Durable Goods Versus Commodities

bmattock

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The problem - for Leica and those who are staring extinction in the face due to their inability or refusal to change, is that they do not understand the difference between a durable good and a commodity; or perhaps they refuse or are unable to understand that cameras were the former, and are now the latter.

When film became a relatively stable market (35mm and 120 roll film), we saw cameras built for decades. Camera manufacturers built tanks, cameras that could be fixed and maintained indefinitely, and with great mechanical precision.

When AE and later, AF, entered the picture, costs began to be cut in an effort to incorporate the newest technology, but with an understanding that these advances were still advancing - they were in a state of flux. Most of the early AE and AF cameras are in no way comparable to their purely-mechanical ancestors.

When AE and AF had finally stabilized - for the most part - mechanical and electronic quality returned again to the marketplace.

Then digital turned everything on its head again.

And this time, the shift was permanent - or at least permanent from our point of view in the ebb and flow of time.

Digital cameras are far from stable. The technology evovles daily. There is no need - indeed, no reason - to build a digital camera capable of weathering decades of abuse. No one will want a 6mp dSLR in ten years - it will be virtually worthless, like a Time magazine promotional giveaway 35mm camera of the 1980's. That's even assuming it works by then.

But Leica wants to build high quality machines.

Digital cameras have no use for such devices. Yet. Leica does not get it. They're idiots. Really. A bunch of ancient creaky stuffed German suits who think they can dictate how the world will revolve around them.

Canon, Nikon, Pentax, and Olympus figured it out - but nearly too late. Konica-Minolta was too late. Companies like Sony, Panasonic and Samsung are smacking them around some. They're not traditionally camera companies, but they know computers and high-tech; and that's what digital cameras are. The smartest of the traditional camera companies made pacts and partnerships with the computer companies like Leica did with Panasonic and Pentax did with Samsung.

Hey, I just called Leica stupid, but yet they cleverly partnered with Panasonic. How can that be stupid? Its only stupid because they don't realize that's where they should be putting nearly ALL their efforts, not operating it as a sideline. That's their future, if they're going to have one.

Perhaps someday, digital camera technology will plateau. And when it does, there will be a place for cameras that are durably made goods again and not throw-away commodities. But I don't see that day on the horizon at the moment.

If camera companies can't figure that out, they are not only doomed, they deserve to be doomed for being criminally stupid and cheating their stockholders.
 
I think you make a great point. I know I do not like (at all!) the paradigm shift from camera as durable good to commodity, the shift from spending on film, chemicals, paper, processing, etc., (these days it adds up to the equivalent buying cameras over and over) to replacing cameras. But at least I'm conscious of my preference and reserve the right to be a curmudgeon cuz dammit I've earned it.

bmattock said:
Hey, I just called Leica stupid, but yet they cleverly partnered with Panasonic. How can that be stupid? Its only stupid because they don't realize that's where they should be putting nearly ALL their efforts, not operating it as a sideline. That's their future, if they're going to have one.

I think the issue is if they did so ... they'd have NO idea who they really were. Without a vision, the Leica perishes.
 
I thought that too about the M8 when it was first announced, though I could not have expresed it as elegantly. A short while ago I thought Leica had clued in, with the sensor upgrade idea, making the durable camera make sense, but then the guy with that idea got fired.
 
Bill

I don't like the shift but I think you do have a point.

Bob
 
Makes you wonder how camera manufacturers ever survived in the old days. I mean, you buy a camera once and use it almost forever. Geez, what kind of money could there be in that? Sure, you sell a couple, maybe three lenses, and then it's over. It's the film guys who get to clean up because they made the consummable commodity that you had to buy day in and day out. Now it's the camera manufacturers who make the consumaable commodity that you have to buy year in and year out. The film guys get left on the side lines and the camera mfgs who don't "get it" get left as road kill.

/T
 
There is the possibility that one could still consider lenses as "durable goods" that can be used on commodity digital cameras. Leica could make lenses for Panasonic cameras and be done with building cameras. They could keep the design work in Germany and farm out the manufacturing to Vietnam, China, Malaysia or whereever.
 
Part of me (a large part of me, I suppose) really resents the commoditization of photography and cameras. I understand why it is happening. I just don't like a throw away society. I try to buy products that last. I refuse to be swayed by the "lowest price always" or "we will not be undersold" mentality of the times. Humanity is on a treacherous path with the attitude that: "I'll just get rid of this widget when it's broken and buy a new one". We will get what we deserve... a polluted, resource depleted planet. I hope our grandchildren can forgive us. I know this is taking the Leica as dinosaur discussion a long way. But I believe, it is the end result of what we're doing.

Watch this video, if you dare:
[SIZE=-1]www.storyofstuff.com[/SIZE]
 
wow, good thing there is at least someone around here to tell us who is smart and who is dumb. Yeah, get out of film cameras, Leica! Compete with Canon and Nikon - that's the way to get rich these days. The digital market is wide open, and every player reaps huge benefits, spends nothing on research, and has no recurring costs to deal with. :/

Honestly, do people really think anyone who sees something they don't are stupid? Is that the only option these days? Hell, everywhere I go there is film on the shelf these days, it just seems obvious to me that a company that produces high quality film cameras would be stupid to drop that line to chase the McDonalds of the world into digital.

Leica now has digital offerings for their customers, but they've never been a commodity camera maker. WTF would they start now? And FWIW, has Leica EVER been immune to speculation that they were mere days from going belly up? They've only been making 35mm cameras since what - 1925 or so? To hear some people talk, they've managed to survive despite insisting on producing out-dated products for too small a market for too much money in factories located in too expensive a labor market for anyone to possibly succeed. Yet somehow, despite being populated with idiots in the most inhospitable position ever described, here they still are in 2008. Must be dumb luck, because obviously nobody at Leitz has ever known their ass from a hole in the ground. :)
 
Trius said:
I think the issue is if they did so ... they'd have NO idea who they really were. Without a vision, the Leica perishes.

I think it is possible that Leica has no future no matter what it does. However, consider that they have name recognition like nearly no other company. That's worth a fortune alone. Leica has played around with that in the past, with compact high-end but consumer-oriented 35mm film cameras and their flirtations with Panasonic. But I really think Panasonic gets the best of that relationship. They get name recognition that lifts them out of the also-ran Japanese "I used too be somebody" tech company status and what does it do for Leica? Waters down their name brand slightly.

Ultimately, Leica's obligation is to their shareholders, not their customers. I am rather surprised that the stockholders haven't revolted by now.

Tick tock - Leica needs to get with the program if they expect to survive.
 
40oz said:
wow, good thing there is at least someone around here to tell us who is smart and who is dumb. Yeah, get out of film cameras, Leica! Compete with Canon and Nikon - that's the way to get rich these days. The digital market is wide open, and every player reaps huge benefits, spends nothing on research, and has no recurring costs to deal with. :/

I didn't say that.

Honestly, do people really think anyone who sees something they don't are stupid? Is that the only option these days? Hell, everywhere I go there is film on the shelf these days, it just seems obvious to me that a company that produces high quality film cameras would be stupid to drop that line to chase the McDonalds of the world into digital.

Is their present strategy working for them? Their most recent financial report says they hope to have a slight positive revenue this coming year. Wow. Overwhelming.

Leica now has digital offerings for their customers, but they've never been a commodity camera maker. WTF would they start now?

I haven't suggested that they become one. I said that cameras are now a commodity item.

And FWIW, has Leica EVER been immune to speculation that they were mere days from going belly up? They've only been making 35mm cameras since what - 1925 or so? To hear some people talk, they've managed to survive despite insisting on producing out-dated products for too small a market for too much money in factories located in too expensive a labor market for anyone to possibly succeed. Yet somehow, despite being populated with idiots in the most inhospitable position ever described, here they still are in 2008. Must be dumb luck, because obviously nobody at Leitz has ever known their ass from a hole in the ground. :)

Correct. They have been on the ropes several times, looking for long-term financing to keep the lights on. Each time, they've managed to secure it more or less at the last minute. How long can that go on?

Voigtlander made cameras longer than Leica. Where are they? Oh yeah, they're a nameplate licensed by Cosina of Japan. Silly me.
 
Leica really need to get into bed with other manufacturers if they are to survive and prosper. Rolls Royce chose to put BMW engines in their cruise ships ... Jaguar survives as a marque courtesy of Ford as do Volvo. The world's fastest most expensive car, the Buggati, was built by VW ... and so on and so on!

It's as plain as the nose on your face and like it or loath it it's what has to happen eventually ... or maybe their stubborn individuallity will become an epitaph inscribed on their headstone!
 
it occurs to me that people that ought to know better somehow forget that few things are actually different today than they ever have been. What is a kodak Brownie but a "commodity" camera?

Oh yes, I forget that the only "voice of reason" is that voice predicting doom. Anyone that points out that the doom we face today is no different than the doom we faced since the beginning of time is shouted down for being blind, ignorant, and rude :/

Any of you old enough to remember 110 film? You know, the film that was going to drive 35mm off the map?

The fact of the matter is that luxury nameplates like Leica will always ride the ragged edge of profitability as measured by corporate boardrooms. There is more to life than market share. Let's be honest. Someone who buys Leica does so for the very same reasons people buy Leica cameras, even second-hand. They want a part of the mystique, the allure, of a top quality product that isn't governed by the same kind of bean-counting nitpickers as McDonalds food and Toyota cars. if you want a Nikon, buy a Nikon. Nobody is stopping you, least of all Leica. I really fail to see why every car maker ought to build toyotas anymore than I understand why Leica should build Nikons. Paste a Leica dot on your Nikon or Canon and call it a day already.

So what if Leica survives "only" because someone bought an "almost bankrupt" name. They bought it to keep Leica cameras on the market. They didn't buy it to take advice from internet posters who've never run an international luxury nameplate. Obviously they didn't buy it in hopes of getting rich - they're already "rich." They have the money to lose. If all they hope is to break even when they sell it, we all win. Calling them stupid just smacks of armchair quarterbacking.

Some people aspire to buying a fancy car when they make it big. Some aspire to buying the company that makes that car. Does the person buying a 911TT hope to make money driving it? Or do they just enjoy driving it? How many sports teams are bought by people who just want to own a team, profits be damned as long as it doesn't cost them too much? They all willingly sell out to another kindred soul after having their fun. There never is any real shortage of buyers no matter how much the previous owner laments the costs of running a pro team. Leica is like a pro sports team. As long as there are moneyed individuals willing to buy new Leicas, there are even more moneyed individuals willing to buy Leica. And last I checked, Leitz successfully sells more than a few cameras and lenses with pricetags that would choke a horse.

How many dump far too much money into a hobby that will never pay monetary dividends? Do we endlessly question the judgement of folks who pour money into bodies and lenses and film despite never producing a work that shines for the ages? Do we call people stupid if they take pictures with expensive cameras yet refuse to shoot weddings for pay?

While I admit buying a large company for dumptrucks full of loan papers simply to be able to show up for a meeting in a Leitz building does seem a bit beyond what I consider a "hobby," I'm not in a position to call it any less rational than my own, considering the kind of person able to throw down for a Solms factory probably still has a lot more left over to live on than I do.

But yeah, they're probably stupid :(
 
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sitemistic said:
"They didn't buy it to take advice from internet posters who've never run an international luxury nameplate."

Perhaps not, but Leica appears to be reacting to all those Internet posters.


oh please...your sense of self importance is staggering!
 
"Hey, I just called Leica stupid, but yet they cleverly partnered with Panasonic. How can that be stupid?"

They should have partnered with Sony. That would have been more clever. Maybe that's what Minolta did.
 
What is all that fuzz about Leica-doing-this-having-done-that ? Why everybody cares so much about the future / non-future of a small German camera manufacturer ... They have build cameras for some decades, many of these cameras are still around and will be when Leica as a company has gone. Everything else is speculation ....
 
Leica is just a business, I think everyone here is losing sight of that, and some take it personally...Coors and Miller have merged to compete with Anheiser Busch, businesses will do what they must to survive. I have a mantra I live by: If you cant affect the outcome, why worry about it? Really, who cares anyway; if Leica goes under (which they wont) someone will buy the name and produce an inferior product :)
 
JTK said:
"Hey, I just called Leica stupid, but yet they cleverly partnered with Panasonic. How can that be stupid?"

They should have partnered with Sony. That would have been more clever. Maybe that's what Minolta did.

I think the best hope for Leica is to be bought by someone like Sony. Doesn't the old KM have a lot of optics business that might blend with Leica's non camera business?

As a brand Sony could leverage some of the old Konica Hexar with the Leica M and add in digital and come out with a line of dRF Leica by Sony cameras.

Who really takes Sony seriously in the dSLR market, or is percieved to be a big player. Nobody. Add in the Leica name, maybe even use Leica as their 'L' glass and now you are talking something tangible, something marketable.
 
Perhaps someday, digital camera technology will plateau. And when it does, there will be a place for cameras that are durably made goods again and not throw-away commodities. But I don't see that day on the horizon at the moment.

Although I don't think digital is at a plateau now, in some respects it may be getting close.
Already there really aren't any bad DSLRs out there, just DSLRs at different price points.
We could discuss to death what spec would be necessary to satisfy Leica's customers, but I think anything over 10mp, full frame with a good looking 1600 iso capability might be in the right neighborhood.
If/when Leica delivers that performance level, will it really be necessary to chase the latest and greatest to keep the customer happy?
I guess I'm thinking that most RF users would get to a point where they think, "Hey, that's as good or better than the film I was using." And they'd be happy with a much slower development cycle than the typical DSLR user.

I know that if such a DRF camera existed that I could afford, I'd buy it and keep it till it died.
 
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