FX trading
Established
I think that this is a subject that needs attention and comment, and I have therefore merged and expanded upon some comments of mine from another thread earlier today.
It should be noted that Leica are now owned by a Private Equity group, an arrangement that is not necessarily very stable in the current financial market turmoil (which unfortunately continues to get worse by the month). Unless the new management show exceptional skill and dexterity, we may not in fact be able to buy new analogue M's and a la cartes (or any other German models) for very much longer- a very sad prospect, so let's try to see what can be done
Interestingly, it seems that one of the main reasons for Leica's projected forthcoming move to Wetzlar is the need to expand lens production. Perhaps if (when) they are sold they will continue R+D and high-end optics manufacture at Wetzlar, with the bulk of production transferred to a convenient Asian location. It would be surprising if M8 component production were also not transferred to Asia, with (assuming demand justifies) the possibility of final assembly in Europe. However, a careful analysis of current priorities would seem to indicate that their primary focus is on optics, which probably also show greater growth potential as well.
As far as analogue and special edition (including a la carte) cameras are concerned, I would suggest that Leica spin out to their German managemnet and workforce most aspects of traditional camera manufacture, together with servicing and parts, as this would probably enable them to continue ticking over albeit in a reduced format. A good case could be made that this arrangement would maintain the premium aura surrounding the brand, with beneficial effects on the rest of the (Panasonic-made) product range. This would enable Panasonic (or eventual purchaser) to continue to expand production of electronic cameras and equipment and derive the benefits of the Leica brand positioning, while also safeguarding the traditional Leica customer base.
Such a move would also enable the optics range to be expanded, which would benefit everyone, and ensure that Panasonic (or eventual purchaser) were able to get a satisfactory return on their investment.
In spite of the digital brigade, I am certain that 35mm film-based photography demand will continue, in part due to the stabilty of the medium (any digital equipment and format is rapidly superseded), as well as it's convenience (no dependency on chargers, battery packs, laptops and long-term archival problems). The analog and custom-made side of the business will very effectively complement the digital business in the marketplace. As often is the case, the cachet of the premium brand will colour perceptions of the volume products, where the money is made in any case.
Let's try to assist Leica with our comments so that we can continue to enjoy their products and support.
It should be noted that Leica are now owned by a Private Equity group, an arrangement that is not necessarily very stable in the current financial market turmoil (which unfortunately continues to get worse by the month). Unless the new management show exceptional skill and dexterity, we may not in fact be able to buy new analogue M's and a la cartes (or any other German models) for very much longer- a very sad prospect, so let's try to see what can be done
Interestingly, it seems that one of the main reasons for Leica's projected forthcoming move to Wetzlar is the need to expand lens production. Perhaps if (when) they are sold they will continue R+D and high-end optics manufacture at Wetzlar, with the bulk of production transferred to a convenient Asian location. It would be surprising if M8 component production were also not transferred to Asia, with (assuming demand justifies) the possibility of final assembly in Europe. However, a careful analysis of current priorities would seem to indicate that their primary focus is on optics, which probably also show greater growth potential as well.
As far as analogue and special edition (including a la carte) cameras are concerned, I would suggest that Leica spin out to their German managemnet and workforce most aspects of traditional camera manufacture, together with servicing and parts, as this would probably enable them to continue ticking over albeit in a reduced format. A good case could be made that this arrangement would maintain the premium aura surrounding the brand, with beneficial effects on the rest of the (Panasonic-made) product range. This would enable Panasonic (or eventual purchaser) to continue to expand production of electronic cameras and equipment and derive the benefits of the Leica brand positioning, while also safeguarding the traditional Leica customer base.
Such a move would also enable the optics range to be expanded, which would benefit everyone, and ensure that Panasonic (or eventual purchaser) were able to get a satisfactory return on their investment.
In spite of the digital brigade, I am certain that 35mm film-based photography demand will continue, in part due to the stabilty of the medium (any digital equipment and format is rapidly superseded), as well as it's convenience (no dependency on chargers, battery packs, laptops and long-term archival problems). The analog and custom-made side of the business will very effectively complement the digital business in the marketplace. As often is the case, the cachet of the premium brand will colour perceptions of the volume products, where the money is made in any case.
Let's try to assist Leica with our comments so that we can continue to enjoy their products and support.
hlockwood
Well-known
FX trading said:
Let me adopt the role of Devil's Advocate here.
What I've retained in the quote above is crucial to your argument and would be what an outside investor would want proven, through market studies, before jumping in with cash.
The drumbeat of "film is dead" remains strong among many in the photography community. (And, no, I don't own a digital camera.) These are some of the same people that potential investors would interview as part of their due diligence.
Among the general population, especially the young, many hardly know of the existence of film. As for the "convenience" of film and freedom from computers, etc., what is the typical workflow of getting from film to print that most of us sweat through? Hardly as convenient as it is for digital. Yes, we love it; we enjoy the challenge and the rewards - investor rolls eyes.
The business model for maximizing profit would seem to put film photography in a niche category. This is a dangerous place to be - even if it is profitable - because it can be viewed as a management distraction that might reduce profitability in other business units of the organization.
And how stable is this niche market? Look at the price trend of M bodies. It continues to rise, as though there exists an inelastic demand. Isn't the churn really in the "used" market? What is Leica's unit-sales history for film cameras? Those trend lines would be very important to a potential investor.
I have to stop here; I'm getting depressed.
Harry
Roger Hicks
Veteran
Threads such as this always amuse me.
I've been involved in this business for some decades. I've met quite a lot of big players, and even one or two of their bankers.
Every now and then, they ask for advice from people who know or can research the market. Usually these are people with access to hard numbers, not idle speculation. They are often quite well paid for their analyses.
What makes anyone think that any manufacturer will pay much attention to internet chatter?
Talking among ourselves, about photography and cameras, is one thing. Giving advice to Leica (or any other manufacturer) is quite another.
I would not presume to do it unless asked. Although Leica listens politely to what I say, they have never asked me for advice. Others have. The latter is no boast: just an observation on the value that anyone places upon unsolicited advice.
Cheers,
Roger
I've been involved in this business for some decades. I've met quite a lot of big players, and even one or two of their bankers.
Every now and then, they ask for advice from people who know or can research the market. Usually these are people with access to hard numbers, not idle speculation. They are often quite well paid for their analyses.
What makes anyone think that any manufacturer will pay much attention to internet chatter?
Talking among ourselves, about photography and cameras, is one thing. Giving advice to Leica (or any other manufacturer) is quite another.
I would not presume to do it unless asked. Although Leica listens politely to what I say, they have never asked me for advice. Others have. The latter is no boast: just an observation on the value that anyone places upon unsolicited advice.
Cheers,
Roger
Last edited:
JoeV
Thin Air, Bright Sun
Well, Olivetti, up until very recently, was the only company manufacturing and marketing new manual typewriters; they've now been made in Asia, and from the reviews I've read, they are essentially overpriced desktop-sized paperweights; one would be better off with a 1930s vintage Underwood manual, reconditioned, then purchase one of these new.
This should sound very familiar to us fans of classic manual rangefinder film cameras.
I suspect we would see a similar dramatic decrease in build-quality of an Asian all-mechanical rangefinder camera; it would not bode well for Leica's future, nor the M-series' legacy, unless some drastically creative methods were employed to inject the sort of engineering, assembly and unit-by-unit quality assurance into the Asian manufacturing culture that we're used to seeing from Leica's Germany-based operation.
Perhaps that's been the Achille's Heel in Leica's philosophy: reliance on a highly skilled, specialized workforce for manual assembly of these intricate mechanisms, when they should have been pursuing precision automation in Asian 'foundries', to produce the equivalent quality product at a much reduced cost base. I'm thinking as an analogy how many high-end European watch brands have movements that are actually manufactured in Asia, and build quality seems no longer to be an issue. It really is just an engineering issue; bringing advanced automated assembly techniques to the manufacture of intricate, all-mechanical cameras.
~Joe
This should sound very familiar to us fans of classic manual rangefinder film cameras.
I suspect we would see a similar dramatic decrease in build-quality of an Asian all-mechanical rangefinder camera; it would not bode well for Leica's future, nor the M-series' legacy, unless some drastically creative methods were employed to inject the sort of engineering, assembly and unit-by-unit quality assurance into the Asian manufacturing culture that we're used to seeing from Leica's Germany-based operation.
Perhaps that's been the Achille's Heel in Leica's philosophy: reliance on a highly skilled, specialized workforce for manual assembly of these intricate mechanisms, when they should have been pursuing precision automation in Asian 'foundries', to produce the equivalent quality product at a much reduced cost base. I'm thinking as an analogy how many high-end European watch brands have movements that are actually manufactured in Asia, and build quality seems no longer to be an issue. It really is just an engineering issue; bringing advanced automated assembly techniques to the manufacture of intricate, all-mechanical cameras.
~Joe
Last edited:
FX trading
Established
Two brief points, and although they sound disparate they are actually similar. Yes, film s no longer what it was in terms of a market; however, it is an ideal high-end "artistic" product, which can continue to easily be used and purchased for top-of-the-range "creative" work (to a great degree, probably by the same type of market as traditional private Leica purchasers). Ditto for M (analogue) and a la carte cameras.
However, while the market for these is materially insignificant for any major manufacturer, they greatly assist in the brand devlopment and product placement of the mass-market, digital equipment, and hence are well worth nurturing even if no serious profit is made directly.
Similar in a way to the couture collections (actually, generally loss-making) subsidized by the fashion industry due to their trickle-down impact on the (highly proftable) mass-market eponymous brands.
However, while the market for these is materially insignificant for any major manufacturer, they greatly assist in the brand devlopment and product placement of the mass-market, digital equipment, and hence are well worth nurturing even if no serious profit is made directly.
Similar in a way to the couture collections (actually, generally loss-making) subsidized by the fashion industry due to their trickle-down impact on the (highly proftable) mass-market eponymous brands.
Turtle
Veteran
JoeV said:
Precisely. Now enter Zeiss/Cosina/CV.
I have a number of friends with exceedingly expensive watches and the Rolexes in particular keep very poor time, which ultimtely is the purpose of a watch. I love my M bodies, but my ZM lenses are every bit as good a their Leica counterparts. The astounding increase in Leica a la carte prices have ensured that I never cease to be amazed by their pricing whilst the apparent performance (at least if you believe wat Putz aludes to in his part 1 test) of the new Summarits suggests that at half the price, performance is comparable, albeit for a loss of speed....however, the Summarit 90 2.5 seems to be appreciably better than the Elmarit-M 2.8 despite being far cheaper (or did I get that wrong?). Go figure. What some said could not be done, quite simply has been by Zeiss and now leica. That they did not do so before remains somewhat of a mystery. I do love the fact that the Ms are hand made, but my tolerance /need/desire/give a toss only goes so far up the price scale. If only Zeiss had produced a more conventional 75-90 made in Japan and priced accordingly. Whats the bet that with these new 'budget' Elmarits they will do just that and come in with a f2.5/2.9 competitor. Bring it on!!
sepiareverb
genius and moron
Perhaps the new owners aren't so concerned with outcompeting everyone and more concerned with making top quality cameras and lenses. Now that would be a refreshing change.
How many things are still handmade these days besides those xmas ornaments we get from our kids and grandkids in grade school?
How many things are still handmade these days besides those xmas ornaments we get from our kids and grandkids in grade school?
Tuolumne
Veteran
sepiareverb said:
Hand made almost always means "inferior quality" these days. Ever try to achieve six sigma quality with any mass produced hand made item? Can't be done, too many uncontrollable variables. That's why everyone is always complaining about something or other on their new Leicas. Automation is always BETTER for quality control, although many people don't like to hear that. "Hand made" sounds so much better.
/t
ClaremontPhoto
Jon Claremont
Could Leica start buying in their older cameras, service them, and let them trickle back on sale?
Tuolumne
Veteran
ClaremontPhoto said:
I thought I read somewhere that Mr. Kaufmann was planning on doing just that. He said that 20% of the Leica market was for used equipment.
/T
ClaremontPhoto
Jon Claremont
Tuolumne said:
Didn't Nissan buy some of their old 350Z's and reissue them as new for a small fortune each?
waileong
Well-known
!
!
I disagree. If they were listed, they would have to meet quarterly analyst calls, which would be far more distracting. The advantage of private equity ownership is that management can focus on long-term issues.
!
FX trading said:
I disagree. If they were listed, they would have to meet quarterly analyst calls, which would be far more distracting. The advantage of private equity ownership is that management can focus on long-term issues.
Roger Hicks
Veteran
Absolutely. Everyone at Leica agrees that going public was the worst thing that ever happened to the company: their biggest mistake.waileong said:
Cheers,
R.
Damaso
Photojournalist
Having interviewed both the CEO and new owner of Leica it seems to me that both men are dedicated to preserving the brand and what it means. They have both said that they will continue to make film cameras as long as there is a demand for them and they can make money at it, which seems like it makes sense to me, after all they are not a charity case.
Taking with Dr. Kaufman, the new owner, he is committed to the long term approach, even at the expense of short term profits, something a publically held company can't do. THe move to Wetzler is designed to expand production and to make it more effecient. He dropped some hints that there will be some new M lens offerings which will be cheaper but still with the same high quality. I think the Leica chiefs understand that they must keep the quality in order to retain the loyality of people willing to pay top dollar. I think the company is in good hands but as always, we shall see...
Taking with Dr. Kaufman, the new owner, he is committed to the long term approach, even at the expense of short term profits, something a publically held company can't do. THe move to Wetzler is designed to expand production and to make it more effecient. He dropped some hints that there will be some new M lens offerings which will be cheaper but still with the same high quality. I think the Leica chiefs understand that they must keep the quality in order to retain the loyality of people willing to pay top dollar. I think the company is in good hands but as always, we shall see...
Roger Hicks
Veteran
Damaso said:
Damaso said:
Damaso
Photojournalist
The Summarits are a test run for sure but could you imagine a cheaper version of the 75mm Summilux with the same or higher quality? Could be in the offing...
cmedin
Well-known
ClaremontPhoto said:
Pretty sure they were 2-series (240s most likely).
Austerby
Well-known
Isn't there a comparison with top-end hi-fi where companies such as Linn continue to sell the Sondek LP12 turntable alongside a fully modern range of digital systems? They emphasise that their products are "handbuilt and precision engineered in Scotland" though I wouldn't be surprised if they contain components sourced elsewhere. They are just a number of similarly thriving, independent companies across Europe and America making top-end hi-fi and a lot of their products go for a lot more than the GBP3000 of the M8. My local dealer told me he sold half-a-dozen of their then new GBP12000 CD players within as many weeks.
FX trading
Established
It should be remembered that Leica were acquired with the objective of maximizing their value and long term profitability. Volumes have to be increased in order to generate suitable returns, and, regretably, this cannot be done by building a business whose sole scope is selling high-end, hand-built equipment.
The market (monetary) value of the brand has to reside in it's cachet and the possibility of using this to command a premium price on digital and other more popular (in terms of volume) products.
A pleasant side-benefit of all this is that the high-end products are effectively subsidized by their mass-market cousins, thereby ensuring their on-going development and long-term viability.
The market (monetary) value of the brand has to reside in it's cachet and the possibility of using this to command a premium price on digital and other more popular (in terms of volume) products.
A pleasant side-benefit of all this is that the high-end products are effectively subsidized by their mass-market cousins, thereby ensuring their on-going development and long-term viability.
Matthew Runkel
Well-known
Of course you can make the same profit on low volumes of high-margin goods as on large volumes of low-margin goods. And many luxury brands have been destroyed by attempts to leverage the brand by exploiting mass-market opportunities, because the cachet doesn't exist in the abstract but only in association with the underlying quality, scarcity or other value proposition. You don't see LVMH pursuing the strategy you suggest, because it could destroy the market positions of their luxury brands over the long term.