British article on Leica troubles

[richiedcruz]

I came across this article about the financial difficulties that Leica is going through. I found it much more informative than the press release that Leica has on their website. I particularly found it interesting, when part of the blame for Leica's troubles was assigned to users of vintage rangefinders. Shame on those of us who only have enough money for Minolta Hi-matics and Canonets. 😛

http://db.riskwaters.com/public/showPage.html?page=210196

Richie

 

[Oldprof]

Thanks for sharing the article Richie. When I started in photography as a high school student in the late 1950s I was on a very limited budget. Interchangeable lens Leicas, Contaxes, Nikons, and Canons were in my dreams, but I couldn't afford any of them. So I started with less expensive fixed lens rangefinders. And I got fine results with them ... so much so that I was never tempted to spring for a real Leica. When SLRs became so popular in the 1960s and 1970s Leica was left behind and the company has been in a long and slow decline ever since. Still, it is sad to see the sufferings of such a great and historic camera maker. In my view, all 35mm cameras are ultimately derived from Oskar Barnack's original Leica. His goal was to design "a small and portable camera capable of making big pictures." He succeeded and started the 35mm revolution in 20th century photography.

 

[RML]

So nnow those with small wallets are to blame as well for Leica's troubles? Maybe it really is crazy to want to spend 4000 ($$ or euros, you pick) on food, clothing, rent/mortgage, insurance, transportation, school fees, and an occassional holiday instead of on a single camera of German origin. Who are next? All users of SLRs or digital cameras? No, no, dear Leica. The problem lies fully with your outdated business model and your inability to respond swiftly, effectively and efficiently to changing markets. Leica deserves to go bust. Maybe that will ultimately be its salvation.

 

[StuartR]

RML -- expensive products abound, why should Leica be any different? Jewelery often costs way more than Leica gear, and it has no inherent functionality. The reason Leicas cost a lot of money is because a lot of man-hours go into designing, assembling, and testing them. They also use a lot of expensive components and are built in a country where the cost of labor is very high. I doubt that the mark up on Leica's (aside from special editions) is really any higher than any other camera manufacturer -- probably much lower than most mass produced cameras in fact. Their problems are their own, and they need to reorganize so that they can make the right number of products for the market, but I really hesitate to condemn them for making high quality products. They just need to figure out how to do it in a way that will keep them in the black. This will probably mean shrinking.

 

[einolu]

I somehow see panasonic taking leica under their wing if anything gets worse for the company. Nobody would let a brand name like that just die.

 

[RML]

Stuart, in the article buyers of second-hand Leicas are (partly) blamed for the trouble Leica is in now. That is what I resent. That they make an expensive product is fine by me, but that they blame me (as a recent buyer of a user M2) and others like me of their financial problems is too much to bear. It smacks of arrogance with a hint of stupidity. I've never hear Cartier complain of people buying second-hand Cartier watches and thus causing financial troubles for Cartier....

 

[kjoebek]

I do also think that the japanese would never let Leica die, because that Leica is so popular in Japan. But old Leica's are hot, if you got a old Leica your are a part of a brotherhood or something like that. Even many young japanese girls know that a Leica is.

In Japan a used M2 or M3 cost more than a used M6.

 

[aizan]

looks like they're definitely going to make things less expensive to compete with their own used equipment, and voigtlander and zeiss ikon, which go unmentioned. i can't imagine the 'short term problem' being short term without their intervention.

 

[StuartR]

RML: I agree, but frankly, they are right! I am sure that the proportion of new Leica sales to used Leica sales is much lower than it is for Cartier. People don't buy as many used cartier watches because cartier watches are not about telling time -- they are about jewelry. People don't buy a cartier watch for its ability to tell time. It is more about acquiring the unique object, which people are more likely to do with a new item. Also, buying a second hand one may not be taken as well if it is a gift, which they often are. Contrary to the beliefs of many, people DO buy Leicas for their functionality, not just their other charms. So, when setting down to decide: "What should I get?" Many people who could otherwise afford a Leica say: "Well, I could get an M6, which really is so close to an M7 or an MP that it is not worth getting a new one."
I did buy my MP new, but when I wanted to add a second camera, I weighed my options and decided on a used Hexar RF. If I did not want to risk the used market (or if the internet did not make it easily available to me), then I almost certainly would have gotten an M7. This is the kind of problem that they are talking about in the article. What Leica really needs to do is give the buyer a more compelling reason to buy a new camera -- a shiny camera and a good warranty are not enough. They need to add something...that is what they are trying to do with a la carte, but it is not compelling enough at its current price point. If they could bring it to say 500 dollars over MSRP for a custom job, then I think they would see more sales. I still doubt it would be enough though...

 

[Nikon Bob]

Just like a spoilt child where everyone else is to blame. Their prices for new gear is simply unaffordable to more and more people. They may have an idea in looking to the Far East for new markets as that is where new wealth is being created at present. The market determines the value of an item and it has spoken to Leica in no uncertain terms. You have to love Capitalism for telling the truth. The other side of the coin is that I still think it is a shame if Leica disappears all together. As far as quoting any company spokesperson, I think it is safe to say that they would never admit that their pants were on fire even if they were. That brings it back to everyone else is to blame.

Bob

 

[Solinar]

A Sign of the Times

A Sign of the Times

One of the reasons there is a gravy train of 2nd hand Leica gear up for grabs is the pros have to spend money on digital gear. I buy an old IIIf from Frank, who then buys a nice serviceable M2 and the guy sold the M2 now has a down payment for his digital gear.

Yep the prices for new gear is way to high for us plebes.

- Start with a Lens - and then - throw in a body -

It doesn't leave much left over for an M7 or MP and limited production aspherical lens or two.

 

[hth]

Leica new prices are simply too much for most people, and even if you can afford them, you are not unlikely to be at a point where you fear using them because they are so expensive. I rather spend less and get other stuff I have better use for than shelling out the money to get a tiny amount of better lens.

I think Leica should produce a series of classic lenses for less. The Elmar 50/2.8 is the only one in the current lineup that fits that description. Make them a little slower, a little less sharp, good bokeh and/or nice characteristics and they will sell. Bring back various old designs, improve them slightly with better glass and coatings. Shooters will love them and will have a lot easier to afford them than the ultra expensive ones they are trying to sell now. Such lenses will compete more with Cosina, Zeiss, Konica and second hand offerings than with the line of ultra expensive luxuary lenses Leica offers today.

 

[Solinar]

Oh yeah, I will not look this gift horse in the mouth since I'm in the market for second hand gear.

 

[iMacfan]

Personally, if things go really bad, I can see two possible outcomes:

1. Contax - like sticking of badge to anything with a lens (Do I hear Leica cameraphone?)

2. The pearing down of Leica to a company producing high quality optics for other cameras - i.e. a 50/1.4 on a Canon EOS 1Ds MkII might just tempt me to the digital side (Of course it would have to cost less than a family hatchback...)

David

 

[felipe]

I read (and reread twice) the article with the premade opinion that they (agressively) blame us for their demise - which is what I concluded from some of the posts in this thread and I actually find this quite funny. (Imagine a spitting and yelling german pointing fingers😀)

Maybe it's due to the late hour but IMHO in the linked article Leica doens't blame anyone but themselves.

The leica guy explains the cause of their financial problems, namely the unadaptive, nonmarketing and economically unaware way of doing business for far too many years, and their lack of concept (i.e. with distributing outside the home turf) in general.
He mentions us buying used gear as the RESULT of THEIR shortcomings, not the very reason for leicas demise, don't you think?

The german economy is hard to understand even for residents, as their "demise" is to great extent self inflicted and the keyword seems to be "fear".

This may need some explaining and as I can't sleep:
My mother works as a freelance designer for several companies on a per contract basis (designing things like porcelain, furniture, textiles, etc.)
She has literally survived/lived through the Rosenthal (a big porcelain manufacture) finacial downfall and several other companies gone belly up in the last few years, and 4 out of 5 companies she is currently working for will be out of business within 3-4 months if "things don't change".
The annual Frankfurt trade fair was a disaster for most local and even foreign companies if after all a well predicted one, as the signs were up since the last fair. The companies aren't planning on how to maximise their profits anymore but rather trying to find a way to remedy their unpredictably fast growing debts.

Nearly all of them are "big players", most of them started out as a family business, offer quality and service, share a brilliant reputation and long tradition, and after all serve a somewhat "special" market.

The reasons for their serious financial problems and steady decline of sales read - dead on - the same as the ones stated in the leica article.
Their unadaptive way of running the business, nonexsistence of economical awareness and lacking distribution & marketing effort "remain unrecognized within the company" i.e. are denied (like everyday'd be a sunny day?!) until they have f##### express-airmailed the whole shebang down the gutter.

And no matter where one looks or whom you talk to, they all say: "It's those asians!!" - Like they never even heard of capitalism..
To make my point - What they say is the REASON for their trouble is in most cases the RESULT of their own (then resolvable) shortcomings they intentionally ignored for what appears to be simply lack of courage. (They must have learnt that from the politicians. 😉

There is a reason why people will choose a PRS over an ibanez, Alvarez-Yairi over an Epiphone and even Zeiss/Leitz over Canon/Nikon.
However people also buy Ibanez, Epiphone and Canon Nikon, not because they are in any way inferior, but because they are better suited and less expensive.
Of course reverse engineering and cheaply knocking off unique ideas, concepts and finished products is a problem today, but if you sit on your well nourished euro-butt and think you can sit there forever without farting out a concept or at least acknowledge the competition you won't be sitting out long anymore.

I'm going to bed 🙂

cheers,
phil

 

[richiedcruz]

followup

followup

I remember when I was in high school and first getting into photography, I wanted a Leica in the worst way. I spent months and months reading and rereading a Pop Photo review about the M6, and even more months scheming how I could trick, beg or cajole my parents into buying me a Leica. This was around the time that Leica started releasing those little P&S cameras. And even at that age, I knew that those cameras had as much to do with Leica as a model car has to do with a real car.

My point: If the Leica name is so sacred to Leica management, why do they continue putting out fake digital rangefindgers, like the Digilux 2, plus a whole family of P&S cameras? Why only one entry level M series camera, the CL? Surely those germans must be smart enough to know that anyone knowedgeable enough to know anything about the M system would know that a P&S would never tempt someone who really wants an M?

How long can the name Leica have meaning to up and coming photogs out of high school, whose potential first experience with a Leica may be a plastic wonder that is barely different from a Kodak sitting right next to it at some mass market retailer? 🙁 Does it really make Leica management feel better knowing that most people's potential entry into the M system will be to buy something made by Cosina? (no offense to Cosina, I am absolutely amazed at their range of M and LTM cameras) Even Nikon had its Nikkormats and later FMs as a way to capture up and coming photograhpers and make them customers for life. And it is difficult to imagine that the Digilux 2 will really hook buyers into buying an M system camera.

Sorry for rambling, but Leica's current troubles strike me as being a bit like something out of a Greek tragedy :bang:

Richie

PS has anyone thought of going to Germany, knocking Leicas door and telling them something along the lines of:

"Earth to Leica, we need an entry level M system camera. Repeat. Earth to Leica, we need an entry level M system camera. Do you copy? Earth to Leica?? 😀 🙄

 

[denishr]

Leica troubles and European economy

Leica troubles and European economy

I've also read a couple of threads on photo.net regarding this. Some rather silly, but some worth thinking about.

There are two issues at play here, I think: one is the position of Leica itself, its management, its strategy, etc..., and the other is the global economic process, with globalisation, outsourcing, weak US dollar, etc..

Both aspects add to Leica troubles.

On the first issue, Leica does not seem to react quickly enough to the changing photo market and its definitive shift towards digital. I mean, this IS the rangefinder forum, and we all prefer analog, but, let's face it, folks - in the grand scheme of things, we're a dying breed... 🙁
And for myself, I cannot thank the digital revolution enough - if it wasn't for it, I wouldn't be able to buy all the wonderful analog gear so cheaply... 🙂
Good for buyers of second-hand analog gear, but not good for (analog gear) manufacturers!
It looks to me like Leica wasn't paying enough attention.. Perhaps they thought there will always be enough rich dentists willing to shell out $4000 for a camera? (no disrespect for dentists intended!).
I'm not an expert, so I'm not going to delve much into this... Suffice to say that they should have managed to launch a product under their brand, reasonably priced, that would be in line with current demand. I know couple of guys who wanted to buy Digilux, but it was simply too expensive - so they rather went with D70 or Canon 300D or something...

I mean, Leica was never a "volks" brand - they never had a product for the masses... Their products were always high quality, made by experts, hand-inspected, and made by highly skilled and well paid employees. You can't just cut the costs, move the production to China, and have a product of the same quality...

In my opinion, digital revolution is the major cause of their troubles. Looks like the proverbial dentist prefers to buy a new and expensive digital toy nowadays....

As for comparing Leicas to jewelry, it's just not the same: a Cartier (or Rolex) watch is a high-profile item, and easily recognized... sought by "upstarts" and connoisseurs alike. Check out all the "upstart" nouvelle riche in the former East European countries - they flash their Rolexes from the cover pages of the magazines... Leicas are not worn that way - and probably would send a wrong message anyway - like "geee, that guy's so poor he can't even afford a new camera!" 🙂 So much for "male jewelry"....

The other aspect, world economics, is something felipe touched upon... European economy is in difficulties - with rampant globalization and weak dollar, the markets have shrunk. European products are not competitive - particularly if made in Europe, by the Europeans.
I'm not too happy about it, but that's the way it is.
As a sidenote, I'm paid un US dollars, since I work for global (and globalization) companies. Today I still charge the same rates as 3 years ago. The weak dollar means that today I actually earn about 30% less than 3 years ago. I mean, the amount in US$ is the same, but when I change the dollars, I get 30% less local currency (than 3 years ago). 🙁
If you take all that into account, you'll get a clearer picture.

Also, I remember one post on photo.net, which summed up Leica problems nicely - in today's economy, making a high quality and durable product will NOT get you rich!!! Leica's quality is the cause of their demise - their products are just too good and last too long!!!

Quoting from memory (from "No Logo") - it's the brand, not the product, that sells. I'd hate to see Leica-branded trash 🙁
Their name is a synonym for quality. Take away the quality, and the brand will die.

I, for one, would be sorry to see this symbol of excellence (Leica) go down the drain.

Owning a Leica was always every photographer's dream, I guess (personal preferences aside). When you have one in your hand, you know you have the best of the best - hand made, hand inspected, surrounded by that "Leica mystique" 😉

I'm not a member of RFF by chance - I'm into mechanical precision, I hate electronics, I don't like digital photography.... I always prefer something made by humans, not machines. Maybe I'm naive in my Luddite attitude, but I always thought of Leica camera as something of ultimate mechanical quality, something that has a "soul", an object which is a "labor of love" if you want. Made by elves in Schwarzwald 😉

Anyway, sorry for the rambling... Just wanted to share some thoughts...

Besides, I think that the news of Leica's death are greatly exaggerated 🙂

Denis

 

[Solinar]

I mean, Leica was never a "volks" brand - they never had a product for the masses...
Denis

That was a good write up Denis and I especially like the above quote.

 

[Nikon Bob]

Denis

Very thoughtful and covered most if not all the bases.

Bob

 

[demian]

Yes, Denis' write up is spot on.

It is a shame Leica is paying for the high quality, reliability, and durability of their cameras.

I can see how it could be a problem. It is not a product that is continually updated and changed enough to solicit the sell of our older model for the newer.

They will not fold. Remember they were TRULY in dire straits in the late 70's when they introduced the M5 to replace the M4 and it's lack of success caused them to almost fold.

They have been trying to change in the wrong way. They can never compete in the digital market. They never should have tried.

If they saved the millions and remained small using and marleting their photojournalist history and perhaps create an MP-2 (like the M4-2, M2, M1, etc. of the past) things would be far different.

It is a niche product for a niche market. They should have remained so, pushing the power of film, nostalgia, photojournalism, etc. To think they could have competed with the digital market where the big shots can upgrade and change their models every 4 months is insanse and foolish.

As for price complaints above, well, you get what you pay for. The testiment of their quality is blatantly apparent as a result of their current situation. (As is their poor marketing skills.)

Regards.
D