Spiller interview in Welt Online

[andybarton]

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Hopefully a M10 and a platic low cost FF "M" camera.

 

Why buy the M10 when you can buy a cheap plastic one? What would be the point? Are your M10s a-la-carte only?

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[Guest BigSplash]

Why buy the M10 when you can buy a cheap plastic one? What would be the point? Are your M10s a-la-carte only?

 

Honestly speaking if I had just received a nice fat bonus cheque (as happens) I'd buy the M10 and be labelled a rich snob on this forum ...I know many wealthy people, royalty, celebreties etc.will do exactly that and get enjoyment of having the best. Bankers that enjoy these fabulous "well deserved" bonuses that we read about will surely buy the M10, with the best of the lenses.

 

The way Spiller defined his target market Leica will continue to serve those people a M10 even if a plastic equivalent existed that was considerably cheaper.

 

At a personal level if I do not get a bonus, and have to face the wife I shall certainly buy a plastic FF M camera. I still use my Digilux but I love the look and feel of sheer build quality of a M camera (film & digital).

 

Realistically there will be some erosion of the M10 market of course but maybe not that significant. As someone said in an earlier thread that you Andy and many on this forum are users and not buyers of £5000 M cameras....the rich snobs are. I believe you also said that you would buy a £1500 plastic M10 and so would I...no doubt.

 

That leaves Leica free to go after say a 5% share of a new market that wants a camera that meets the following criteria:

• Price of body £1000
  
• Price of each Summarit lens ..about £500 (when bought as a kit)
  
• Total kit price of camera with a 35mm 50mm and 75mm £2500
  
• Full Frame plastic body M that accepts all old Leica glass
  
• Auto exposure, Rangefinder
  
• Size and weight ....more compact than the DSLR's
  
• Reliable camera supported by Leica after sales support.
  

I know that the Summarit lenses retail at £950 (35mm 75mm, 90mm) £770 (50mm) today individually. However maybe Leica should become more aggressive on their pricing for these entry level products.

 

I am not a fan of S.Lee however IMHO he at least was trying to drive the company forward to gain market share using the M8 and Summarit as the vehicles. His initial M8 pricing was OK (at just over £2000) and way below the £5000 of a M9 .

 

I did not get the impression from the Spiller interview that he was driving the company forward in new exciting directions and going after new high growth revenue streams. I hope he surprises us at Photokina but I fear the worst. I actually now expect M10 a la carte with a choice of leather colours as the new initiative.

[andybarton]

You are a hopeless case, Frank... Good one. You nearly had me fooled then.

 

I would buy a £1,000 ff Leica-made Digital M body. Of course I would. But I wouldn't expect them to be around next year if it needed fixing and I wouldn't expect them to be around to fix my M2, M7 or IIIf either, more's the pity.

 

So, let's encourage Leica to lose a couple of hundred quid on every lens they sell with a full frame body that costs 20% of the price of the next best alternative and less than the company's latest point and shoot. Even the Epsons were about two thousand and they were made in the far east.

 

Oh, and let's encourage them to both make these in Germany to the same quality standards (or better) as their current model, and let's encourage them to make six times as many as they do now.

 

Oh, and let's not upset the installed customer base who are still paying £1700 for a used cropped-sensor secondhand Digital M, even though these have just halved in value overnight.

 

And finally, now that people have a complete digital M kit for two and a half grand, their likelihood of buying more lenses (i.e. ones where Leica might actually make some profit) is severely diminished.

 

Unless you really believe that Leica make about 90% profit on every M9 they sell, this really is the road to ruin in one financial year. You are subsidising a lens by a couple of hundred pounds for each unit and encouraging Leica to sell four of them as a package with a camera that retails for a thousand? How on earth do these numbers make any sense at all?

 

Admit it, your calendar has accidentally blown forward about 12 days, hasn't it?

 

 

 

Hang on... There's likely to be a vacancy at The Treasury in 6 weeks time, if you weren't non-dom maybe you should apply. (Not that that seems to be an obstacle these days )

[stunsworth]

His initial M8 pricing was OK (at just over £2000) and way below the £5000 of a M9

 

The initial M8 price was 50% more than that at just under £3,000 - it was in fact £2,990.

 

You are certainly expecting Herr Spiller to fit a heck of a lot into a 200/300 word interview.

[Guest BigSplash]

You are a hopeless case, Frank... Good one. You nearly had me fooled then.

 

I would buy a £1,000 ff Leica-made Digital M body. Of course I would. But I wouldn't expect them to be around next year if it needed fixing and I wouldn't expect them to be around to fix my M2, M7 or IIIf either, more's the pity.

 

So, let's encourage Leica to lose a couple of hundred quid on every lens they sell with a full frame body that costs 20% of the price of the next best alternative and less than the company's latest point and shoot. Even the Epsons were about two thousand and they were made in the far east.

 

Oh, and let's encourage them to both make these in Germany to the same quality standards (or better) as their current model, and let's encourage them to make six times as many as they do now.

 

Oh, and let's not upset the installed customer base who are still paying £1700 for a used cropped-sensor secondhand Digital M, even though these have just halved in value overnight.

 

And finally, now that people have a complete digital M kit for two and a half grand, their likelihood of buying more lenses (i.e. ones where Leica might actually make some profit) is severely diminished.

 

Unless you really believe that Leica make about 90% profit on every M9 they sell, this really is the road to ruin in one financial year. You are subsidising a lens by a couple of hundred pounds for each unit and encouraging Leica to sell four of them as a package with a camera that retails for a thousand? How on earth do these numbers make any sense at all?

 

Admit it, your calendar has accidentally blown forward about 12 days, hasn't it?

 

 

 

Hang on... There's likely to be a vacancy at The Treasury in 6 weeks time, if you weren't non-dom maybe you should apply. (Not that that seems to be an obstacle these days )

 

Andy it is good that you seem to be in a really happy frame of mind.

 

I think you still have a problem with COST, and SELLING PRICE..they are very different animals. If you make a M10 using exotic magnesium alloy body, brass top cover and assemble just 50 per day using highly trained people that is IMHO going to be significantly more expensive that a plastic case, assembled on a serious volume production basis like the Digilux was.

 

The Summarit lenses were specifically designed to be excellent and low cost. ..and were intended to be made in large volumes. Now if Leica charge crazy prices and do not use volume production techniques obviously the cost will go up and there are no economies of scale.

 

The first Sony walkmans used to cost much more to make compared to the sale price, but soon they were making serious money at Sony as they went down a learning curve due to the high volumes that they made.

 

Now the mathematics .....I would hope that Leica make a Summarit lens for £100 and sell it for £500 to the retailer who resells it at £950. Leica make £400 on each lens. Imagine they make 1000 a month ...that drives £400,000 profit. Now if they reduce their manufacturing cost due to much higher volumes of 10,000 per month to say £80 each and sell the thing to the retailer for only £200 each they make £1.2Million ..or three times as much.

 

Quality is likely to increase because suddenly volume production will have 3 sigma quality control all over the place, and consistent reproducability is assured by removing the heavy labour content.

 

Now let's look at price. That IMHO should be based on market value. The rich snobs will still buy the £5000 M10 that can be assembled by technicians using gold tools in a space capsule. Exotic leather can be used still, and allowing the choice of a nice titanium or safari or white finish is a no brainer!

 

For the rest of us paying £5000 is not going to happen and Leica need to understand that. They also need to understand that they need to take a calculated buisness risk as Sony did with its walkman, or Apple did with the iPod and build something using their technology edge that people want in large numbers so that they get down a learning curve, and enjoy lower unit profits but higher profits overall.

 

If they do not do this then surely they are a luxury goods company and with a single product for those that buy luxury goods. Hermes saw that opportunity and the business model failed.

 

I think Leica has a great chance to reinvent itself like Apple did, a rubber boot manufacturer in Finland did (Nokia) and there are many more examples. They will need to better articulate their vision which Spiller did not do....I hope he is doing it quietly internally.

[Guest BigSplash]

Hang on... There's likely to be a vacancy at The Treasury in 6 weeks time, if you weren't non-dom maybe you should apply. (Not that that seems to be an obstacle these days )

 

This treasury job sounds interesting.....do I get limitless expenses? ..do I have to take responsibility if I get things wrong....To be clear I'd prefer a promotion if I screw up!

[andybarton]

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Get yourself to the factory and see how Leica lenses are made. There's over £100 of labour in each one, easily. You have no idea. Watch the video that Andreas kindly shot.

 

Unless you are proposing that this is all to be made in the far east, then you are in cloud cuckoo land. Sorry, but this is all just madness.

[pop]

To be clear I'd prefer a promotion if I screw up!

 

"when", you mean?

[Guest BigSplash]

The initial M8 price was 50% more than that at just under £3,000 - it was in fact £2,990.

 

You are certainly expecting Herr Spiller to fit a heck of a lot into a 200/300 word interview.

 

Steve you are correct that was the price on day one, and driven by value pricing. There was a huge initial demand just like M9 so they grabbed what they could get and I do not blame them. They must have made very good profits.

 

After one year the reality was that the dealers gave discounts and then Leica gave a £500 cash back plus there were lens discount vouchers etc. I do not believe that Leica was selling below cost when it was possible to buy the camera at £2500 towards the end ...they were still making lovely profit I believe, and if that is not the case Leica really has a serious issue.

 

Herr Spiller did not really indicate where his company is going, and why he expects it to grow and be very successful. Surely that is what a CEO does in an interview isn't it?

 

He did not even say when the delinquent backlog will be fixed or how the new business lines are already (or about to be) going gang busters (New M lenses, S2, X1, Pradovit) coming from nowhere.

 

He did not suggest that Leica was moving into new markets that will be the future. Surely that was an opportunity to tell how great Pradovit sales are and how the Pros are desperate to get a S2. etc

 

Maybe this is what he will be saying these things at the soon to be announced Annual results and he is keeping his powder dry or at Photokina.

[jaapv]

Ah- the Pradovit - I was waiting for that one

[Guest BigSplash]

Get yourself to the factory and see how Leica lenses are made. There's over £100 of labour in each one, easily. You have no idea. Watch the video that Andreas kindly shot.

 

Unless you are proposing that this is all to be made in the far east, then you are in cloud cuckoo land. Sorry, but this is all just madness.

I have seen the video and I have been to the old Wetzlar factory. I actually also went to the Riedel glass factory where they used to blow wine glasses individually by hand....these glasses are now produced to a higher standard, closer tolerances, and they now use automated machines.

 

The fact that Solms is using £100 of labour on each one is madness! I am sure that you are correct but ask yourself why?

 

They obviously IMHO need to address a £100 cost per lens on labour alone to be long term viable. I hope that the plan for the new Wetzlar factory is to drive labour costs down by using more capital, dramatically increasing the volumes and keeping labour headcount flat..

 

Finally please explain why far east costs for high tech product is so much cheaper. Germany is No2 w/wide manufacturer by value . I fully agree if you want a sink, a shoe go to China but high tech. due to Germany's leadership in machine tools is the place to go. The problem is when you have a factory in Germany that does things manually and achieves volumes of 50 per day!

[Guest BigSplash]

Ah- the Pradovit - I was waiting for that one

 

Happy to oblige ...! I'm off to watch France & England Rugby although I think the outcome is not going to be a good one

[stunsworth]

Herr Spiller did not really indicate where his company is going, and why he expects it to grow and be very successful. Surely that is what a CEO does in an interview isn't it?

 

He did not even say when the delinquent backlog will be fixed or how the new business lines are already (or about to be) going gang busters (New M lenses, S2, X1, Pradovit) coming from nowhere.

 

He did not suggest that Leica was moving into new markets that will be the future. Surely that was an opportunity to tell how great Pradovit sales are and how the Pros are desperate to get a S2. etc

 

 

Frank, read the interview. As I said earlier I'd guess it's 2-300 words. For all you know he did mention all of those things in the interview itself. There's only so much that can be mentioned in a short report.

 

Perhaps he should have resorted to a series of bullet pointed lists instead.

[stunsworth]

Finally please explain why far east costs for high tech product is so much cheaper.

 

It's because much of what they produce is high volume, low margin goods. Leica will never be a high volume manufacturer - no matter how much you'd like them to be.

 

Taking hifi as an example, a company like Marantz makes it profit from relatively low priced equipment. However, they also have a range of hand made equipment that it sold in much smaller volumes and at much higher prices. For example this £5,000 Blu-ray player...

 

Marantz UD9004 Universal High Definition Blu-Ray Player

[andybarton]

 

The fact that Solms is using £100 of labour on each one is madness! I am sure that you are correct but ask yourself why?

 

They obviously IMHO need to address a £100 cost per lens on labour alone to be long term viable. I hope that the plan for the new Wetzlar factory is to drive labour costs down by using more capital, dramatically increasing the volumes and keeping labour headcount flat..

 

please explain how you can make a Leica lens, without all the hand checked and manual input. It's just not possible.

 

If you want Leica to make CV type lenses, then that's possible.

 

If you want to destroy the only USP that Leica have, then go ahead with your plan.

 

Despite your protestations with regards to your long term Leica ownership, I really don't think you understand the DNA of what makes the brand special and different. What makes them different is not turning out thousands of £200 lenses.

[lct]

I'm off to watch France & England Rugby although I think the outcome is not going to be a good one

Going to be an excellent one i'm afraid.

[luigi bertolotti]

Maybe Spiller's interview was really quickly made and un-prepared... anyway this phrase (if correctly translated) is indeed someway rough and simplicistic :

 

" First, the collectors. Second, the tech-savvy who want high quality in a digital full-frame camera. Third, ambitious photographers who want the Leica Red Dot, and want to show they can afford it "

 

1) Collectors : a huge community... which pays much more attention to the trend of, say, original Leica MP prices at auctions, than to the intro of a new Digital M.

 

2) "Tech savvy..." : ok... but doesn't touch the real point : using a M is DIFFERENT from any other digital camera... "quality" in itself is no more the principal factor : M users (I think, based on my experience) LIKE to take pics with a RF camera... and M is the ONLY digital on the market, and a good quality too, with top lenses.

 

3) "Ambitious..." : frankly, I think this is a unappreciable factor... most of people doesn't know what is a Leica... many look at it simply as an old fashion device... I stayed many times with my M8, with a fine lens on, between people that noticed I was taking pics... I'd swear that none of them were thinking that I was a guy that could afford around 6000 Euros of gear at my neck... ... probably, some simply thought "what strange camera is using that man ?"

[stunsworth]

Luigi, I think you are reading too much into what was said in a very short interview as reported. The fact is that some people _do_ buy things because of their perceived 'value' rather than because they are functionally useful to an individual. I believe quite a large section of the fashion industry is sustained by this principle.

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Hallo,

Look here: Interesting Leica gear

[rosuna]

1) Collectors. Are collectors interested in digital cameras?

 

2) Tech savvy. You have to get a DNG file from the M9 and process it in a correct manner for getting the best image quality. JPGs are compressed images with 8-bit per channel tonal gamut. The M9 is a manual focus camera and the metering is based on some special center-weight shape. I don't think this kind of digital rangefinder is for the tech savvy guy. It may be a good solution for the typical film M user, but he/she would need some training in digital processing anyway.

 

3) Ambitious. Leicas as status symbols... It is fine if it works for Leica but... you cannot charge more for this status "property" of the tool if the tool isn't up to the expected standards. Not indefinitely.

 

Real photographers, users of the cameras, are looking for something different: a special tool with special characteristics for a particular type of photography; a reliable instrument with good support and a long term investment; state of the art technology for the essential functions of the camera. Focus on the essentials. These people know how to process a photograph to get the best, aren't collectors (they use their Leicas) and are prepared to pay more for a better product, but not for a mere red dot.

[ho_co]

Am I right to say many of us don't find ourselves in Mr Spiller's list?