EXPANDING THE LEICA MARKET: Leica Pricing, Markets Addressed, Economics of New & Used

[Tom1234]

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PRICING THOUGHTS & MARKET SIZE 10-2020

EXPANDING LEICA MARKET THROUGH PRICING ADJUSTMENTS

Has Leica priced only for the super rich not the middle class or even worker-who-can-save?  With M10's going USED at $4,5000 TO $5,500 most people can not afford them.  Even used only the super rich can afford them.

If they had sold the new M10's around $4,500, about $2,000 above the $2,500 that the Asian cameras sell for, then used the Leica would sell for $2,000 to $3,000 where many could afford them.

Thus a used Leica's price would compete with new Asian camera prices.  This would give Leica a double market to sell to, both new and used, and greater market penetration (more sales), and a reason to expand their repair department which is greatly needed.

ECONOMIC SYSTEM PRICE POINT AND SIZE OF THE MARKET

If you can sell the trade-in camera, then it is normally easier to sell a new camera, is it not?   By hurting the trade-in used market with high priced used cameras, it must be harder to sell new $7,000 cameras.  Since the used cameras are selling at $4,5000+ then it could only be to a few very rich people - thus used cameras compete with Leica's   own new camera market.  I realize it is not this simple but I am sure you get my point. Could Leica could end up like Pentax & Rollei?

Leica might have a better "economic system", at a more reasonable new price and greater sales, with the accompanying better/larger repair department.  The existing repair department could not fully fix my Tri-Elmar 28-35-50 lens.

Is there demand at $3,500 to $4,500 new body price, for an M11?  At $3,500 you would likely convert some new-camera Asian-camera buyers to new-camera Leica-camera buyers.  That is about 40% more for a body than the Asian market can provide at $2,500.  At $4,500+ you probably loose this convert. 

LOCAL SALES

Probably due to this overpricing effect on both bodies and lenses, no camera store sells Leica in my home town.  My town is in a CSA (combined statistical area) population of 1,096,961.  Our top camera store told me years ago they could not carry a camera unless they could sell ONE a month, so they dropped Leica.   Lower used prices would give camera stores something to sell profitably (selling new cameras is hardly profitable I am told) and keep them in business.

TRADE-IN COMPETITION & PRICING

Trade-ins are NOT reasonably priced, when they are priced above the price of new Asian cameras, cameras that frankly exceed the capabilities of any Leica.  But of course the Asian cameras are a horror story of complexity to operate, so many users dislike them.  Asian digital cameras remove the sense of being an artist and turn you into a technician.

ALTERNATIVES & COLOR FEATURE

As now priced, Leica sends me to Panasonic S1, S1-R, S1-H or better yet Nikon Z6, Z7 which has very very close to the Leica-Euro color hues when using old Leica lenses as reports show with pictures.

Sadly with M10-R the Leica-Euro-Color may be lost in order to extend the dynamic range of the smaller pixel sensor?  Why not give a Euro-Color Leica-Look check box in the menus to select this color saturation level and loose the one or one-half stop of brightness that is needed to achieve it?  As long as the dark areas go black, and not to Noise, then it would be acceptable for many users.

Please take my comments as a hope for an expanded Leica market.  I also realize, that the market resolves all issues, and has a sort of fairness all its own that we must submit to.  I do enjoy the economic study.

Edited October 2, 2020 by Tom1234
Additional material

[Cobram]

Dear Tom,

Your thoughts are very interesting. Thank you for sharing them with us.

Somehow I compare Leica cameras to high end Swiss mechanical watches (Rolex, JLC, Omega etc). And interesting Swiss mechanical watches prices sky rocketed in last decade. The increment in price doesn't reflect in major quality improvements. It seems that every company want to define themselves as luxury goods company. And first thing they do is increase in prices. 

Leica adopted similar business model but with one very important difference. Swiss mechanical comapnies will service your watch for many many years. Leica will service your camera for a decade. The quality and speed of service is very important. Leica service department is not known for velocity nor superior quality but mostly high service costs.

So my conclusion is: Leica business model is clearly oriented in luxury goods niche. Most likely this model will fail because of not luxury service and disposable cameras. 

 

As a matter of fact two months ago I was on a wedding (as a guest) carrying my "luxury" not "serviceable" Leica M9 and bunch of lenses. There were also two official photographers with Nikon Z6 or Z7 cameras + few lenses. One of them saw my Leica and approached  me to see this marvelous camera in person. He was very very excited by its beauty, metal body and simple menu/buttons etc. We exchanged contacts and after a month he sent me few photos he took with Nikon. Now on your statement about Euro Color - Leica look: to my surprise his photos were really very very organic, sharp and colors were very good. Now I'm thinking to stop my Leica obsession and sell all my Leica stuff. I'm just tired of Leica quirks, very long service times, high prices etc. 

 

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[pedaes]

2 hours ago, Tom1234 said:

EXPANDING LEICA MARKET THROUGH PRICING ADJUSTMENTS

Personally, i think your analysis is very flawed and totally misunderstands Leica's market. I totally refute your notion that only the 'super-rich' can afford Leica's as absolute nonsense. 

You have also failed to address how your strategies would embrace current owners - and those on the waiting list for current cameras.

Of course, your post might just be a wind-up to have some fun. 

Sorry to hear about your Tri-Elmar.

Edited October 2, 2020 by pedaes

[Tom1234]

28 minutes ago, Cobram said:

Dear Tom,

Your thoughts are very interesting. Thank you for sharing them with us.

Somehow I compare Leica cameras to high end Swiss mechanical watches (Rolex, JLC, Omega etc). And interesting Swiss mechanical watches prices sky rocketed in last decade. The increment in price doesn't reflect in major quality improvements. It seems that every company want to define themselves as luxury goods company. And first thing they do is increase in prices. 

Leica adopted similar business model but with one very important difference. Swiss mechanical comapnies will service your watch for many many years. Leica will service your camera for a decade. The quality and speed of service is very important. Leica service department is not known for velocity nor superior quality but mostly high service costs.

So my conclusion is: Leica business model is clearly oriented in luxury goods niche. Most likely this model will fail because of not luxury service and disposable cameras. 

 

As a matter of fact two months ago I was on a wedding (as a guest) carrying my "luxury" not "serviceable" Leica M9 and bunch of lenses. There were also two official photographers with Nikon Z6 or Z7 cameras + few lenses. One of them saw my Leica and approached  me to see this marvelous camera in person. He was very very excited by its beauty, metal body and simple menu/buttons etc. We exchanged contacts and after a month he sent me few photos he took with Nikon. Now on your statement about Euro Color - Leica look: to my surprise his photos were really very very organic, sharp and colors were very good. Now I'm thinking to stop my Leica obsession and sell all my Leica stuff. I'm just tired of Leica quirks, very long service times, high prices etc. 

 

You and I have had the same experience.  I am looking at the Nikon Z's 6 & 7 for the same reasons.  I hearty agree that it is a mistake to have a high end camera without an equal repair department.  

I am thinking that with a few price adjustments Leica might double sales.  Pricing is very complex, an art as well as a science. One Entrepreneur-ing book I read said to look for price points, that once you hit them, a little lower or a little higher, resulted in a big increase in sales or revenue. 

It will be interesting to see how Leica handles its next products since leaving bankruptcy or whatever happened a few years ago.    

One Entrepreneur-ing book I read said to look for price points, that once you hit them, a little lower or a little higher, result in big increases in sales. 

[Tom1234]

19 minutes ago, pedaes said:

Personally, i think your analysis is very flawed and totally misunderstands Leica's market. I totally refute your notion that only the 'super-rich' can afford Leica's as absolute nonsense. 

You have also failed to address how your strategies would embrace current owners - and those on the waiting list for current cameras.

Of course, your post might just be a wind-up to have some fun. 

Sorry to hear about your Tri-Elmar.

The Asian camera companies pricing at $2,500 for an excellent camera are pricing for people that are NOT super-rich.  When Leica is selling at B&H New York, a mass selling discounter, the M10-p, m10-r, and m10-mono for $8,295 that is for the super-rich.  If you have the time to re-read my post, it does explain itself, but if you love Leica equipment as much as I do, it might be frustrating to read. 

https://www.bhphotovideo.com/c/search?Ntt=leica m10&N=0&InitialSearch=yes&sts=ma

I love Leica but they have booted me out of their marketplace with their pricing.  

[pedaes]

17 minutes ago, Tom1234 said:

I love Leica but they have booted me out of their marketplace with their pricing.

Again, this is total nonsense. Leica has always been a premium priced manufacturer. If you take the price of a M3 new in 1954 and uplift it for inflation it stands comparison with todays price for a MA. Similarly with a 50mm Summicron.

Now, whether you personally want to be, or are comfortable, in this segment is a different debate.

Edited October 2, 2020 by pedaes

[Tom1234]

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Edited October 2, 2020 by Tom1234

[Tom1234]

21 minutes ago, pedaes said:

Again, this is total nonsense. Leica has always been a premium priced manufacturer. If you take the price of a M3 new in 1954 and uplift it for inflation it stands comparison with todays price for a MA. Similarly with a 50mm Summicron.

Now, whether you personally want to be, or are comfortable, in this segment is a different debate.

I have been buying Leica for the last 15 years… only lately are their prices too high even in the used market. 

 

[jaapv]

40 minutes ago, Tom1234 said:

The Asian camera companies pricing at $2,500 for an excellent camera are pricing for people that are NOT super-rich.  When Leica is selling at B&H New York, a mass selling discounter, the M10-p, m10-r, and m10-mono for $8,295 that is for the super-rich.  If you have the time to re-read my post, it does explain itself, but if you love Leica equipment as much as I do, it might be frustrating to read. 

https://www.bhphotovideo.com/c/search?Ntt=leica m10&N=0&InitialSearch=yes&sts=ma

I love Leica but they have booted me out of their marketplace with their pricing.  

Last time I looked a Nikon D6 cost 7200 Euro...

[tritentrue]

3 hours ago, Tom1234 said:

LOCAL SALES

Probably due to this overpricing effect on both bodies and lenses, no camera store sells Leica in my home town.  My town is in a CSA (combined statistical area) population of 1,096,961.  Our top camera store told me years ago they could not carry a camera unless they could sell ONE a month, so they dropped Leica.   Lower used prices would give camera stores something to sell profitably (selling new cameras is hardly profitable I am told) and keep them in business.

Focusing on one point in particular:  my town has a citizen + permanent resident population of about 4 million.  In addition to supporting several camera shops that sell most of the Leica lineup of photo gear and binoculars, there are also THREE Leica stores.  The Leica secondhand and collectible markets are fairly robust as well, even in current economic conditions.  

Oh, and my town happens to be in the middle of "third world" southeast Asia, where--oddly---those lower-priced Asian-made Panasonic L-mount cameras don't seem to be faring so well.  You're obviously entitled to your view, but a glance beyond your own borders might prove to be enlightening.

 

[Tom1234]

USA economics are different than in your country.  The USA at one time bought 1/2 of most international company's goods but today their prices are too high for most of us.  I am glad you people can have so many Leica stores.   I don't think we can directly compare our economies.

[tritentrue]

I'm not comparing economies, just pointing out that the market for Leica and other brands may not necessarily be the same in other towns (or among other people) as it is in yours.  BTW, the "you people" writing this post is 14th-generation American. 🙃

[Tom1234]

Missunderstanding

Edited October 2, 2020 by Tom1234
miss understanding

[Cobram]

Few days ago I had to browse my photo archive in order to find any family photofor my little daughter's school project.

Believe it or not at the end I was terrifed how good are my old Fuji APSC photos comparing to Leica M9 results. Leica is considerably better at BW rendering but for color family photos Fuji wins hands down. What really intrigued me was skin color comparison. Fuji photos exhibited beautiful natural skin tones with very good blue sky and green tree background while Leica photos tend to produce redish/orange skin tones. Definitely not natural looking. As far as I can see from photos posted online, Leica M10 also suffers from redish/violet skin tones. But this is maybe only my observation (I don't own Leica M10). Another funny thing: people with natural skin without any redness tend to get "achoholic" red nose and cheeks 🙂 on my Leica photos... 

I do however think Leica delivers best 3D effect especially in BW photos. 

Leica prices are definitely too high for photographers 🙂

 

[Tom1234]

I have seen the same as you with M10 photos taking the red on a nose and making it too pronounced. 

As for skin tones, years ago in film school I used Fuji film and Kodak film.  The Fuji got the skin tones right on an Asian person.  The Kodak got the skin tone right for a Caucasian person.  Skin tones are hard to get correct and maybe if you can get one culture you can not get another? 

I haven't left Leica yet but in the past I could always afford an 8+ to Mint example of the previous camera model but today I can not.  Nikon Z6 or Z7 may get me since I own an old Tokina-Nikon-F lens kit of 2.8 zooms and user reports say and show that Leica lenses on the Nikon have the Leica color cast… this may be a sweet combination.  You and others have reported about the Fuji Camera doing the same.  If Fuji had a full frame camera I would look at it for sure. 

[pedaes]

2 minutes ago, Tom1234 said:

but today I can not

For every looser there is a winner. I am pleased the camera's are holding their value!

[carbon_dragon]

Well, the situation in the past (pre-digital, and especially pre-electronics) isn't the same as the CURRENT situation. In the past, you could amortize the cost of a Leica over a longer number of years. Sure the M2 you were eyeing was expensive, BUT you could use it for decades if you wanted to. And because of this they held their value very well as well. It's still the case that an older digital M CAN last for a long time. They are, in general, very well made BUT the recent M9 sensor issue has demonstrated quite clearly that digital Ms have a limit on guaranteed ability to repair (due to parts scarcity). Owner of Contax RTS cameras have learned this already. So now the price of the new cameras is not quite as "affordable" IMHO.

But I don't believe this has sunk in to the market. In any case, I think the pricing might produce a long term problem for Leica but I guess we'll see. At 63 my M10 might still outlast me, but if I were doing it over again, I might go a different route. 

[pedaes]

9 minutes ago, carbon_dragon said:

So now the price of the new cameras is not quite as "affordable" IMHO.

The OP seems to be complaining about the high price of used cameras (he says condition "8+ to Mint).

[Tom1234]

2 minutes ago, carbon_dragon said:

Well, the situation in the past (pre-digital, and especially pre-electronics) isn't the same as the CURRENT situation. In the past, you could amortize the cost of a Leica over a longer number of years. Sure the M2 you were eyeing was expensive, BUT you could use it for decades if you wanted to. And because of this they held their value very well as well. It's still the case that an older digital M CAN last for a long time. They are, in general, very well made BUT the recent M9 sensor issue has demonstrated quite clearly that digital Ms have a limit on guaranteed ability to repair (due to parts scarcity). Owner of Contax RTS cameras have learned this already. So now the price of the new cameras is not quite as "affordable" IMHO.

But I don't believe this has sunk in to the market. In any case, I think the pricing might produce a long term problem for Leica but I guess we'll see. At 63 my M10 might still outlast me, but if I were doing it over again, I might go a different route. 

You make an excellent point.  The switch from film to digital, with the digital's technology change outdating the camera so quickly, and the poor repair experiences, has changed the Leica market from what it was, a Long Term purchase, into a short term purchase, so who wants to pay top dollar for that?  

Yet the M10 has such good dynamic range, who needs a new camera after that?  I feel sorry for Leica since they are getting hit by both sides of the equation so to speak, as this digital market matures.  

Yet they can always improve the camera, make it simpler and add video to the M so you can switch quickly, like when doing flower photography if a bee flys by you could catch it on video.  Ultimately Leica may end up in a perfecting-the-concept design stage where the changes in new models is very small.    

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[carbon_dragon]

Right. I would have used my Contax RTS camera for a lot longer if I had been able to. But when the electronics failed I couldn't. And no-one could repair it. It's definitely true that a Leica M9 (or even M8) still takes great pictures. Do you really need a better camera? Probably not. But the question is how long will you be able to continue to use it? I think the Leica M form factor is an inspired timeless product and I'm glad to use them. Hopefully mine will continue to work since I'm already invested.