IkarusJohn Posted August 9, 2012 Share #1 Posted August 9, 2012 Advertisement (gone after registration) While we're waiting for Photokina, I thought it might be interesting to do a rough cost comparison between an M3 and standard 50 Summicron lens in the year of release against current prices. In past comparisons, a straight depreciation model has been used, which has always struck me as misleading. To my mind, the proper comparison is of household incomes. Now, here is a bit of a problem - getting standardised data. I tried to use NZ currency, but when I found that the average household income in that period was 500 NZ Pounds, things got a bit difficult - I couldn't find an NZ Pound price for an M3 in 1954, not surprisingly. So trolling through what I could find after a quick Google search, I got these figures: Av US household income in 1954 - $3,960.00 Leica M3 with 50 Summicron lens - 350.00 So this purchase in 1954 represented 8.84% of household income. For 2012 figures, things get a little difficult. I looked at a US Federal Reserve assessment, and the average (mean) figure for 2012 was not immediately apparent. Looking at more fringe data (Sentier Research - looks like a political think tank), I got this: Median US Household income year ending January 2012 - $50,020.00 Leica M9 with 50 Summicron (not ASPH) - $9,300 So, this purchase in 2012 represents 18.59% of median US household income! If you take a 35 Summilux ASPH as the standard lens, it jumps to 24%! The Leica prices I simply took from B&H Photo, so the only variable is a proper comparison between 1954 household incomes and 2012 household incomes. To my mind, with the change in lifestyles sine the 1950s, household incomes are the correct comparison. Median incomes are easy to take, as they represent a middle line. I would probably prefer mean incomes, but I haven't been able to find that data. Bottom line - Leica gear has always been expensive. In New Zealand, in 1954, an M3 and Summicron cost 44% of the average household income (at a rate of 1.586 USD to the NZ Pound). So, how much will Leica's new offerings at Photokina be priced at? Cheers John Link to post Share on other sites More sharing options...
Advertisement Posted August 9, 2012 Posted August 9, 2012 Hi IkarusJohn, Take a look here Relative cost of Leica gear. I'm sure you'll find what you were looking for!
rramesh Posted August 9, 2012 Share #2 Posted August 9, 2012 I am not sure if such comparisons are meaningful for luxury and brand items which is where Leica is heading. In Singapore a secretary would typically earn 1,000-2,000. Would not be surprised to see her carry a Louis Vuitton bag worth 3,000 or wear a Rolex worth 5,000. Link to post Share on other sites More sharing options...
wildlightphoto Posted August 9, 2012 Share #3 Posted August 9, 2012 Add a light meter to the M3 and either substitute an MP for the M9 or add the cost of consumables to both cameras for a more meaningful comparison. Link to post Share on other sites More sharing options...
IWC Doppel Posted August 9, 2012 Share #4 Posted August 9, 2012 I am not sure if such comparisons are meaningful for luxury and brand items which is where Leica is heading. In Singapore a secretary would typically earn 1,000-2,000. Would not be surprised to see her carry a Louis Vuitton bag worth 3,000 or wear a Rolex worth 5,000. How ? Link to post Share on other sites More sharing options...
IWC Doppel Posted August 9, 2012 Share #5 Posted August 9, 2012 When I'm at my desk I'll have a look at RPI and inflation and have a look back. I suspect we will realise that other electronic products have come down in price in relative terms making the Leica look and be rather expensive. I also recognise the price positioning the M10 will be notably more expensive than the Nikon D4 I have no doubt. Fortunately the proposition even at inflated prices is supported by residuals and they have I suspect a somewhat loyal customer base, one could say an installed base given the lens ownership position. If I was running Leica (I wish !) I would promote the membership proposition, role out more servicing (CLA as some like to all it) at reasonable pricing and further embed the membership and customer (in some ways this does look to be part of their strategy) The price (and quality in the wider sense) has to be positioned above Nikon etc. Given how close a Leica collection might be in comparison to a small family car financing has to be a consideration. Leica finance with an M10 on lease payments would be interesting... Sorry for rambling ! Link to post Share on other sites More sharing options...
jaapv Posted August 9, 2012 Share #6 Posted August 9, 2012 In Germany Leica has been offering financing schemes on a regular basis for many years. Link to post Share on other sites More sharing options...
Scarlet Posted August 9, 2012 Share #7 Posted August 9, 2012 Advertisement (gone after registration) It seems to me that a relevant consideration is that the M2 was offered for pretty much the same time as the M3 as the low-cost (regardless of whatever this brochure says) alternative to the pricey M3 ($50 cheaper). Leica today does not offer any such lower-price alternatives today. I think Andy Piper had some relevant thoughts in this thread. Link to post Share on other sites More sharing options...
IWC Doppel Posted August 9, 2012 Share #8 Posted August 9, 2012 Looking at UK stats for RPI (All items index) the relative price differences are today is 18 x 1962 prices, 9.5 x 1974 and 2.4 times 1987 prices. I have the figutres in between if anyone has any old UK prices for, say a Summicon 50mm and an M3 or M4 ? Link to post Share on other sites More sharing options...
farnz Posted August 9, 2012 Share #9 Posted August 9, 2012 How ? Saving (remember that?) or credit. Pete. Link to post Share on other sites More sharing options...
mmradman Posted August 9, 2012 Share #10 Posted August 9, 2012 Saving (remember that?) or credit. Pete. That and living with parents perhaps. Added benefit of living in Singapore you can actually forfeit having a car, not small expenditure in other developed countries. Link to post Share on other sites More sharing options...
rramesh Posted August 9, 2012 Share #11 Posted August 9, 2012 How ? The Leica is not a household necessity like a home or a car to be compared with household incomes. Neither is its target customer today similar to their customers 20-30 years ago. Today Leica is purchased by the wealthy, the collectors and other individuals aspiring a product of high quality and based on a brand recognition. This is also how Leica is increasing marketing their products. In this market there cannot be a correlation possible with median household incomes etc. Link to post Share on other sites More sharing options...
scsambrook Posted August 9, 2012 Share #12 Posted August 9, 2012 Looking at relative photo gear costs over time is always interesting, if sometimes frustrating. The "www.measuringworth.com" website is easy to use and informative, giving plenty of options on which to base comparisons. But when actually comparing whatever "then and now" prices we arrive at, I think it's also prudent to consider changes in import duties and sales taxes which may have created their own distortions which don't necessarily figure in the results. UK purchase (=sales) tax on cameras in the mid to late 1950s was 66% of the wholesale price, which itself included a big chunk of import duty levied on the foreign ex-works price - I think 33%. For instance: Ex works camera price of £50 was liable to £16.50 import duty = £67.50 Add importer profit of (say) 33% to ex works price - another £16.50, making basic wholesale price be £84.00 Then add 66% of wholesale price as purchase tax (approx £55), making price paid by dealer be £139.00 Then add dealer mark-up of 50% (typical of late 1950s) on wholesale price (£42) giving a retail price of £181.00 . . . which is about what an M2 body cost, if you could actually find one in the UK. Today we have no import duty into UK on EC goods, and VAT at 20%, making for a greatly reduced element of taxation on cameras. We also have far smaller dealer margins in selling prices. . . Link to post Share on other sites More sharing options...
IWC Doppel Posted August 9, 2012 Share #13 Posted August 9, 2012 The Leica is not a household necessity like a home or a car to be compared with household incomes. Neither is its target customer today similar to their customers 20-30 years ago. Today Leica is purchased by the wealthy, the collectors and other individuals aspiring a product of high quality and based on a brand recognition. This is also how Leica is increasing marketing their products. In this market there cannot be a correlation possible with median household incomes etc. I meant the numerous secretary's with £60,000 handbags and £100,000 watches.............. Link to post Share on other sites More sharing options...
IWC Doppel Posted August 9, 2012 Share #14 Posted August 9, 2012 Saving (remember that?) or credit. Pete. I certainly do But if my maths is correct then they must be quite old...... by my reckoning in the UK a secretary on £20k per year after living costs would need to be over 50 before the £160k is saved (assuming nothing unforseen) and they use public transport and don't own a house, had no fun before they can check the time and go into the handbag for erm.... a hankerchief ! Or even worse a very large credit card bill ! Link to post Share on other sites More sharing options...
farnz Posted August 9, 2012 Share #15 Posted August 9, 2012 Splitting hairs perhaps;) but if a secretary's on 2,000 and the Rolex is 5,000 as per the original model ... ? And there are a lot of cheap, counterfeit goods around these days. Pete. Link to post Share on other sites More sharing options...
rramesh Posted August 9, 2012 Share #16 Posted August 9, 2012 I meant the numerous secretary's with £60,000 handbags and £100,000 watches.............. Maybe this will explain. Luxury Brands: Asia | Objectivism for Asia | The Atlas Society Link to post Share on other sites More sharing options...
jaques Posted August 9, 2012 Share #17 Posted August 9, 2012 I don't know if they still do it but Phase One used to offer an amazingly good customer loyalty program where they would give very good trade ins for older models when a new one was released. They also had an incredible worldwide replacement/loan service in case of a rare failure. It would be great if Leica had similar professional services considering the cost of the goods... but I fear Leica is heading further into the Luxury world... they have said as much- and this market actually does not demand the same level of service and reliability as the less well heeled. such lucky folks are happy to have a Rolex that costs $60,000, needs a $400 dollar service every year and always loses time. They accepted Jaguars that had 16 cylinders but never started, etc. They accept Louis Vuitton handbags that have an intrinsic value that is a fraction of the purchase/market price. Companies like Phase One target another 'professional' market that has much higher expectations and demands in return for such substantial investments. Leica pretends it is a professional 'technical' product and technically it is- but in reality it is supplies a tiny fraction of the true professional market- supplying primarily the (serious) amateur and luxury markets. Link to post Share on other sites More sharing options...
pico Posted August 9, 2012 Share #18 Posted August 9, 2012 When my office was located in a university research library I had access to all sorts of government documents, and I had the luxury of having assist from a government documents expert (PhD in statistics, too). Once I was curious regarding the question of this thread and after hours of research and consultation I gave up because it was clear the subject was so complex that conclusions were open to as many criticisms as there were criteria. A critical criteria is the location of the purchaser then and now, demographics, economics, consumer mood, habits, needs. Below I address the USA in particular which was profoundly different for countries recovering from a world war. Measuring by inflation is an inadequate method. Consider the relative costs of other things which has changed remarkably. Compare the cost of housing, food, clothing and transportation to today, for example. One has to look at all of those together. In relation to today, housing was less expensive, transportation less expensive, clothing more expensive. I forget where food fit in there. One has to consider demographics - the average age of the buyer and the nature of his expenses when he buys. When the M2 became available the middle-class was growing and more consuming families had young children to add to household expenses. As mentioned, in the Fifties in the USA credit was not often used compared to today. Never heard of a credit card when I was a kid (five years old in 1950). In fact, buying on credit was considered a personal weakness. 'Lay-away', putting aside an item and paying the store over time before receiving it was more likely. (The rationale for lay-away was to secure purchase of an item because it might not be available when you have saved enough. It is like forced savings and security of purchase.) Another factor in value comparisons is the mood of the consumer. In the USA the mood was high optimism, in particular for those who worked in high-demand crafts and those with a college education. Those people were more likely to put savings into an expensive item because they felt they could recover later as wages increased. On the other hand, countries recovering from the devastation of WWII were of a different nature, or mood. So to simplify the comparison, let's go back to the luxury model and decide how the Leica related to luxury spending compared to today. First, most cameras in the USA were not good and even the best were not durable. Leicas were exceedingly well built in comparison, however 35mm was still not popular in the USA, not even for professional photography or newspaper work. A pro did not 'need' a Leica and in fact it was a risk to use 35mm for most professional work. That changed in a few years, so specify the date for comparisons carefully - keep to the date of introduction. Link to post Share on other sites More sharing options...
bocaburger Posted August 9, 2012 Share #19 Posted August 9, 2012 Av US household income in 1954 - $3,960.00 Leica M3 with 50 Summicron lens - 350.00 So this purchase in 1954 represented 8.84% of household income. For 2012 figures, things get a little difficult. I looked at a US Federal Reserve assessment, and the average (mean) figure for 2012 was not immediately apparent. Looking at more fringe data (Sentier Research - looks like a political think tank), I got this: Median US Household income year ending January 2012 - $50,020.00 Leica M9 with 50 Summicron (not ASPH) - $9,300 So, this purchase in 2012 represents 18.59% of median US household income! If you take a 35 Summilux ASPH as the standard lens, it jumps to 24%! Way too simplistic a comparison, ignoring a plethora of variables. You're comparing based on gross income, but taxation has changed, radically affecting net income. Just a couple examples: In 1954 there was no such thing as a minimum wage, or a Medicare deduction from one's income. In 1954 the middle class was employing the lower class, not supporting it with welfare and other entitlements. In 1954 trade unions were just beginning to extort management with no care about the future ramifications. Partly that was because in 1954 there were not off-shore labor alternatives like the BRIC nations of today. The largest percentage of consumers in 1954 had grown up in the depression and come of age during WWII, they were at once frugal to a fault and rabidly patriotic. In 1954 the status-symbol car was a Cadillac, with Lincoln and Imperial distant second and third. "Foreign" brands were symbols of ecclecticism, not status. To be fair, the affluent, rich and super-rich were not as many as today. Altogether, the comparison of Leica prices then and now is very complex and entails considering sociology as well as economics. Link to post Share on other sites More sharing options...
jaapv Posted August 9, 2012 Share #20 Posted August 9, 2012 Not to mention that Leica was priced in DM, in Euros now and "translated" to dollars - you have to take monetary fluctuations into consideration as well. Link to post Share on other sites More sharing options...
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