M8 Price Hike

[allen_a_george]

Hmm - lots of extremes being bandied about here.

Considering labor cost: no doubt making cameras and lenses is extremely labor intensive and is a significant fraction of its total price. But I don't think offshoring production is a wise idea. Leica would lose existing skill, suffer re-tooling costs, teething and initial quality-control problems, and their public perception would be damaged. But you can ask "Are those employees at Solms making the best use of their time?"

This then becomes an engineering problem. Maybe some sub-components of a camera can be redesigned to eliminate labor on the line. Maybe some tasks would be better done by machines. Increased platform sharing between different models would reduce the setup and takedown time - when an employee has to change from doing one complex task to another. These are all process engineering improvements, and no doubt Leica is pursuing some of them.

 

[retow]

Dear Ray,

Fair enough in one sense, but some people do seem to want to suspend the laws of economics (e.g. lower US prices on euro imports, when the euro is strengthening against the dollar) or even the laws of physics (putting a full-frame sensor into an M with existing technology).

"If wishes were horses, then beggars would ride," and this is the way an awful lot of people seem to think about Leicas.

It's fair to ask, "Why do Leicas cost so much?"

What puzzles me is the people who, having been told why a Leica costs so much (expensive components, labour-intensive assembly in a high-wage area, limited production) then say, "Why not use cheaper components and build it on a production line in a lower-wage country?"

There's a simple answer to that. "Why would you?"

Cosina, in association with Zeiss Ikon is already doing that. If you want that camera, buy a ZI or a Voigtländer. But don't demand that Leica puts their name on it to satisfy your ego ("I've got a LEICA!") or because Leicas cost more than you can afford.

Above all, don't say that because you don't want/can't afford a Leica, no-one should be allowed to have one, and hundreds of people should be thrown out of work -- because that is what people are saying when they say that Leica 'ought to go broke' or 'deserve to go bust' or whatever.

Cheers,

Roger

Rising prices simply because ones costs go up is only working for monopolists or in former Sowietunion type of economies. Unlike many other manufacturers and unfortunately Leica has proven over and over again, that they are not capable to cope with the never disapearing challenge of raising costs. I think most of us, if not all, wished they did better. Rising commodity prices (glass, metal, utilities to manufacture) all has gone up, especially expressed in USD. But it is always the German labour costs which are brought as an excuse for steep price increases, even in Euro. Labour costs go up everywhere and for everybody, percentage wise steepest in booming economies, such as China an India.
"Boss I need a higher salary, since with the present one I can't afford my lifestyle I'm not willing to change at all". This seems to be Leica's attitude to the challenge, regrettfully.

 

[Roger Hicks]

and leica's head in the sand strategy is good for their employees?!

This is the kind of thing I was talking about. Do you REALLY think you could run the company better than Kaufmann? Have you any experience in running companies making luxury products? Are you a camera designer? Have you enough money to buy the company?

Alas, I have to answer 'no' to all of the above -- so I suspect that possibly, any insulting comments I may make about Leica's strategies are of very limited value.

Do you think Leica wants to go bust? If not, consider the possibility that they may be following the strategy they think best - and that this might be at least as good as your own ideas, given how much more information they have about the company, its products and its markets.

Finally, how many Leica employees have you talked to? Have you been to the factory? Again, consider the possibility that if the employees thought Leica was about to go bust, they'd be looking for jobs elsewhere. On a factory visit, you can always get some feeling for how the workforce feels: there's a mood in the air. Leica felt OK to me.

Ray is right, though I'd use the word 'betting' rather than 'banking'. Time will tell.

Cheers,

R.

 

[Roger Hicks]

Hmm - lots of extremes being bandied about here.

Considering labor cost: no doubt making cameras and lenses is extremely labor intensive and is a significant fraction of its total price. But I don't think offshoring production is a wise idea. Leica would lose existing skill, suffer re-tooling costs, teething and initial quality-control problems, and their public perception would be damaged. But you can ask "Are those employees at Solms making the best use of their time?"

This then becomes an engineering problem. Maybe some sub-components of a camera can be redesigned to eliminate labor on the line. Maybe some tasks would be better done by machines. Increased platform sharing between different models would reduce the setup and takedown time - when an employee has to change from doing one complex task to another. These are all process engineering improvements, and no doubt Leica is pursuing some of them.

Dear Allen,

Leica's analysis is substantially identical to your own, and their response is identical to your last phrase.

Cheers,

R.

 

[Ray Nalley]

Allen, you make a point. But it may also be that it has simply become too expensive to produce a camera like the new Leica M's, without cutting corners and reducing the perceived value of the camera, at a price that enough people will pay. Perhaps Leica's pursuit of perfection and the reality of economies has simply made such a camera too expensive to produce any longer.

 

[allen_a_george]

The second thing:

A brand having a range of models at different price levels is a good thing. Leica already does that. The question is, however: in the future how many models will exist in that price range, and which levels.

No one's arguing for Leica to produce a $499 rangefinder, or a $499 high-performance compact. They're not going to, and it's clear they're never going to. But there's considerable wiggle room between $1K and $5K for other models. Perhaps two fixed-lens compacts (with a large sensor) each at $2.5K? Something that speaks to their heritage, and the reason many photographers picked a Leica (robustness, unobtrusiveness, clear and quick access to photographic controls).

On a very separate note, I actually believe the rumor that Leica will produce Canon-mount lenses. This builds on their reputation as a lens designer, and is substantially cheaper than building their own AF DSLR. It seems like a better return on investment.

 

[Turtle]

It will be very interesting to look back on this 5 years from now. Will leica have great new 'user' products funded by the present pricing of prestige items, or will their prices be even higher, with the M9 costing $10k and offering 14mp? Who knows!

I cant help but feel that Leica cannot live on past glories forever and once working photographers stop using them, the shine will wear off even in the collector market. Some people say that pro's don't worry about price, but that of course is BS - they have to live like everyone else. Some say no relevant working photogs use Leica nowadays and I think that is equally untrue (it does not have to be commerical work to be relevant). I personally think - I am no commercial genius I admit - that if Leica continue to price themselves as they do, it will bite them in the ass eventually. The Summarit line was a good start, but IMO it is not nearly enough. The price of film bodies is vastly higher for the same camera as 3-5 years ago and for a digital camera to go up at all, let alone one with some significant issues, is fairly silly. I think Leica need to ground themselves and understand that absolute optical perfection might be admirable, but it not particularly necessary in the real world. There is a lot of claptrap thrown about with respect to lenses and a lot of people that claim X is vastly superior to Y when they have not used either, or used only one...or photographed a test chart.... I think Leica's compromises in the summarit line have been hard to find according to the tests I have read (apart from aperture, but lets remember the 90 Summarit is fater and cheaper than the Elmarit M and still a comparable performer) - even Putz admits this!

FWIW, I DID struggle to afford my Leica kit. I winced for a while, but now own them and am happy I did so, because I could not contemplate the same purchases now. Sometimes a purchase can hurt a little and still be the right thing....esp now they have appreciated substantially

Another factor which people ignore is insurance/loss. Put together your bag of two leica M7/Ps, 28 Cron, 50 Lux, 75/90 Cron and you have $20K in a little Billingham - this is frankly ridiculous. Thats one HELL of a dent when a lad runs off with it in Chinwala. some people perhaps are not prepared to take such a risk and so don't buy the Leica kit on this basis....because they want something they can use and not be perpetually terrified of losing....dropping...scratching.

don't get me wrong, I love Leica kit, but we should perhaps admit that they have been pushed (new kit) well outside of the 'practical, working photography' sphere in the main. I am still hoping to find a 0.58MP on ebay for $500, but assuming I don't (why of course), it might have to be an R4a. In short, I feel Leicas have shifted from being 'performance items' to 'prestige items'.

 

[allen_a_george]

Rather than discussing wether someone can/should/wants to afford a new M8 at new list prices, how about looking at it from a different angle.

How many of exisitng M8 users would immediately rebuy a new (!) M8 at the new list price if theirs got lost?

I think this is a really good question. Perhaps we should accept that many of us can't, and like me, will come into Leica gear through the used market. While these are sales that Leica loses, its open to debate whether the R&D and manufacturing costs involved in catering to our price range is worth it to Leica.

 

[Roger Hicks]

Rising prices simply because ones costs go up is only working for monopolists or in former Sowietunion type of economies. .

First, that's flatly and demonstrably untrue, or prices would never rise except when new features are added. In 1971 a Leica M4 was GBP 202. Let's assume that adding a meter and the extra finder frames costs another 50% (which it probably doesn't). By your logic, an MP today should therefore cost GBP 303.

Second, a lot of luxury goods have gone up a lot faster than inflation.

The fact that a Leica is a very good camera does not stop it being a luxury. Lobb shoes are very good shoes, but they are still a luxury. Cask strength Laphroaig is very good whisky, but it's also a luxury.

Too many people conflate 'designer labels' and 'expensive' with 'luxury', when the truth is that often, luxury goods are very expensive simply because they are well made.

Yes, you can make cheap imitations and 'second strings'. But if you can sell the real thing at a price that people are willing to pay, why cut corners?

(Yes, I know there are many people here who are not willing to pay. So?)

Cheers,

Roger

 

[Roger Hicks]

The price of film bodies is vastly higher for the same camera as 3-5 years ago . . .

some people perhaps are not prepared to take such a risk and so don't buy the Leica kit on this basis....because they want something they can use and not be perpetually terrified of losing....dropping...scratching.

For the first, no it isn't. It's about similar to inflation (maybe slightly higher) IN EUROS. It's vastly higher IN DOLLARS becuse of the fall of the dollar.

For the second, we're back to 'can you afford it?' If you can't take the risk of using it, you can't afford the camera.

Incidentally, Leicas aren't all that expensive. Priced an Alpa 12 S/WA lately?

Cheers,

R.

 

[Ray Nalley]

Speaking of Leica making lenses for Nikon and Canon: I'm not convinced the real world difference to a photojournalist or wedding photographer (Nikon and Canon's primary professional market) between a $400 Canon 50mm 1.4 and a $3,000 Leica 50 1.4 would be sufficient for many to opt for the Leica. But, I could certainly be wrong.

 

[jaapv]

There is so much nonsense being bandied around here. I bought my M8 cameras in 2006 for 4190 Euro each. Now Meister Camera, which is a -if not the- main Leica outlet in Europe is selling them for 3990 Euro. So where are these "dramatic price hikes"?

 

[retow]

First, that's flatly and demonstrably untrue, or prices would never rise except when new features are added. In 1971 a Leica M4 was GBP 202. Let's assume that adding a meter and the extra finder frames costs another 50% (which it probably doesn't). By your logic, an MP today should therefore cost GBP 303.


Cheers,

Roger

If the market segment one competes within has to inflation adjust prices, your analogy is certainly spot on. But in the high end digital camera market it was, is and will continue to be different, because of technology advancing. A couple of weeks ago I bought a new 5D +14-105L lens for USD 2600, i.e. about USD 1600 for the body (official US import), maybe an extreme example of price adjustments for maturing products, but not an unusual one. Granted, the M8 is a niche product, but with the ever and fastly growing price differences between FF DSLRs and M8, the former may start to look more compelling and be perceived as "alternatives" by some. Shooting a 5d with a used Leica R prime doesn't really sound like hardship, or does it?

Best

 

[jaapv]

. Shooting a 5d with a used Leica R prime doesn't really sound like hardship, or does it?

Well, you DO lose a number of reasons that make the 5D attractive, like autofocus and open-lens metering...

 

[victoriapio]

There is so much nonsense being bandied around here. I bought my M8 cameras in 2006 for 4190 Euro each. Now Meister Camera, which is a -if not the- main Leica outlet in Europe is selling them for 3990 Euro. So where are these "dramatic price hikes"?

And used M8s actuallly continue to drop in price or at least hold steady for now.

O.C.

 

[tomasis]

We are really free to buy what we can (need, want, wish, whatever).

You who dont like prices of leica, I suggest buy super cool advanced cheap Canon 5D, Nikon D700 so it'll be pleasant here without complaints, right? I mean that complaints dont reduce prices or give bonus, only add more irritations.

I think we as consumers can make "silent" protests e.g. not buying from leica. Companies as Leica will take care of volumes of sales itself. They go bust either survive.

I cannot afford a Lamborghini neither newest Leica equipment. I'm happy with 30-50years old junkies with name Leitz. Am I complaining if I cannot afford? No, it is just time waste. I cannot afford M8, I bought Rd1 instead. Digital is not my top priority so I have big luck owning M3, M4. I cannot live with DLSR, only RF. It is my priority also. I love cars much, I wish I would buy anything sweet but my interest for photography is just bigger. Anybody can buy Lamborghini, if he doesn't chose a girlfriend, baby, family, house. Well it is if he is enough crazy motor enthuasist in his heart.

Look, the world is full of possibilities. You have to lose some to have other.

 

[tbarker13]

I just wonder if there are any other examples in recent history of an electronic item getting a major price increase nearly two years after its introduction - without a single upgrade. Computers, cell phones, MP3 players and every other camera I can think of all decline rapidly in price, or are replaced by something better at the same price point.

Maybe Kaufmann knows something the leaders of those companies don't know.

And that argument about this being the only digital rangefinder (and being able to set its own price) only goes so far. I mean, certainly we'd all agree the M8 isn't worth $5 million or even $500,000.
Even when you have no competitors, you can only push so far before potential buyers decide you've lost your mind. It just takes some of those buyers longer to figure it out.

 

[Olsen]

And those were ONLY SIX YEARS AGO!

That is a hell of a long time when it comes to the value of the dollar. Back in 2001 the value of the dollar was NOK 9,98 - last month, July 08, it had reached to 4,98 - today it is up at NOK 5,40.

The lack of awareness among Americans of the importance of - and impact of - the dollar value in the international currency market and what it means regarding cost of 'just everything' in their daily life is amazing....

Bewildered you point fingers at 'the leica management'. Direct your anger and 'point your finger' at your own political and economical leaders instead. That's the right adress.

 

[Ray Nalley]

Again, it doesn't matter why the prices have gone up. They have gone up. And that effects buyers purchasing decisions.

 

[Ben Z]

There is so much nonsense being bandied around here. I bought my M8 cameras in 2006 for 4190 Euro each. Now Meister Camera, which is a -if not the- main Leica outlet in Europe is selling them for 3990 Euro. So where are these "dramatic price hikes"?

In the US Although the current $500 rebate leaves it only $200 over the original Oct '06 price. And I don't know but maybe some larger dealers would cut a deal to move their inventory. Smaller dealers in the US rarely stock more than one at a time.