The Chips are Down

[humanized_form]

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everyone knows leica is late to the digital party, the story about the epson r-d1 motivating them to make an M, etc.... but really what could or should Leica have done differently to get a presence in digital camera land? manufacture cameras they didn't really believe in just to have a digital M or R camera out there? i think that would have damaged their reputation more than being late to the party did. what should leica's digital strategy have been considering their limited resources?

 

they take forever to do something but it usually is better and different than what everyone else is doing. i don't want them to be like canon or nikon etc and releasing the newest in new every year.

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[Bob Ross]

The "Made in Germany" moniker is obviously important to them. I visited the Porsche factory in Leipzig last year where they make the Cayenne. I say "make", but really what they do is install the (German made) engine into a completed bodyshell made by VW in Bratislava. But still, they like to think it's "Made in Germany".

 

It seems clear that most of what Solms does is lens production. This is the difficult bit. By comparison, mechanical camera production, even with a bit of electronics thrown in, quite a lot in the case of the M7, is nevertheless a known art. Portugal makes the sports optics and certain camera accoessories such as the M-winder but it sounded from this statement that there was a renewed emphasis on building cameras in Germany and using Portugal as a manufacturing facility to meet both Leica's needs and provide a revenue stream through outsourcing.

Hi Mark,

I googled around to see what I could find on the Portugal location and found an old blurb on Photonet, that gave the name Leica Aparelhos Op Precisio S.A. in Villa Nova de Famalicao, Portugal. Apparently the M6, R6.2 & R7 (at that time) were assembled there and shipped to Solmes for final testing. Cameras were no longer labeled Made in Germany but showed Leica GMBH Germany. I checked my R4s and it wasn't made anywhere...LOL. The Portugal factory also makes micrscopes for the "other" Leica.

Bob

[marknorton]

Thanks Bob, interesting information. At the time it was setup, Portugal will have been a much cheaper place to fabricate parts and sub-assemblies and to make the cameras than Germany. The interesting thing about an M6 is that the inner structure of the camera carrying the shutter and viewfinder slides out - 5 screws, 4 under the leather, so I can quite imagine these being made in Portugal and then shipped to Solms for alignment and "packaging" in the housing. I seem to remember reading the metal shutter is made in Portugal.

 

Someone on the old forum posted a link to the family owned metal fabrication company in Germany who make the top covers for the M - they listed the Leica M as a "reference" product but unfortunately I can't find the link.

 

Nowadays, the cost difference between Germany and Portugal will be rather less, still there though because Germany remains one of the most expensive places in the world to employ people to do anything so there has to be real value-add in what they do.

 

Many companies are moving their production of items lower down the food chain east to the new countries of the European Union, just like my example of Porsche/VW; buy a replacement Bosch car headlight and it's now more likely to be made in the Czech Republic than Germany. External manufacturers are also finding it's good to manufacture in the EU because of free movement of goods between countries. A Panasonic TV I have is made in the Czech Republic, a Sony DVD recorder is made in Hungary.

[ho_co]

Agreed, the only way the dealers can justify their markups is by offering loaner cameras and lenses. If all they want to do is shift product, I'll buy from Hong Kong and save 25%.

 

I'm not recommending an "I want it cheapest" strategy. I can't speak for everywhere, but where I live in the US, very few dealers will take the time to explain why it's worth paying more for a Leica. As you say, they are just turning inventory, and many don't even offer loaners. I'm willing to pay more if I get more--longer warranty, more accurate information, help when I need it. I like walking out of a dealership with a new toy in my hand. Er, scratch that. Make it "a new tool in my hand."

 

That's not to say I think list price is the best price. I figure the dealer should meet me half-way, but I definitely want him to be there next time I need him--like when the M8 comes out.

 

The Apple stores have been very good for Apple because they have knowledgeable people who can explain (analogizing) why putting anti-aliasing in firmware is better than adding two more surfaces to the ray-path. Most camera stores I know can't answer a lot of questions about the products they stock, let alone those (like Leica) that you have to force them into ordering for you.

 

My point wasn't intended to be anti-dealer, but to recognize Leica's problem, viz: selling a superior product when everyone seems content if it's stamped out of plastic and made in Thailand. In other words, I think Leica is simply responding to the market situation and saying, "Okay, we'll open our own stores."

 

What I really hope is that the Leica stores are as inviting as the Apple stores; I hope they don't go overboard on "posh."

 

--HC

[Guest stnami]

The main problem with apple stores in Oz and Asia is that they are full of young PC guys learning about macs, most give up on the job. So this strategy doesn't work well in small markets

[marknorton]

Certainly if Leica want to appeal to a broader market, they should not do "posh". It would be pointless if someone coming in for a C-Lux 1 felt intimidated. They should be welcomed for their interest. Leica is some way off having the brand awareness that Apple has though!

 

As regards dealers, I was thinking about the expected 15mm f2.8 recently. Unlikely to be an automatic must-have purchase at the expected price and I would expect a dealer after my business to have a loaner for me to try for a weekend before commiting. But if all they want to do is sell it and pocket the $1000+ profit in selling it, I'm not interested, I want a discount instead.

[grober]

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M8 already on order.

 

Cost: trip to Solms for LHSA meeting + M7 + Motor M + one sacrifical Leica tele lens I haven't chosen yet.

 

Some flavor of Bessa will shortly become the primary M-body film camera at this address.

 

Just like Solomon's choice: which baby do you cut apart?

 

BUT, on the plus side, all that lovely Leica glass continues to have life!

[george +]

There is lots more to the Leica story than the excellent references above highlight.

 

I respectfully recommend that you read the entire text on the Leica site. Despite the fact that the childish Babelfish like translation is irritating. But that is what Leica does all the time. Maybe the new marketing guru will see to fixing this sad example of unwarranted nonchalance.

 

As to the speach, they seem to have replaced the entire management structure. Read it, there is a lot more there.

[lct]

Read here:

http://www.rangefinderforum.com/forums/showthread.php?t=24434&page=3

 

I'm Andreas Kaufmann, managing Director of ACM Projektentwicklung Salzburg, Austria. As ACM Projektentwicklung is owned by the family Kaufmann and is not a Private Equity Fund, a Venture Fund or whatever fund, our intention is a longterm industrial strategy. We want help to create a Leica Camera which is able to produce and sell exciting future products. Good products and satisfied customers enable a good future for Leica.

 

You're absolutely right, the patient is recovering, and we should not forget that Leica Camera never stopped spending quite a lot of money for research and development.

 

Contrary to public belief Leica has a track record on digital cameras for ten years, which means the M8 is just a necessary consequence. The M8 will be a superior and unique camera, and there are other interesting things in the pipeline.

[ho_co]

Certainly if Leica want to appeal to a broader market, they should not do "posh". It would be pointless if someone coming in for a C-Lux 1 felt intimidated. They should be welcomed for their interest. Leica is some way off having the brand awareness that Apple has though!

 

As regards dealers, I was thinking about the expected 15mm f2.8 recently. Unlikely to be an automatic must-have purchase at the expected price and I would expect a dealer after my business to have a loaner for me to try for a weekend before commiting. But if all they want to do is sell it and pocket the $1000+ profit in selling it, I'm not interested, I want a discount instead.

Mark--

 

Well said on all counts. And with the iPods, Apple has a batch of (relatively) low-priced, 'hip' AND in-demand products to bring people in. I think my "Apple Store" analogy holds only superficially.

 

And you're certainly right about the 15mm--I tremble to think what that will cost! Even the Zeiss lens is way outside their normal price line. Although I'm not familiar with Leica's current dealer pricing, I do know that their dealer margins are a lot slimmer than those of many other companies. Your $1000+ figure may be high, but I don't know.

 

The only thing I might say to counter your argument (I worked in the photo business in both retail and wholesale for a number of years) is that Leica doesn't make it easy for the dealer: When there's a new product, it is usually not easy to get. If a dealer gets one sample of the lens, has ten customers lined up to spend the money, and two working pros who want to test it first, the dealer will have to think twice before loaning it out. That's the advantage of having a good relationship with a dealer ahead of time--but from your and my point of view, that may mean wading through a lot of muck that we haven't time or stomach for.

 

There's another issue that the dealer has to be aware of. When I was in retail, we had one customer, a very nice guy trying to establish himself as a professional photographer, who came in quite often to borrow some of our more exotic equipment. We finally had to face up to the fact that the loans were not resulting in sales and stop loaning to him. Some dealers' "moocher-alarm" might go off too early instead.

 

That was in a smaller market area. With a larger outlet than ours was, the dealer can be more flexible. And with prices as high as they are now, flexibility becomes a greater necessity for us consumers.

 

I agree completely with your points; maybe what I've said here will help understand it from the dealer's side as well. There are good dealers and bad dealers. I think in most cases, time weeds out the bad ones. And I guess that's where the idea of Leica Shops comes in. I think you've helped me clarify my thinking!

 

Thanks.

 

--HC