Archived posting to the Leica Users Group, 2002/12/20

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Subject: Re: [Leica] Don't be now why digital doesn't make money
From: "Don Dory" <>
Date: Fri, 20 Dec 2002 22:33:03 -0500
References: <> <021201c2a85d$63569a00$c92c95d0@Mobile>


Don't be too sure about digi's making much money.  Production runs are
short, old inventory is virtually worthless, retailers will not stock up
without the ability to return see above.  Unlike film cameras, I'm not even
sure most companies have the in-house expertise to build these puppies so
probably most are re-badged.

The most expensive part of the camera is outside the control of most
companies, the imaging chip is just like the microprocessor in your
computer.  The CCD or CMOS makes money for the OEM but the company that buys
them is faced with  very rapid price movement for "old" devices.

Last, look at the market share for digicams.  My information is months old,
but Sony had market share in the high 30's(had been over 50%), followed by
Canon, Olympus, and then all the rest.  Like most business, only the top two
in market share are making any real money.

The manufacturers are chasing growth, hoping that the next product cycle
will bring them prosperity.  The last half of this year saw digi's taking
more than half of all camera's sales if you exclude disposables.  Christmas
sales are probably more than 80% digital.

Last, everyone hopes that now that consumers have settled in to the 2-4
megapixel range the vicious product cycles will mostly end and everything
will settle down into the old business cycle.  My personal belief is that
the vicious cycles have only just begun, cameras in phones where small file
size and very low power consumption are prized, 10MP point and clicks, small
purse camera, disposable digitals, truly point and click cameras without any
obvious digital interface other than the LCD screens, the list goes on and

 Sometime, just for fun, look at an old camera magazine from the late
fifties to early sixties.  All the manufacturers with all the product
offerings both rangefinder and SLR.  Folders, medium format, even some large
format for amateurs were offered.  Multiple film formats, 35mm, 120, 127,
some old stock 620, Minox, 6X9 cut film, and more were offered to the
public.  By the end of the sixties most of the companies were gone or so
crippled they appeared in name only.  Exacta, Zeiss Icon, Voigtlander,
Topcon, Kowa, Alpa, Miranda, and many others are all gone.  The digital
market is the same, only a few will be standing in ten years.


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