[Leica] Leica - Are they pricing themselves out of the market?

["Kotsinadelis, Peter (Peter)" <peterk@lucent.com>]

Ted Grant wrote:
>
>Hello Peter,
>
>As was explained to me in 1988 after my Winter Olympics "road testing" of
>the prototype 400 2.8. I put in my after Games report, "But why make them
>at that price...$20,000? What's the point of making them if we can't afford
>to buy them?"
>
>Response! "Mr. Grant because you can't afford a Mercedes, does that mean
>they shouldn't make the Mercedes car?"  In other words, "because you can't
>afford the $20,000 for the 400 2.8, we shouldn't make them?  However, there
>are those who can, so we must make them for those who can." :)
>
>I guess if you can cut the price that's cool, but those who can't afford
>the price, that's their problem, not Leica's! I don't think Leica need to
>wake-up on their pricing as long as there are those who can afford and will
>spend for Leica quality.
>
>I guess if Leica find they aren't selling and go tits up, we can figure on
>buying alot of cheap lenses. However, I think that's highly unlikely in the
>foreseeable future.
>
Ted Grant
- ----------------------------------------------------------------------------
- --

Hi Ted,

Yes it makes some sense, but IMHO it sounds much more like an excuse more
than anything else. 
The Leica-R's 400mm F2.8 today is a combination of a LEICA 400/560/800
APO-Telyt-R Modular Head ($US8500)and Focus Module F2.8/280/400 ($US3300) a
total cost of $US11,800.  Not a bad price considering you have a modular
lens than can be used with other components to create other focal lengths.
The equivalent Canon sells for $8000, and Nikon sells for $US7700.  The
Leica modular design is ingenuous, but without enough Leica-R users as a
market, Leica will need to sell it at a higher price to maintain
profitability.  Also, perhaps they have an older manufacturing
infrastructure compared to their competitors.  Then Leica's cost of
manufacturing adds to the price.  

As to Mercedes, they were smart.  They needed a lower priced entry, and came
out with the C series which sell for much less than the E series.  Yes, they
are large and plush, but there is a limited market for a $70K plus car
(except in California where everyone seems to be driving them) so having an
option buys you a customer who may later have the money for that E-Class.  

Peter K.
At least Mercedes designs their cars with the steering wheel on the correct
side ;-)