th anniversary this year, fashion designer Karl Lagerfeld has created a limited birthday edition grand piano.

The purchase price of a Steinway grand will set the buyer back as much as a luxury automobile (in the $90,000 range), but may be a better investment since Steinways often increase in value. The record price ever paid for a used Steinway at auction was $1.2 million in New York in 1997. The piano case had been decorated by the famous English artist, Sir Lawrence Alma-Tadema, at the turn of the last century.