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What is wrong with Leica?


FrankA

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Sorry Mark - we were actually typing at the same time, so the comments were relating to previous postings, not you. In fact a lot of what you say does sound believable. Leica's production and design methods undoubtedly are not the same as Canon and Nikon, so the notion that they should choose exotic materials doesn't seem unlikely.

 

If this is indeed the issue, then one has to wonder as to the logic in creating designs that rely on materials which are near impossible to source.....

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You might not have heard of it, but Leica mentioned among other causes a shortage of the special glasses needed for the lenses.

 

Had you bothered to read my previous post, you would have seen that I comment that the supply of glass is a problem. However, a shortage may not just be lack of availability - an inaccurate sales forecast which leads to the forward ordering of glass with long lead times will also constrain their capacity. The Digilux 3 has a lot to answer for...

 

In case you didn't hear this, either, since 2004 they brought two new camera models to market which was an investment of even more than 1M€.

 

Your sarcasm does you no credit. However, amounts spent on developing the M8/M9/S2 simply beg the question why Leica has not apparently invested also in improving lens production capacity.

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Before the success of the M9 the Lens production capacity probably was not so far off the market demand as it is now. From what one hears, they basically used their last Euros to develop the current lineup - they even had to cut salaries because there was no money left. Now things certainly look brighter. Besides, Leica is currently busy building a completely new factory in Wetzlar. One could assume that with moving to the new factory, also the production capacity might increase.

 

Peter

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[...]Leica could increase revenue and especially profit by more closely meeting demand. There must be a certain reticence in Solms to do this - buy more lens grinding machines, place larger forward orders for machined parts and glass, install new and better production lines and train more people how to assemble the lenses - in case the demand turns out to be temporary.[...]

 

You do not know that Leica could increase revenue and profit by following your suggestions. I strongly suggest you scroll down and read Andy Piper's comments regarding hiring in Germany. It is practically a one-way trip. Rare is the layoff.

 

If Leica is selling everything it can produce, then it is making money. Leica has a sustaining business model. It hasn't the flexibility of the disruptive technology model of Asian manufacturers. Your suggestion would break Leica.

 

Also note that you mentioned a glass shortage. It's a Rare Earth materials shortage. How can one make more lenses if there isn't enough material? Here, read this article.

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Er, maybe Leica has heard something about the current financial climate that you haven't? Maybe dealers have too and are being cautious in not tying capital up in some of the world's most expensive lenses -- which might then take months and months to sell....

 

Christ, this all sounds a bit like "My present gold shoes are uncomfortable and I want a new pair *now* -- what is wrong with you dealers? Why don't any of you have gold shoes in stock?"

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It is not about the dealers. Every dealer I have talked to wish they could get the "gold shoes" and sell them. It clear that my post was poorly written. I thought I was doing something a little tongue in cheek. It just did not come across that way. If I have offended anyone, I am sorry. I am not wealthy and I am not a spoiled brat. I do believe Leica is missing an opportunity and I am sure they aware of that. I think they make the best lenses in the world. I have a important project coming up and I need/want the 50. It is as simple as that. Frank

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It is not about the dealers. Every dealer I have talked to wish they could get the "gold shoes" and sell them. It clear that my post was poorly written. I thought I was doing something a little tongue in cheek. It just did not come across that way. If I have offended anyone, I am sorry. I am not wealthy and I am not a spoiled brat. I do believe Leica is missing an opportunity and I am sure they aware of that. I think they make the best lenses in the world. I have a important project coming up and I need/want the 50. It is as simple as that. Frank

 

The problem for Leica is that lots of people are buying new M9 and have to buy

 

- 2nd hand Leica lenses or

- CV or ZM or Konica lenses

 

Some of them are not necessarily going to replace with new Leica lenses when they become available.

 

Noel

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I strongly suggest you scroll down and read Andy Piper's comments regarding hiring in Germany. It is practically a one-way trip. Rare is the layoff.

That would be an exaggeration. While we do not have the hire-and-fire culture of, for example, the US, layoffs happen all the time. So that isn’t really the issue. Leica has a highly qualified workforce. They couldn’t hire just anyone and show them their place in the assembly line. They would need to find qualified personnel and even qualified people would probably require a lot of training on the job – manufacturing lenses the way Leica does isn’t exactly commonplace. Expanding the production capacity (which of course would also require buying some expensive machinery) required a lot of time and money and for a company with limited resources it would only be prudent to steer a conservative course. In fact Leica has been (and is) hiring for some time now, just in other areas (see Leica Camera AG - Karriere). They seem to be more interested in qualitatively expanding the breadth of their capabilities, and only to a lesser extent in quantitatively expanding the manufacturing capacity.

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I know a some of places in the USA. Can't tell how much I have spent through Ken Hansen. Don't want the hassle of overseas purchases and exchange rates are not that favorable anyway. Just need to keep looking. On another note. I find it comical that most local leica dealers have all the M9's they want. But B&H in New York has been out for weeks. Now that one just does not make sense either.

 

Frank, Ken sold me my first M3 in 1974. B&W aren't very very knowledgeable or that interested in Leica & never have been. I have meet most of the "managers" & have almost no training or knowledge base on anything Leica, Digital or Analog. They also don't invest in used Leica gear in any significant way. Ken is really the best.

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Like all manufactures who know what they are doing, they make what they can sell. Today that is the M9.

 

When demand slackens, they will move people back to make lenses. For now, use the legacy lenses. I have a drawer stuffed with them.

 

Except of course the cameras are made in Portugal apart from some final fiddling, lenses are made in Solms. The skills to make lenses are quite different from those for cameras so the ability to redeploy is limited. Besides, Leica will be busy with the M10 and all the warranty returns.

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Like all manufactures who know what they are doing, they make what they can sell. Today that is the M9.

 

When demand slackens, they will move people back to make lenses. For now, use the legacy lenses. I have a drawer stuffed with them.

 

But they also *could* sell the 50 lux asph in huge (for Leica) quantities, which is kinda the point, as is your remark 'use legacy lenses' - while true this means less revenue again. Not everyone will swap to the newer versions when (if) they become available.

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Er, maybe Leica has heard something about the current financial climate that you haven't?

 

A large portion of Leicas customers are not affected by economics in the way the average guy is. If they were worried about such things they'd have stopped putting efforts into products like the Titanium M9.

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If Leica is selling everything it can produce, then it is making money. [/url]

 

You assume. This doesn’t automatically follow, nor does it follow that not having lens stocks at any of their dealers is part of some kind of business model.

 

I'm sure your assertion that expanding in line with demand would 'break Leica' would have also been made by some in response to the costs involved in developing a digital rangefinder....

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I'm sure your assertion that expanding in line with demand would 'break Leica' would have also been made by some in response to the costs involved in developing a digital rangefinder....

 

I don't follow, the M9 has only just become available as an ex-stock item, over a year after launch. Two things seem obvious, Leica is selling everything the company can make, and the company has returned to profitability. How would you propose they increase productivity to the levels you propose?

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I don't follow, the M9 has only just become available as an ex-stock item, over a year after launch. Two things seem obvious, Leica is selling everything the company can make, and the company has returned to profitability. How would you propose they increase productivity to the levels you propose?

 

I guess what I don't get is why people are so sure that it is impossible for Leica to respond to meet the demand that is clearly there.

 

Selling everything you can make is not the ideal point of profitability that people on here seem to imagine. If you had a hotdog stand with a queue of 20 people, but you could only make one hot dog every 5 minutes, sure you'd be selling every one you made, but you'd be requiring your line to be very patient (I love these 'dogs, I'll put one on backorder) or risk losing their trade (It's been an hour...let's go get pizza (CV), not to mention the people that see the size of the line and choose not to bother in the first place. One thing for certain, you'd not be making the amount of money you could be, if you hired a second guy to make the hot dogs.

 

That's a simplistic example, but simply being out of stock all the time is no sign of profitability or long term success.

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