Jeff S Posted March 7, 2018 Share #21 Posted March 7, 2018 Advertisement (gone after registration) I think Leica is concerned more with product differentiation (and associated marketing), not cannibalization. They want us to buy not just one system, but multiple systems (and one is better than none). So timing of product introduction or upgrade remains as critical as the product itself. With increasingly more products, this becomes a more difficult dance. But the capability to share lenses across systems is smart. Jeff 4 Quote Link to post Share on other sites More sharing options...
Advertisement Posted March 7, 2018 Posted March 7, 2018 Hi Jeff S, Take a look here On cannibalising sales. I'm sure you'll find what you were looking for!
UliWer Posted March 7, 2018 Share #22 Posted March 7, 2018 Ahh Jeff, I thought of putting photo industry in my post. Zeiss, of course, I had forgotten about them, what a huge contribution they have made over the years, gotta love the sonnars, but sadly they also have abandoned camera manufacturing, maybe they'll return, like Alpa who appear to be thriving. Zeiss is not really any longer in photo industry. They do not produce cameras any more since 1971 and have also stopped to produce lenses for photography. The production comes from Cosina and may be some other makers and only the lens design is still done by Zeiss - though nobody can really be sure even about the design. Zeiss is a good example for failure - because they feared cannibalization. They had acquired Voigtländer and Voigtländer had a very modern concept for an SLR camera. But this concept was abandoned by Zeiss because they feared it could cannibalize their own Contarex - which cost more to produce than the price it was sold for. One does not know whether Zeiss would have existed longer as a camera producer if they had accepted the cannibalization - stopping their own product and go on with the Voigtländer, but it was the only chance they had - and missed it. We had the discussion about cannibalization here with the proposal of an M model with electronic viewfinder: might cannibalize the M with optical viewfinder and/or might be cannicalized by the SL and/or Q or vice versa etc. If costumers really prefer an electronic viewfinder in an M-body it does not make much sense to prevent them buying it out of fear of cannibalization. If such a System does not prevail, it would just be beacuse of costumer's choice on the market, not because of their fears of cannibalism. 3 Quote Link to post Share on other sites More sharing options...
jaapv Posted March 7, 2018 Share #23 Posted March 7, 2018 At one time the screw mount iiis were the flagship. Leica adapted. Kodachrome 10 was the flagship too. Kodak fiddled but failed to pivot on digital. Companies must adapt or they do not survive. Leica for sure has already adapted or we wouldn’t have an S, SL, CL, Q. Or a M10 either. I don’t think they would have made those cameras if they were fearful of cannibalization. At the same time the M has not stayed still. All this is good for we consumers. Of course, Alan. Leica has kept the M as much abreast of times as they can, but they have been careful to stay true to concept and form. As for fear of customer loss at a radical change: what about the iiig? And that in a time when customers had little chance to go elsewhere. Quote Link to post Share on other sites More sharing options...
Irakly Shanidze Posted March 7, 2018 Share #24 Posted March 7, 2018 At one time the screw mount iiis were the flagship. Leica adapted. Kodachrome 10 was the flagship too. Kodak fiddled but failed to pivot on digital. Companies must adapt or they do not survive. Leica for sure has already adapted or we wouldn’t have an S, SL, CL, Q. Or a M10 either. I don’t think they would have made those cameras if they were fearful of cannibalization. At the same time the M has not stayed still. All this is good for we consumers. Actually, Kodak did not fail to pivot on digital. They were first to introduce affordable and quite capable digital backs (I owned one, and I have yet to see these colors from Phase One, or anyone else for that matter) and lead the industry in CCD sensor production. They made a strategic mistake by giving in to demands of other digital back manufacturers and stopped making backs in exchange for their promise to kept buying Kodak sensors. Quote Link to post Share on other sites More sharing options...
mmradman Posted March 7, 2018 Share #25 Posted March 7, 2018 As much as M is iconic Leica product it was the evolution from film to digital that kept business afloat. Current manufacture of film M is a nod to history and smart marketing move but hardly significant contributor to the overall revenue. As Major markets are moving towards mirrorless model and Leica is responding with SL and APS-C models who is to say that M sized full frame has to remain optical RF forever. I think it’s s a matter of time before either future SL derivative is shrank to M size or CL body form is fitted with full frame sensor. Main question remaining is which bayonet mount, M or SL? 1 Quote Link to post Share on other sites More sharing options...
AlanJW Posted March 7, 2018 Share #26 Posted March 7, 2018 Actually, Kodak did not fail to pivot on digital. They were first to introduce affordable and quite capable digital backs (I owned one, and I have yet to see these colors from Phase One, or anyone else for that matter) and lead the industry in CCD sensor production. They made a strategic mistake by giving in to demands of other digital back manufacturers and stopped making backs in exchange for their promise to kept buying Kodak sensors. Perhaps I chose the word "pivot" inadvisably. No matter how characterized, Kodak muffed on digital. I am not sure they would have been so inept had they not been worried about their film business. Quote Link to post Share on other sites More sharing options...
Guest VVJ Posted March 7, 2018 Share #27 Posted March 7, 2018 Advertisement (gone after registration) So timing of product introduction or upgrade remains as critical as the product itself. With increasingly more products, this becomes a more difficult dance. It is a delicate balancing act for sure. This year a new S with 60-70MP which next year would allow the SL to go up to 40MP probably preceded by a 40MP Q which 2-3 years from now would allow further development on the CL/TL2 as they now are no longer a threat for the SL with its 40MP... 1 Quote Link to post Share on other sites More sharing options...
sillbeers15 Posted March 8, 2018 Share #28 Posted March 8, 2018 I'm not so sure.This seems to me to be a different case. The M is Leica's iconic flagship camera. It is more than a profit-turner, it is an essential emblem of the company. I guess Leica has a strong motivation to protect the position of the M in the line-up. The M is Leica’s flagship cause it managed to stand through time due to it’s simplicity & functionality ideology. More importantly Leica made a turnaround in sales & profit when it successfully introduced the digital M (M8, M9,..). I am certain that it is the situation and Leica knows that the M sales have apexed. Therefore new products such as SL & CL are to expand the market share of Leica in M & non M market. Besides, technology development wise do not exist for Leica to expand from SL to CL. Leica is rightfully doing so as the company is small and growing. These mentioned are conventional business strategy. Leica did what is non conventional is to set up direct sales channels to end users via Leica Store as it clearly knows its customers are not just ‘buy & forget’ consumers but rather enthusiastic users. Difference is the likelihood of repurchase is higher than consumers when served well. Leica does not need to make the best camera. It only have to give us what it’s user want as the branding itself is strong and valuable. So whatever Leica does, it should not dilute its branding. The moment Leica is persived as a non differentiator compared to the other camera makers, it would have lost its magic. We all know that it is the lenses that Leica makes that differentiate itself from others in reality and not the camera body. Zesis makes excellent lenses as well but it has got a really messed up business strategy as it does not capitalise on its branding. 2 Quote Link to post Share on other sites More sharing options...
pico Posted March 8, 2018 Share #29 Posted March 8, 2018 (edited) New consumers are unlikely to care about Leica's legacy. What made Leica popular was its small size and convenience. New consumers already have that in phones. Very many are happy. Leica must be positioned as a photographer's instrument, still relatively compact but thoroughly a camera and not a slab-sided ergonomically compromised pocket appliance that simply 'makes do' with no commitment, really, to photography. The only competitors for real cameras are fighting among the dinosaur DSLRs and mirrorless cameras and Leica has a firm stand in the later camp. This sensor nonsense will level. All will be very good. Remember, half of consumers are below average who can neither appreciate nor afford Leica. It is misguided to project our expectations against the consumer market. Leica needs not to be the best in all regards, it only needs to be very good in its niche. Edited March 8, 2018 by pico 2 Quote Link to post Share on other sites More sharing options...
mls1483 Posted March 8, 2018 Share #30 Posted March 8, 2018 Zeiss is not really any longer in photo industry. They do not produce cameras any more since 1971 and have also stopped to produce lenses for photography. The production comes from Cosina and may be some other makers and only the lens design is still done by Zeiss - though nobody can really be sure even about the design. Zeiss is a good example for failure - because they feared cannibalization. They had acquired Voigtländer and Voigtländer had a very modern concept for an SLR camera. But this concept was abandoned by Zeiss because they feared it could cannibalize their own Contarex - which cost more to produce than the price it was sold for. One does not know whether Zeiss would have existed longer as a camera producer if they had accepted the cannibalization - stopping their own product and go on with the Voigtländer, but it was the only chance they had - and missed it. We had the discussion about cannibalization here with the proposal of an M model with electronic viewfinder: might cannibalize the M with optical viewfinder and/or might be cannicalized by the SL and/or Q or vice versa etc. If costumers really prefer an electronic viewfinder in an M-body it does not make much sense to prevent them buying it out of fear of cannibalization. If such a System does not prevail, it would just be beacuse of costumer's choice on the market, not because of their fears of cannibalism. - Zeiss actually makes its money with the semiconductor industry (lithography). The camera lens business is doing well, also the microscopes (which I also have), but they are not the core business. - The Zeiss ZM lenses are made by Cosina in Japan. Only the Distagon 15mm f/2.8 ist still made in Oberkochen in Germany. - Zeiss still has a factory in Japan. Zeiss moved production from Germany to Japan in the 70s to lower production cost. This advantaage has of course long gone away. - I am not convinced that design only (without production) and licensing will be succesful in the long run. Outsourcing production is also not a promising approach, because the toll manufacture learns and takes over the business. BTW, Cosina is making excellent VM and E mount lenses now... Quote Link to post Share on other sites More sharing options...
roofus Posted March 8, 2018 Share #31 Posted March 8, 2018 (edited) I don't care whether Sony ever "takes over the industry." I'll never buy another Sony camera. I seriously disliked the last three of them I owned, and I kept buying them because I kept hoping that they'd produce something better. That train takes me nowhere so I got off their hamster wheel of progress. "I kept buying them because I kept hoping that they'd produce something better." Did you really mean to say that? How does the saying go? "Insanity is doing the same thing over and over again hoping for a different result!" Edited March 8, 2018 by roofus Quote Link to post Share on other sites More sharing options...
Guest VVJ Posted March 8, 2018 Share #32 Posted March 8, 2018 - The Zeiss ZM lenses are made by Cosina in Japan. Only the Distagon 15mm f/2.8 ist still made in Oberkochen in Germany. If Cosina made the Distagon 35mm/f1.4 ZM lens they did a pretty amazing job as far as I am concerned... Quote Link to post Share on other sites More sharing options...
hillavoider Posted March 9, 2018 Share #33 Posted March 9, 2018 If Leica was struggling for sales they could adopt Sony's more aggressive approach? Quote Link to post Share on other sites More sharing options...
LD_50 Posted March 9, 2018 Share #34 Posted March 9, 2018 The last thing Leica could or should do is try to compete with Sony with the same strategy. 2 Quote Link to post Share on other sites More sharing options...
sillbeers15 Posted March 9, 2018 Share #35 Posted March 9, 2018 If Leica was struggling for sales they could adopt Sony's more aggressive approach? I’m quite certain that Leica cannot adopt such businesses strategy as Sony cause Leica lack the financial resources and sensor development know how to do so and to sustain. Quote Link to post Share on other sites More sharing options...
Chaemono Posted March 9, 2018 Share #36 Posted March 9, 2018 (edited) Some cannibalization is inevitable but Leica has to be careful not to cannibalize M sales. The M is the cash cow, it requires minimal R&D investment, it has the highest margins. The cash cow funds the innovation to grow the TAM (total addressable market) and increase the SOW (share of wallet) with existing users. The R&D into the S, the Q, the CL, the SL, into the terrific S and SL lenses, the license payments for Panasonic’s technology/AF system, the commitment to TowerJazz’s capacity expansion wouldn’t be possible without the M. Slaying the cash cow inhibits their ability to fund innovation and to go after a huge TAM out there, the DSLR market. As others have said, Sony has deep pockets, Olympus, Fuji do, too. All Leica has is the cash cow called M. They are behind in FF sensor technology (but not for long ), they are behind in AF systems (need to work more closely with Panasonic if they can). If they don’t get the CL, the SL right, they will remain in their rangefinder niche for a long time (which is what some would like to see, I guess). The whole DSLR prize will then go to Sony, Olympus, Fuji, and the likes. Edited March 9, 2018 by Chaemono Quote Link to post Share on other sites More sharing options...
jaapv Posted March 9, 2018 Share #37 Posted March 9, 2018 They work very closely with Panasonic ,and have cooperation agreements. As their main sensor suppliers are Sony and Towerjazz, they have full access to advanced technology. Nor are the margins on their products public knowledge, I have the impression that the percentage on the M is rather low. I do not think your anaysis is valid. 1 Quote Link to post Share on other sites More sharing options...
darylgo Posted March 10, 2018 Share #38 Posted March 10, 2018 Some cannibalization is inevitable but Leica has to be careful not to cannibalize M sales. The M is the cash cow, it requires minimal R&D investment, it has the highest margins. The cash cow funds the innovation to grow the TAM (total addressable market) and increase the SOW (share of wallet) with existing users. The R&D into the S, the Q, the CL, the SL, into the terrific S and SL lenses, the license payments for Panasonic’s technology/AF system, the commitment to TowerJazz’s capacity expansion wouldn’t be possible without the M. Slaying the cash cow inhibits their ability to fund innovation and to go after a huge TAM out there, the DSLR market. As others have said, Sony has deep pockets, Olympus, Fuji do, too. All Leica has is the cash cow called M. They are behind in FF sensor technology (but not for long ), they are behind in AF systems (need to work more closely with Panasonic if they can). If they don’t get the CL, the SL right, they will remain in their rangefinder niche for a long time (which is what some would like to see, I guess). The whole DSLR prize will then go to Sony, Olympus, Fuji, and the likes. Can you elaborate on the FF sensor technology, specifically "but not for long"? Quote Link to post Share on other sites More sharing options...
mmx_2 Posted March 10, 2018 Share #39 Posted March 10, 2018 It can matter if a higher priced or more profitable system is cannibalised by a cheaper or less profitable one. For example, Leica might prefer to encourage sales of M or S lenses rather than cheaper and third party built TL lenses. This is true if you still believe that manufactures uses a “linear” pricing model (cost+fixed percent margin=sales price), but I would say that all manufacturers uses “market pricing”, meaning that the final sales price is based entirely on how much you believe customers are prepared to pay for a certain model. This has very little to do with the actual profit on a product. If Leica believes that customers are only prepared to pay 7000eur for an M, that should be their target sales price. If then profit is 1000eur or 5000eur of course makes a big difference in their books but have less impact on the sales price. It can very well be that Sony simply makes more money selling only one model at 2200dollars compared with several variants at different prices. It can also mean that Leica actually makes more money on the CL/SL than the M. The M is very complex from a mechanical point of view and requires extremely good QC to work properly, this has of course a large impact on the cost price but may or may not influence the end sales price, because of customers only are prepared to pay 7000 that is what they can charge. Quote Link to post Share on other sites More sharing options...
Chaemono Posted March 10, 2018 Share #40 Posted March 10, 2018 Can you elaborate on the FF sensor technology, specifically "but not for long"? "During 2017, we announced a partnership with Yuanchen Microelectronics for backside illumination manufacturing...will be ready for this mass production early second half of this year with multiple customers already having started their product designs.“ http://image-sensors-world.blogspot.de/2018/02/towerjazz-updates-on-its-cis-business.html 1 Quote Link to post Share on other sites More sharing options...
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