Roger Hicks said:
I'm just more inclined to believe that Leica knows slightly more about the market than I do. Or you do. If there were easy, sure-fire solutions, they'd have been adopted long ago.
Leica at least has more data about their current market, but it's even less clear to those of us outside of any company whether they really know their market. Understanding, defining, and even creating markets is a key function of a successful business. Many companies have lost their way due to losing "vision" regarding their market and/or their market shifting out from under them.
To illustrate, I'll pull an example from the computing industry of a company, Silicon Graphics (SGI), that utterly owned a high-end market but rapidly fell from that grace during the 1990's. In their heyday, SGI was the dominating force in high-end computer graphics, whether for scientific vizualization, movie-making, and more. Their products ranged from professional graphics workstations up to top supercomputers. Their technological prowess and uniqueness was such that they enjoyed margins unheard of by other computer makers.
Unfortunately, SGI failed to foresee how the rise of the personal computer would affect them. Their high-profit core market was about to be commoditized, eroded from the bottom up. Professional graphics cards began to be offered by competitors on cheap, widely available PC-based hardware. Early on, this wasn't much of a threat: PCs with even the best graphics cards still paled in comparison to SGI's lowliest system. Over time, some of the bright folks from SGI saw the writing on the wall, were unable to change company direction, and left to form NVidia (now a major player in their own right in current graphics hardware). SGI faded to a shadow of its former self, and is essentially no longer a major player in computing.
I consider the sentiment I've heard here and elsewhere that Leica should remain isolated as a "luxury" brand to be a risky mindset in light of examples like the above. It is exceedingly difficult to maintain a purely luxury-based status in a market which isn't commoditized. Digital photography's coming of age has caused a disruption in the status quo enjoyed during the past decades of film photography. This will bring vigorous competition to Leica's doorstep from multiple different directions. That could be the obvious competition in the form of a digital rangefinder, or even a substantial variation on traditional camera design (RF or SLR) enabled by new digital technologies. The digital point and shoot camera is already one such variation, achieving framing via the back panel LCD.