Mike Hatam wrote:
Why do you think that the price of a camera should be correlated to the cost of producing it? That has never been the case.
The price is driven by other market factors - competitive offerings, and supply/demand.
How many competing full-frame cameras does Canon have to worry about?
Why do I think the price should be related to the cost? Hmmmm, let me think, Oh, I know, maybe because I've worked for so many high tech companies in mktg/sales/development/etc and that influences my thought process is my best guess.
But as to the real reason for this - and this is not what I was talking about - it comes down to what you said or how many FF competitors does Canon have to worry about? The answer is none. Not a single one, and that's the reason we pay $7-8k for a 1DsMkII. If you have the only game in town, then you set the price as you please once you've surpassed your minimum mktg/sales/margin multiplier. In my previous example, I used a mktg multiple of 3x; Canon may use one higher or lower for their standard pricing model (I'm betting higher) but I really don't know what it is.
Canon has done as they please at the high end pricing because they could and they wanted to keep the 1 series club exclusive. They're allowed to recoup development costs of course as any company would. I don't think that's always going to be the case and competitors may one day enter the market but I never count on Nikon to do anything in particular.
As for the people that have always insisted the cameras were Sooooo expensive to produce Canon had to charge $8k, they're just plain wrong and have been for quite a while. This all gets hard to prove without specific information from Canon, but they'll never release their numbers. I've sold things for $20k+ that cost my company between $3-$4k. Just the way it works when there's no competition in my experience.
Somebody who doesn't understand business economics wrote:
According to a photographer who just happens to work as a production engineer in the semiconductor industry, the full frame sensor should only cost Canon about $350 more than the 1.6 sensor to make. Things have changed!! See http://www.naturescapes.net/092006/ej0906.htm So if they really wanted to Canon could make a 30D follow up for about $400 more than the list price of a $30D and still make a profit.
Something that costs the manufacturer X does not cost the consumer 15 percent more. A more realistic markup is double, because of distribution and retail costs.
Why is almost everyone presuming that canon has a monopoly on FF, and that nikon is eons off from having a FF camera in production? I'm betting canon's ceo's don't think so. They not in the position they are in by making such blunders and resting on thier behinds.
If canon has gained an advantage by being the first into FF dslr's, then they've got to stay ahead by offering improved FF offerings.
I agree the $350 for the chip is fine, what costs money (similar to the chip) is the view finder, AF system, shutter and mirror. The following is larger than the 30D, the VF, shutter and the mirror this is not trivial.
My prediction, a cheap 5D now called the 4D, replacing the 30D, a new 5D called 5DmkII which hopefully will have 45pt AF and weather sealing.
kleinssz69 wrote:
Why is almost everyone presuming that canon has a monopoly on FF, and that nikon is eons off from having a FF camera in production? I'm betting canon's ceo's don't think so. They not in the position they are in by making such blunders and resting on thier behinds.
If canon has gained an advantage by being the first into FF dslr's, then they've got to stay ahead by offering improved FF offerings.
True, they're in the front of the pack because they've invested the time, money, and engineering skills necessary to get there. They've stayed there because there is no other company that can produce a FF sensor. Yet.
If someone was working on it, I would think there would be some leaks, but I've read nothing. Yes, I've talked to sponsored nikon shooters that said they would have something this year, but those probably would not be based on Sony chips. I have no idea if it's true but who else can do this?
jamesf99 wrote:
As for the people that have always insisted the cameras were Sooooo expensive to produce Canon had to charge $8k, they're just plain wrong and have been for quite a while. This all gets hard to prove without specific information from Canon, but they'll never release their numbers. I've sold things for $20k+ that cost my company between $3-$4k. Just the way it works when there's no competition in my experience.
So you've admitted you don't have any idea what the numbers are, and yet you assert everyone else with a differing opinion is wrong? I get so tired of people insisting camera companies should somehow emulate the disposable hi-tech industries like cell-phones, computers, etc. The fact is you know no more than anyone else what actual costs, margins, R&D outlay, or any other factors that play into Canon's pricing structure are. I design surgical power tools and other medical products for a living, so on the basis of a perfunctory look at parts, a surgical bone saw looks no more complex than a $50 Home Desperate special. The prices are greatly disparate at retail, but that isn't because we have 10 times the mark-up, it is because we spend a lot more in most areas, and it is an economy of scale.
Regardless, I don't see the 40D (or whatever its called) having FF.
Someone mentioned "from a friend of a friend" Canon is considering splitting the 5D line in August. Well, if releases are in August, they aren't thinking, the products have been in the pipeline for some time.
Gerry Szarek wrote:
I agree the $350 for the chip is fine, what costs money (similar to the chip) is the view finder, AF system, shutter and mirror. The following is larger than the 30D, the VF, shutter and the mirror this is not trivial.
My prediction, a cheap 5D now called the 4D, replacing the 30D, a new 5D called 5DmkII which hopefully will have 45pt AF and weather sealing.
I use the most competitive top of the line camera I can think of when I judge pricing vis-a-vis the 1DsMkII. IMO that camera is Nikon's flagship, the D2Xs, which commonly sells for $4k. Nikon packs it with features Canon doesn't provide including GPS capability, built-in flash controller, etc. and they have to BUY the chip from Sony. Sony is making money on it, so what's Nikon doing? Are they selling the camera at a loss? I really don't think so, but.
OK, so what do you get with a 1DsMkII besides the best FF sensor available? It supports dual media, but I can't think of anything else the Canon does that Nikon won't. You're left with assessing the 1DsMkII's dual media support and FF chip for an additional $4k cost, Seems a bit on the high side to me.
Note: all my whining about price doesn't mean I won't go out and buy another Canon, but I wanted to buy the next one if I was close. I'd just like to see Canon make it a little more reasonable this time, and add in some important features that they've held back so far like better flash control. I don't think I'd use it because I don't it would work with studio strobes, but it would be nice to see for those that can use it.
Hammerli wrote:
So you've admitted you don't have any idea what the numbers are, and yet you assert everyone else with a differing opinion is wrong? I get so tired of people insisting camera companies should somehow emulate the disposable hi-tech industries like cell-phones, computers, etc. The fact is you know no more than anyone else what actual costs, margins, R&D outlay, or any other factors that play into Canon's pricing structure are. I design surgical power tools and other medical products for a living, so on the basis of a perfunctory look at parts, a surgical bone saw looks no more complex than a $50 Home Desperate special. The prices are greatly disparate at retail, but that isn't because we have 10 times the mark-up, it is because we spend a lot more in most areas, and it is an economy of scale. ...Show more →
Sorry it bothers you but yes, I've made the assertion that I think my pricing estimate is closer to reality and will comfortably continue doing so. While I don't have bio-medical engineering experience, as you apparently do, I do have semiconductor manufacturing experience. I'm also aware of how these companies price their products, including my experience buying from Canon when I worked for HP.
Am I 100% sure of the costs? No I'm not and I've freely admitted that. Do I think I'm way off base as you do? NO, I don't, but I will assert that you can't make any counter claims because you don't have the experience in the industry, the manufacturing field, or with the company as far as I know. I don't need anyone to tell me that it costs around $10k to build an SUV that will sell for $25-30k though, even though I've never worked in the industry. It's magic right? Sorry, it's called research.
Someone mentioned "from a friend of a friend" Canon is considering splitting the 5D line in August. Well, if releases are in August, they aren't thinking, the products have been in the pipeline for some time.
None of us knows what will happen and I've said this in all my posts. I can't prognosticate, I can only guess.
Edited by jamesf99 on Jan 24, 2007 at 03:55 PM GMT
Mark Shaxted wrote:
If 4 in Japanese is si (pronounced like "she") and Canon release a 4D, does that mean it'll be a Canon 'Shed'?
I think there's some hidden meaning in there somewhere...
It would be pronounced either "shee dee" or "yon dee" (doubt this will happen though because of the issue with the first pronounciation sounding like death). Maybe some South Park City-Wok type jokes would be more fitting...
mhecker wrote:
According to a photographer who just happens to work as a production engineer in the semiconductor industry, the full frame sensor should only cost Canon about $350 more than the 1.6 sensor to make. Things have changed!!
So if they really wanted to Canon could make a 30D follow up for about $400 more than the list price of a $30D and still make a profit.
Full frame xxD for $1699 MSRP equals D200 killer?
The question is will the marketing people let them!!!
Stay tuned for further details.. :-)
I wonder if the author of that article has considered all aspects of the sensor production process. I would venture to say that considering the inclusion of microlenses and other necessary chip modifications, sensors are a bit more complex (or at least very different) than ordinary processor-chip manufacturing.
I will also project that the cost of full-frame sensors has dropped significantly over the last year or two, as production methods are improved and modified. But I don't think that the difference is as small as stated in this article. I couldn't rule out a $1700 full-frame camera, but it would most likely have many corners cut IMHO.
I still don't see the xxD series going full-frame anyway. Too many people in the market want the 1.6X sensor. With the 17-55 and 10-22 EF-S lenses, Canon has made a significant investment in the format. Such lenses indicate that Canon's not abandoning that size.
Canon's a big company - if anybody can afford to support multi-format SLR cameras, Canon's the one. Particularly when there's plenty of interchangeability among the lenses and accessories.
Tom - E.J. is a product yield manager at Intel, has been for 23 years. He's a co-founder of NatureScapes, where the article is found. He's well known, and has cred, has authored many technical articles on digital photography.
I'm aware of his credentials, and I acknowledge them. I've read a bit of his articles and posts. But his article has to be reconciled with Canon's white paper on full-frame sensors here:
Now, I'm not really going to argue against E.J. on the technical attributes of his article because I can't do so. Chips, to me, are made from potatoes and come from Snyder's of Berlin.
But I can bring up the possibility that there's more to the picture. Throwing in the proverbial "grain of salt" into the overall discussion.
I wonder if the author of that article has considered all aspects of the sensor production process. I would venture to say that considering the inclusion of microlenses and other necessary chip modifications, sensors are a bit more complex (or at least very different) than ordinary processor-chip manufacturing.
I will also project that the cost of full-frame sensors has dropped significantly over the last year or two, as production methods are improved and modified. But I don't think that the difference is as small as stated in this article. I couldn't rule out a $1700 full-frame camera, but it would most likely have many corners cut IMHO. ...Show more →
His argument seems entirely plausible to me; that being sensor cost is 10x as much, but the vast majority fixate on one aspect, which the author did not. See this quote from the above link: "In addition to the dramatic increase in sensor cost with sensor size, other components of the camera will also cost significantly more. The buffer memory generally has to be more and often faster or with more channels from the sensor to the memory to maintain the frame per second rate that we photographers require. The mirror box is larger and requires more sophisticated mechanics and electronics operating at tighter tolerances. All of these add up. Finally, due to the higher cost of manufacturing, and therefore, the higher retail price, the volume will be lower so there are fewer cameras to amortize the development cost against which also adds significant cost to a full frame sensor camera over an otherwise equivalent cropped frame camera."
People constantly try to boil this down to a simple yield equation with no other variables in pricing, which is just plain unrealistic. I have no doubt we'll see a $1500 or less FF body from Canon; it just won't be in the next 2 years IMO.
10DFT wrote:
I'm aware of his credentials, and I acknowledge them. I've read a bit of his articles and posts. But his article has to be reconciled with Canon's white paper on full-frame sensors here:
Admitting that FF sensors are not expensive to manufacture is admitting that most of the outrageous 1DsII price is in fact a big fat profit margin
The 1Ds (I and II) prices were established when Canon started manufacturing FF sensors more than 5 years ago. Unless Canon are complete amateurs, manufacturing effectiveness must have been improved at least 10 folds.
gml1 wrote:
Admitting that FF sensors are not expensive to manufacture is admitting that most of the outrageous 1DsII price is in fact a big fat profit margin
The 1Ds (I and II) prices were established when Canon started manufacturing FF sensors more than 5 years ago.
You really don't know. For one thing, Canon could have been selling them at a loss when first introduced and only now just catching up. You really have no way of knowing.
gml1 wrote:
Unless Canon are complete amateurs, manufacturing effectiveness must have been improved at least 10 folds.
I suspect you are a complete amateur or worse in the field of semiconductor manufacturing. It is a common mistake when people assume that since computer memory prices come down so fast that sensor prices must also do so. Memory prices decline due to greater miniaturization. People don't make the connection that sensors are a completely different issue because the sensor size can't be miniaturized, and miniaturizing the pixel size does not decrease price but only increases noise. Full frame sensors were 24x36 mm a few years ago and are 24x36 mm today and will be 24x36 mm three years from now.
gml1 wrote:
[. . . . Unless Canon are complete amateurs, manufacturing effectiveness must have been improved at least 10 folds.
Don't forget that both the 1D2N and 1Ds2 have seen major price drops
lately - - especially the 1Ds2. At B&H (with code PSJAN) you can find
the 1D2N for $3414, and the 1Ds2 for $6749. That's a $585 and $1250
drop respectively. That either means it has gotten cheaper to make them,
or they will be replaced soon. Or maybe it just means they want to try
to sell more by lowering the price point.
Monito wrote:
I suspect you are a complete amateur or worse in the field of semiconductor manufacturing. It is a common mistake when people assume that since computer memory prices come down so fast that sensor prices must also do so. Memory prices decline due to greater miniaturization. People don't make the connection that sensors are a completely different issue because the sensor size can't be miniaturized, and miniaturizing the pixel size does not decrease price but only increases noise. Full frame sensors were 24x36 mm a few years ago and are 24x36 mm today and will be 24x36 mm three years from now. ...Show more →
Plasma TVs didn't shrink in size either but their prices dropped 10-15 times for the last 7-8 years.
I am talking about manufacturing efficiencies, not shrinking die sizes. Initial investments had to be recouped and manufacturing certainly had its flaws, which could have justified the high initial prices. More than 5 years later, though, these cameras still cost basically the same (unless you consider 15% a massive discount).
Also, as an expert in semiconductors, you must be well aware than sensors are extremely simple devices (compared to CPUs, for example), so manufacturing them is not exactly a rocket science (in relative terms again).
gml1 wrote:
Plasma TVs didn't shrink in size either but their prices dropped 10-15 times for the last 7-8 years.
The Pioneer Elite I bought many years ago cost $10,000. The new Pioneer Elite 1080P Plasma (same 50" size) I just ordered is also going to cost me that same figure. I can go buy a piece of crap Vio or something like that for $1500 or less at Sam's club. It doesn't compare in any way to the Pioneer other than the fact it too is a 50" plasma. Don't confuse the appearance of cheap products with something that was expensive becoming inexpensive, they are two separate concepts.
A camera's price isn't dictated by a single criteria, and if anything, parts costs are likely to have risen as manufacturing efficiency has increased, and I'm not convinced they've improved efficiency to the extent you seem to think. Refinements to AA filters, microlenses, etc. aren't necessarily likely to reduce sensor cost. Advancements in a myriad of areas don't always correlate to reduced costs.
Edited by Hammerli on Jan 24, 2007 at 06:32 PM GMT
