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Archive 2012 · Camera producers death spiral
  
 
rattymouse
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p.2 #1 · Camera producers death spiral


FlyPenFly wrote:
Same thing happened with TVs... only Samsung is really making all that much money now. Sony is not making any money on it and neither is any Japan heavy company.

About the only companies immune seem to be Fuji and Leica.


Fujifilm's imaging division has lost money 4 straight years.




Nov 20, 2012 at 09:13 PM
FlyPenFly
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p.2 #2 · Camera producers death spiral


Digital or Film?

I mean, it's only recent they had any sort of hit with the X100. I have a strong feeling the X101 will be something I'll probably own and will be in short supply on release.



Nov 20, 2012 at 09:25 PM
rattymouse
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p.2 #3 · Camera producers death spiral


FlyPenFly wrote:
Digital or Film?

I mean, it's only recent they had any sort of hit with the X100. I have a strong feeling the X101 will be something I'll probably own and will be in short supply on release.


Both. The imaging group comprises both film and digital cameras and it hasnt made any money in a long time.




Nov 20, 2012 at 10:46 PM
navyasw02
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p.2 #4 · Camera producers death spiral


This article wasted a few minutes of my life telling me the two things that are fundamentals about consumerism: 1. Customers love shiny new objects and 2. Things are worth what people are willing pay


Nov 21, 2012 at 07:01 AM
Beni
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p.2 #5 · Camera producers death spiral


Perhaps this is why the price is so high right now on newer gear? That said, in the video world, the GH2 at that price is incredible!


Nov 21, 2012 at 07:12 PM
anthonygh
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p.2 #6 · Camera producers death spiral


The reason prices are high on new gear is there are too many people with more money than common sense...and the big companies know it and release products at prices these customers willingly pay.

If no one bought then the products would be released at their real market price.....which is normally arrived at within a few months of release.


The big companies have another trick that works as well...convincing people who have perfectly good equipment that once a new model is released their current kit is suddenly inadequate.



Nov 23, 2012 at 02:34 AM
Delatant
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p.2 #7 · Camera producers death spiral


With one million new people, worldwide, each year joining the photography hobby, it is hard for the producers of equipment to not take advantage of the situation. And to be fair, the keen competition is bringing better and better products to the marketplace each month. Good glass is a long and tedious process to manufacture. Developing a great light capturing computer to hang the glass on, so we can have brilliant colors, stop action, excellent flow of transition, and sharpest of edges (just to name a few points), requires precision of great magnitude. I think we have become a user that is so used to near perfection, that we often lose sight of what is involved in every camera and lens.

Having said that, I see many camera/lens/products that are seemingly rushed to market with a high price just so the company can capitalize on the current demand. I don't mind paying a quality price for a high quality product. What I dislike is seeing a company spending more money on advertising an inferior product than what is actually in the product itself. These high profile products with low quality output commanding a high price is what gets my goat! But hey, if the new users want to be taken advantage of, that is their problem.

I am just so thankful that today's cameras are that are "light" years ahead of my original Argus C4!! And because of these advances, photography today is a lot more fun, expressive, enjoyable - and without film processing cost, less expensive - than EVER before! Thank You Thank You Thank You Photography Industry!!!



Nov 25, 2012 at 02:07 PM
Exdsc
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p.2 #8 · Camera producers death spiral


Personally I'm tired of Canikon monopoly, Sony's monopoly on sensors, Fuji's semi-competent cameras and M4/3 cash cow. In fact I'm tried of Japanese monopoly on camera making.



Nov 25, 2012 at 02:55 PM
JimUe
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p.2 #9 · Camera producers death spiral


i agree, that article was a waste of time.

it's naive to expect bodies won't come down in price as much as it is to expect computers, or cell phones or automobiles won't come down in price.

you can get an Iphone 4 for $0 with a contract now. Is there an over capacity in smart phones?



Nov 25, 2012 at 03:38 PM
jerrykur
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p.2 #10 · Camera producers death spiral


It is interesting that he ignored Olympus and the OM-D. I want to find one of those at 50% (even 10% would be great) off list. If he want to look why Panasonic GX-1 prices have crashed he need look no further.



Nov 25, 2012 at 04:55 PM
 

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cyberstudio
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p.2 #11 · Camera producers death spiral


Thom (understandably) looks at this topic from the standpoint of the end-user and the market. From the standpoint of a manufacturer, it is next to impossible to predict sales accurately but the producer wants to manufacture a boatload of some gadget and then free up the production line to work on something else. When your competitor is in stock but you are out you always lose your entire share of the pie regardless of how technically superior you are, so a manufacturer has every incentive to err on the aggressive side. What we are seeing is the inevitable outcome of free market at work. Short of the manufacturers colluding the market will always have glut instead of shortage.


Nov 29, 2012 at 06:32 PM
rattymouse
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p.2 #12 · Camera producers death spiral


JimUe wrote:
i agree, that article was a waste of time.

it's naive to expect bodies won't come down in price as much as it is to expect computers, or cell phones or automobiles won't come down in price.

you can get an Iphone 4 for $0 with a contract now. Is there an over capacity in smart phones?


Wow, you really miss what is going on here. Your iPhone costs $0 WITH A CONTRACT. That means the phone company is shelling out the money. The phone is not free.

This analogy fails completely when compared to cameras.



Nov 29, 2012 at 10:15 PM
rattymouse
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p.2 #13 · Camera producers death spiral


cyberstudio wrote:
Thom (understandably) looks at this topic from the standpoint of the end-user and the market. From the standpoint of a manufacturer, it is next to impossible to predict sales accurately but the producer wants to manufacture a boatload of some gadget and then free up the production line to work on something else. When your competitor is in stock but you are out you always lose your entire share of the pie regardless of how technically superior you are, so a manufacturer has every incentive to err on the aggressive side. What we are seeing is the inevitable outcome of
...Show more

Inventory costs money. Serious money. Money locked up in raw materials, labor, storage, etc. Smart companies will not go for sales at all costs. What if those extra sales fail to cover the costs of inventory? What then is gained? One of the most current trends in manufacturing is inventory control because excess inventory can cost millions of dollars or even tens of millions of dollars.



Nov 29, 2012 at 10:18 PM
rscheffler
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p.2 #14 · Camera producers death spiral


anthonygh wrote:
The reason prices are high on new gear is there are too many people with more money than common sense...and the big companies know it and release products at prices these customers willingly pay.


No doubt this an aspect of it. As is the frequency of product refreshes.

But maybe these companies also recognize the trend towards phone-cameras and the likelihood that higher profit areas, such as DLSRs and lens sales will eventually significantly decrease as a consequence.

Higher current prices may be an attempt to get all they can now, but also an anticipation of, and a gradual easing into a future with much lower volume, when production costs per unit will be higher and manufacturers will have no choice but to try to raise prices further, assuming there are still customers who want to buy top-end gear.

As an example, I'm thinking of Canon's new super-tele lenses, all of which are in the range of 40-50% higher prices than the previous generation (at time of discontinuation). I'm sure there are a number of factors - USD-Yen rate, cost of materials, R&D costs, production issues (earthquake/tsunami)... but also changes in the market. After a decade of 'bargain' super-tele prices, the user base is pretty saturated. Meanwhile, certain industries, such as news, which were always big spenders on top end gear, are hurting. Budgets are reduced, staffing is lower, lower end gear is 'good enough' in many cases... As a result, fewer buyers and lower sales from those buyers. Though anecdotal, what I see on sports sidelines at 'average' pro league events covered by freelancers and daily news photographers (as opposed to world elite events where the representation is skewed), is an abundance of older gear and a very small percentage of current generation super-teles. Everyone still uses DSLRs at these events, but give the technology a few years, and maybe it will be m43 instead, or some other CSC, where a 200/2.8 will be good enough and the need for a $10K 400/2.8 will be further reduced.

For Canikon to continue offering increasingly specialized, low volume equipment, prices will increase further.



Nov 29, 2012 at 11:01 PM
michaelwatkins
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p.2 #15 · Camera producers death spiral


rattymouse wrote:
Wow, you really miss what is going on here. Your iPhone costs $0 WITH A CONTRACT. That means the phone company is shelling out the money. The phone is not free.

This analogy fails completely when compared to cameras.


Agreed. You aren't buying a phone, you are signing up to a service agreement.

The cell phone service providers product is not a phone but a service with a finely tuned billing arrangement. My telco customers were fond of saying their product was the monthly bill they sent to customers.



Nov 29, 2012 at 11:05 PM
cyberstudio
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p.2 #16 · Camera producers death spiral


rattymouse wrote:
Inventory costs money. Serious money. Money locked up in raw materials, labor, storage, etc. Smart companies will not go for sales at all costs. What if those extra sales fail to cover the costs of inventory? What then is gained? One of the most current trends in manufacturing is inventory control because excess inventory can cost millions of dollars or even tens of millions of dollars.


Of course, no one on earth would want to sit on excess inventory that couldn't be sold or could only be sold at a heavy discount. It is just that for many industries, most notably semiconductors (think the sensor business of Sony, for example), the cost of switching the production line to work on something else is exorbitantly high, whereas the inventory involved is rather compact therefore relatively inexpensive to store.

Cameras (and perhaps personal electronics in general) are also harder to switch production than to hold inventory. Selling price/inventory cost is much more favorable for cameras than for example cars or apparel.

So, right at the beginning you almost need to predict how many units will be sold over the entire product life cycle. Historical data and projections can offer some guidance but at the end of the day this prediction cannot be done with a great degree of accuracy.



Dec 02, 2012 at 02:53 PM
Bifurcator
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p.2 #17 · Camera producers death spiral


rattymouse wrote:
No one is getting 70% margin on cameras. That's a fantasy.

MarcG19 wrote:
...there's no way consumer cameras (P&S, low end DSLRs) make anything close to a good profit margin, especially if bought at discount. (that being said, I'd imagine the tops of the line have good profit margins).


Living in the once manufacturing capitol of the world as I do I'll have to disagree. Only I would say that if purchased factory direct they could be making a profit margin after about $50 on what is typically a $1k model. The problem is they have to keep exec bonuses up high and accumulate safety nets and such like that.

I used to do something similar myself. I had a product manufactured in China for a little less than $1ea, which I paid $3 each for (plus $1ea for shipping) and sold here for $30ea. I could sell only about 100 to 150 a day and only 8 days a month but that is pretty typical of the manufacturing scene. Cameras aren't much different even though most of us here pedestalize them. If we count only materials (including the robots and electricity used in the process) and engineering I guess the typical $1k camera costs around $20ea to produce. At roughly the numbers they are currently sold in I guess all that could be paid for and with some profit margin showing, if they sold on the streets (factory direct) for about $50ea. But again after the middlemen and the retailers, and the marketing & ad men, and the exec bonuses and the insurances, and the distribution chains - shipping and etc., and everything are all paid then we start seeing where all this money is really going. With full considerations accounted for the typical $1k camera needs to be sold for just about $1k (20%) for them to continue doing business and making cameras.

If you want the prices lower you're going to have to ask for a different business model from the manufacturers. Ads by word of mouth, horrifically smaller (dangerously sized) corporate footprints, and so on and so forth. And I guess no one is going to go with that. Most of the big corporations like Sony, Panasonic, Olympus, Hitachi, Samsung, which I have worked inside at the executive level, are not just interested in the seemingly altruistic endeavor of making a good/fun product for a reasonable (affordable to all) price. They're much more concerned with country building, offering a vehicle of support to as large a portion of the endemic community as possible, and keeping the economy afloat - which in the end may actually be much more altruistic.

So until very small companies begin to offer great cameras there's just about no hope of seeing what are currently $1k cameras being initially offered for the $400 we all think they're really worth. There is a consolation to this however. After a particular model has paid for itself (plus alpha) or if they can't move them, we get to see the prices radically reduced. So if we can wait 2 years after a release then (in many cases) your $1k camera can indeed be had for that $400 or so you're wanting to spend.

It doesn't mean that cameras need to cost a lot, or that profit margins are low, or that when a section of a corporation files in the red it's actually true, or that models similar to the current ones couldn't be sold for 75% less and still show a profit... It just means that with the current economic systems and corporate structures we're dealing with they can't.




Dec 02, 2012 at 03:54 PM
anthonygh
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p.2 #18 · Camera producers death spiral


Remember when photography was for enjoyment and not gear acquisition?

Not many can I suspect....the camera makers have skillfully created a mindset that now makes individuals permanently dissatisfied with their current gear....hell...a new camera is hardly in the shops and it is either being pulled to pieces or is the basis for speculating about the next 'upgrade'.

As for aesthetics.....the camera makers have created another mindset.....a photograph's 'quality' is measured purely by how well a camera can resolve detail, shoot in the dark, or perform some other technical task.

The real fear for them must be an Emperors Clothes moment.....suddenly people realizing they already have the gear to enjoy photography...or they can get it s/h for far less than the new stuff. Or...ultimate horror....people realize that the latest and greatest gear isn't actually leading to better photographs being taken unless measured by some minute increase in resolving power or dynamic range.

I wonder what is really the most beneficial...a $1000 on that 'better' lens...or $1000 on a quality photo holiday somewhere with the current gear. It is easy to know what the camera manufacturers will be hoping for....



Dec 05, 2012 at 02:11 AM
Bifurcator
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p.2 #19 · Camera producers death spiral


anthonygh wrote:
Remember when photography was for enjoyment and not gear acquisition?



I'll date myself by admitting that I bought the very first mass produced 35mm SLR when it first came out.

It was about gear acquisition then too. It always has been! At least in part. Pretty much about like it is today. Not much has changed in that regard.



Dec 05, 2012 at 10:29 AM
MarcG19
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p.2 #20 · Camera producers death spiral


Bifurcator wrote:
Living in the once manufacturing capitol of the world as I do I'll have to disagree. Only I would say that if purchased factory direct they could be making a profit margin after about $50 on what is typically a $1k model. The problem is they have to keep exec bonuses up high and accumulate safety nets and such like that.

I used to do something similar myself. I had a product manufactured in China for a little less than $1ea, which I paid $3 each for (plus $1ea for shipping) and sold here for $30ea. I could sell only
...Show more

OK, I'll buy this conceptually. If you just look at Cameta Camera's price in the US, and assume that price for refurbished models of a certain price point is reflective of the camera company's cost (bad assumption but good enough for these purposes), a refurbed NIkon D3100+kit lens is $414 while the D3200 is $600 new. This would represents a $185 difference (around 40%) that one assumes merely represents Nikon USA's share of the profit from the sale of the new kit camera+lens.

That being said, I'd imagine Nikon's design and engineering costs add significantly to its per unit price for a given camera. And given the complexity of a DSLR (so many screws and specialized parts), I'd imagine it costs more than $20 a camera for Nikon Japan (mirrorless cameras are a different story, much less complicated as shown by lensrentals, and this is part of what irks this Oly EM-5 user about the EM-5).

But you are right, almost certainly the lion's share of a camera's per unit price goes to designers, factory tooling/setup, personnel costs, pensions, corporate jets, yakuza and who knows what else.



Dec 05, 2012 at 11:30 AM
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