Archived posting to the Leica Users Group, 2015/08/09

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Subject: [Leica] Minor additional woe
From: john at mcmaster.fr (John McMaster)
Date: Sun, 9 Aug 2015 14:10:00 +0200
References: <CAH1UNJ1hBdhYJ-mSr3zjvgKPGZ0-ajqBuH6jonpTavG362OMBw@mail.gmail.com> <1752273151.1359315.1439058254778.JavaMail.yahoo@mail.yahoo.com> <CAH1UNJ3zv+yV4_z-HZJJ95VTZUx3FVNx5kK1JCxowFoTuyaRrA@mail.gmail.com> <B15C75CD-4382-4F40-99CE-DDF80FE88C9A@btinternet.com> <621131CE-5DDE-47E4-8AA8-286303FBC55E@gmail.com> <CAF8hL-ECgUL7W7S-9z4s8wwszFxfynmZZ=5ePHQ+fLRmNzf6-w@mail.gmail.com>

The Phase costs even more than an S unless you already have a back, and 
neither has lenses of similar quality to Leica. B&H has the S(007) listed 
for 31st August 2015...... Those big discounts are only in the USA :-(

john

-----Original Message-----
From: LUG [mailto:lug-bounces+john=mcmaster.fr at leica-users.org] On Behalf 
Of Richard Man


I am just wondering about all these price discounts that keep getting 
extended. Not that I can afford them, but it must mean something?

Also, the S007 is getting very late, and the new Phaseone XF looks to be 
very competitive, and the Pentax 645z is under $10K...


On Sun, Aug 9, 2015 at 2:30 AM, Jayanand Govindaraj <jayanand at gmail.com>
wrote:

> Frank,
> You might well be right, though we have no idea what is being diverted 
> away by the shareholders. PE investors have a habit of showering 
> monetary goodies on themselves through obtuse and opaque financial 
> jugglery, which are very difficult to deduce from a perusal of the 
> Annual Statements of Accounts. If Leica does not make sufficient 
> profit overall at current prices of their products, when can they ever 
> hope to do so? At any rate, they will have a tough time going forward, 
> given their increasing reliance on the Chinese market over the last 
> decade. Have you noticed the results of another company with the same 
> dependence on the Chinese market, Jaguar Land Rover? Not disastrous, but 
> indicative of very tough days ahead!
> Cheers
> Jayanand
>
> Sent from my iPad
>
> > On 09-Aug-2015, at 13:52, Frank Dernie <Frank.Dernie at btinternet.com>
> wrote:
> >
> > Jayanand,
> > If they trebled their current prices, we would be in agreement. They 
> > are
> still nowhere near expensive enough to be profitable if you are right 
> about their business plan (which I would wholeheartedly agree looks 
> likely).
> Despite years of widespread pessimism about Leica?s future the first 
> time I thought the end was nigh was when I heard about investment by 
> venture capitalists. Rapists.
> > Frank D.
> >
> >> On 9 Aug, 2015, at 04:32, Jayanand Govindaraj <jayanand at gmail.com>
> wrote:
> >>
> >> Frank,
> >> Your expertise is engineering, mine is corporations, including the
> behavior
> >> patterns of those with substantial P/E investments. Lets agree to
> disagree
> >> on this one.
> >> Cheers
> >> Jayanand
> >>
> >> On Sat, Aug 8, 2015 at 11:54 PM, FRANK DERNIE <
> frank.dernie at btinternet.com>
> >> wrote:
> >>
> >>> Jayanand,I think the only things they sell in the way you believe 
> >>> are
> the
> >>> special editions at ?20,000+.
> >>> Both Canon and Nikon sell their top models at a loss, since the
> production
> >>> volume, which is far higher than Leica M, means they can not be 
> >>> sold
> at a
> >>> price which covers costs, the manufacturing is amortised over too 
> >>> few units.They can make their profit by selling vast numbers of 
> >>> less
> expensive
> >>> cameras. Leica can't.
> >>> Leica bodies are probably subsidised by the lenses.
> >>> I believe that the reason the S system was MF was because the 
> >>> pricing
> is
> >>> dictated by the volume and they felt, quite rightly I am sure, 
> >>> that an autofocus 24x36 sensor Leica would not sell at S prices. 
> >>> The vast bulk
> of
> >>> the cost of something selling in these tiny numbers is R&D and
> tooling, not
> >>> the parts.
> >>> Comparing them with Rolex is inappropriate IMO too. Rolex make
> thousands
> >>> of times more watches than Leica make cameras. The movements are 
> >>> mass produced in an already-paid-for production line and haven't 
> >>> needed any
> R&D
> >>> for decades, the profit margins on seen-to-be luxury goods like 
> >>> this
> are
> >>> vast.
> >>> Marketing strategies are pretty flexible but the basic 
> >>> inflexibility of R&D, tooling and manufacturing an engineering 
> >>> product are nothing like those of luxury goods.
> >>> Frank D.
> >>>
> >>>
> >>>    On Saturday, 8 August 2015, 14:47, Jayanand Govindaraj < 
> >>> jayanand at gmail.com> wrote:
> >>>
> >>>
> >>>
> >>> John,
> >>> That they are, and I don't disagree, but your buying the stuff 
> >>> they
> make
> >>> new is just icing on the cake as far as they are concerned. Their
> primary
> >>> market and focus lies elsewhere, and, irrespective of what you 
> >>> think,
> I do
> >>> not fault them for that - on the other hand, I admire them as 
> >>> having
> taken
> >>> a quite brilliant business decision a decade ago. After all, they 
> >>> have
> to
> >>> survive by selling new equipment, not pandering to the wishes and 
> >>> requirements of those fans/users who are unlikely ever to buy 
> >>> Leica
> stuff
> >>> new. I am sure that over 95% of the Leica using photographers 
> >>> seldom
> buy
> >>> their Leica stuff new, and the production has to be sold, after 
> >>> all, so what choice do they have, but to take advantage of their 
> >>> hard earned goodwill built over decades of excellence, and market 
> >>> their products as bits of jewelry for whatever price the market 
> >>> will bear? Very sensible
> high
> >>> margin approach, which has worked very well over the last decade, 
> >>> but
> now
> >>> that the luxury market is flattening to reducing, we have to see 
> >>> what future path they take. Let us not forget that they have to 
> >>> run a
> business,
> >>> and make money on it. No different in approach from what a Rolex, 
> >>> a Montblanc or even a Mercedes/BMW would do - all of them have a 
> >>> large proportion of their allure tied up in the aspirational 
> >>> desires of
> humans -
> >>> but that does not mean they turn out anything but the best they 
> >>> can, at their price point. If you ask me, Leica's weakness in 
> >>> comparison to all their luxury peers is what seems to be 
> >>> relatively weak after sales
> service
> >>> - they probably get away with it because a large part of their 
> >>> yearly production is never used!
> >>>
> >>> I personally would also think very seriously of adding to the 
> >>> icing if
> they
> >>> come up with a full frame, AF system based on the M series, as has 
> >>> been rumoured, and they set up their dealership here in India by 
> >>> then, so
> that I
> >>> have a local outfit to handle problems if they occur.
> >>>
> >>> Cheers
> >>> Jayanand
> >>>
> >>>> On Sat, Aug 8, 2015 at 1:31 PM, John McMaster <john at mcmaster.fr>
> wrote:
> >>>>
> >>>> For a company that is doing all that, they seem to spend a lot of 
> >>>> time
> >>> and
> >>>> money making some of the best lenses available for any system.......
> >>>>
> >>>> john
> >>>>
> >>>> -----Original Message-----
> >>>>
> >>>>
> >>>> Adam,
> >>>> It has been blindingly obvious for a long time, to anyone who 
> >>>> does not
> >>> have
> >>>> his eyes wide shut,  that Leica has morphed into a luxury 
> >>>> marketing
> >>> company
> >>>> (have you ever bothered to notice WHERE they advertise nowadays?)!
> They
> >>> are
> >>>> opening boutiques in India now in partnership with the largest 
> >>>> dealers/purveyors of luxury goods here. However, there is hope 
> >>>> for
> them
> >>>> though, to change back into a photographic company, now that 
> >>>> luxury
> goods
> >>>> sales in China have drastically plunged across the board.
> >>>> Cheers
> >>>> Jayanand
> >>>>
> >>>>> On Fri, Aug 7, 2015 at 10:06 PM, Adam Bridge <abridge at mac.com>
> wrote:
> >>>>>
> >>>>> That?s even worse.
> >>>>>
> >>>>> AB
> >>>>>
> >>>>>> On Aug 7, 2015, at 9:12 AM, Douglas Sharp 
> >>>>>> <douglas.sharp at gmx.de>
> >>>> wrote:
> >>>>>>
> >>>>>> AFAIK Marketing is now the top level and covers customer 
> >>>>>> relations,
> >>>>> repairs, returns, complaints and technical matters.
> >>>>>>
> >>>>>> Cheers
> >>>>>> Douglas
> >>>>
> >>>>
> >>>>




Replies: Reply from richard at richardmanphoto.com (Richard Man) ([Leica] Minor additional woe)
In reply to: Message from jayanand at gmail.com (Jayanand Govindaraj) ([Leica] Minor additional woe)
Message from frank.dernie at btinternet.com (FRANK DERNIE) ([Leica] Minor additional woe)
Message from jayanand at gmail.com (Jayanand Govindaraj) ([Leica] Minor additional woe)
Message from Frank.Dernie at btinternet.com (Frank Dernie) ([Leica] Minor additional woe)
Message from jayanand at gmail.com (Jayanand Govindaraj) ([Leica] Minor additional woe)
Message from richard at richardmanphoto.com (Richard Man) ([Leica] Minor additional woe)