[Leica] the business model

[mjblug at total.net (Michael Blugerman)]

I didn't want to continue the "doomed" thread!

Clive says:
There are two classes of companies:
(1) -Those wedded to a single, often brilliant,  product concept
(2)- Those wedded to innovation, damn the consequences to their
current business and products.

The first class develop companies with a loyal customer base who love
their superior product, even if nobody else buys it.

The second class thrives in the long run.

Xerox makes copiers. very good ones. They are really in the finance 
business. They want to sell leases on copiers which they finance. Their 
profit engine is the financing model. Just as the lease is running out, 
there are several generations of their product that they have issued in 
the interim and they would like you to upgrade to a model with more, 
better features - some of which you didn't know you needed. And they 
offer a trade in for your "old" machine. I realized that as long as I 
was going to run a business I was going to have a lease with Xerox!! 
The best I could do was to become a little more savvy about the fine 
art of leasing.

I could not afford to have ownership of a copy machine that broke down 
- if we didn't ship documents for clients, we didn't get paid. I bought 
a service package that would keep producing copies no matter what 
machine.

Microsoft would like no one to own it's software: it hopes that one day 
you will lease on a monthly service basis, software services, on-line. 
The idea of a "good object" that will last a lifetime is a dying breed. 
Computer printers are the doorway to cartridge ink sales just like the 
razor is the doorway to blade sales.

I use a parker 51 fountain pen (circa 1962). It cost $25 then, I think. 
I use it everyday and enjoy my clients asking what I am doing with the 
bottle of ink when I fill it! Many have never seen a fountain pen or 
tell me that their grandfather had one. I have "bic pens" that cost .03 
each around the office, but I write 6 - 7 hours a day and I feel better 
writing with this pen. I have had very expensive, fancier pens given to 
me over the years that haven't been able to touch all of the qualities 
of that Parker 51.

I and anyone on this list could probably take great pictures with 
several cameras or lenses - the names are often mentioned on this list. 
There is obviously something about the feel and feedback of a Leica 
that enhances the creative process and productivity. There is something 
about the signature of a Leica lens, even if lab reports cannot measure 
it.

I bought a Digilux 2 in order to keep in the Leica fold: I have M's and 
R's and lenses. I perhaps paid more for it than less for a cheaper 
camera which I could have used to produce most of the images that I 
will use it for - but I wanted to be loyal to my faith in Leica 
quality. So that even on days when my image may not "cut it" on this 
list, knowing what my camera is capable of, would inspire me to try a 
little harder!

My only disappointment is that the lens is not interchangeable - 
although 28 -90mm accounts for most of my needs and that the ISO is 
limited. I think this limitation is some to do with the sensor and some 
to do with the software. If Leica could come out with a sensor that 
delivered enough megapixels and would update the software through ROM 
enhancements over time, one could buy a Leica digital knowing that the 
camera wasn't a commodity but a "good object" that would be in service 
over time.

Only Leica knows the actual value of the a la carte program: it may be 
a distraction to those of us who wait impatiently for the next serious 
product from Leica. It may serve the purpose of keeping the Leica 
Marque current and challenge the market of people with the disposable 
income to want to own a piece of the legend. In a commoditized world, 
people have a hunger for quality and the creation of "value" is the 
major challenge. In the lineup of Panasonic cameras that come out every 
six months at different price points, the consumer has no idea of value 
except for more pixels, more this or that - but there is a Leica lens. 
Pentax doesn't have that.

It seems to me that once we are in the 10 - 15 megapixel range, the 
remaining frontiers are sensors, software and then the linkage to 
printers for print or to storage or transmission to the end user. One 
of the issues that caught my attention about the Digilux was the 
possible choice of a HDTV shaped format. If one wanted to do a 
presentation on the new HDTV format screens that will be in homes over 
the next few years, the format from the camera was there without the 
letterbox black or cropping. The inclusion of RAW transformations in 
photoshop software CS or Elements for the Digilux was a big move to 
"longevity" of my camera. The ability to transform the digital image to 
the desired output - print, LCD screen or whatever - needs to be as 
seamless as possible.

At the end of the day, the camera is a tool. It is one thing to make 
the user feel better or proud of his equipment but there is a point - 
bringing the image to an audience who sees value - in all of the 
emerging ways that images are being presented. I am enjoying my Ipod 
and Mac. Apple has been enjoying a great run lately in the digital hub 
notion. People want their music, images and printed material to share 
with others, to enjoy personally and for some, to make a living from 
the elimination of complexity of the creative process.

The easier that is to accomplish, the more people want to try it 
themselves. Then that creates the specialty or niche market, where 
people want to push the envelope and will buy and use finer equipment 
somewhere in the creative workflow to get the edge and create value.

I give Leica a lot of credit for taking its time to make the next move; 
I don' t think Leica was ever priced as an everyman product. II think 
it would be a mistake for them to enter the commoditization rat-race. 
While we may be impatient for the digital back for R or M lenses, I 
don't see the future in these items as objects the way I did in an M 
camera or an R camera. The innovation will have to be more in the line 
of a Leica image processing system than the "gold watch" fine object 
that one bought or received and then kept for "life". The 'value' will 
be seen in the utilization factors for the photographer and the ease 
with which the system makes a felt contribution to the end-user 
concerning the 'image' in whatever format that may be.

Michael Blugerman