Price increase Oct. 01, 2007 - buy until tomorrow or is earlier decision needed?

[citrus]

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I just checked at amazon.com and they have only two Leica M8 bodies in black left in-stock - this puts pressure on all of us that are still sitting at the fence. I might take the leap though over the fence.

 

Do you also think that Leica will be able to push through with their price increase?

 

I am guessing that they will try as the USD/EUR exchange rate speaks towards price increase.

 

Need to take a decision quickly within the next hour or so as it is only 3500 EUR at current exchange rate compared to 4195 EUR in Europe - the difference of whopping 700 EUR nearly makes the first lens to go with it.

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[stunsworth]

Are you based in Europe? If so you will probably need to add import duty and VAT onto the US price - assuming it gets stopped by customs.

[Shootist]

I don't think Leica will have to PUSH anything. They are raising the price, whether or not the dealers or customers like it.

Buy now for less or later for more. To be honest you already missed the boat. The price was even lower 4-5 months ago. This will be the second price increase.

[Guest tummydoc]

I believe that stockists might end up having to sell off current stock at the former price if people acquiesce to the new price conditional upon receiving an M8 with 1.108 firmware. Of course Leica could always support their stockist network by making it privately available for them to update their M8s on-hand.

[J_Brittenson]

Are they raising prices across the board, or only for the M8?

[dougdarter]

I believe that stockists might end up having to sell off current stock at the former price if people acquiesce to the new price conditional upon receiving an M8 with 1.108 firmware. Of course Leica could always support their stockist network by making it privately available for them to update their M8s on-hand.

 

Apart from forum members, or others 'in the know', I seriously doubt that anybody else will even be aware of the firmware change, and even if they did, would it bother them??

 

Most members of the public wanting an M8 will pay the going price, irrespective of the firmware version. Personally, I don't care which firmware version my camera has, I'll update it, as and when necessary.

 

I have no doubt whatsoever, that Leica will support current M8 owners with whatever firmware is necessary, and when the current model, and the model with a slightly different cct board rationalise, and use the same firmware updates (as promised), there won't be any difference at all.

 

I actually fail to see what all the fuss is about. My camera is still as good as ever, and the introduction of transitional but incompatible firmware for another camera won't in the least affect the way it works, nor will the fact that some other cameras have a new, albeit altered cct board. It's still an M8!!

[Olsen]

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Sure, there is going to a Leica M8 price increase. And this price increase is going to hit americans, first of all.

 

Look; while purchasing power of americans are falling in pace with the fall of the dollar,- even in dollars the median house hold income has fallen with 1,000 $ since 2000, many europeans have seen a 50% increase in purchasing power in 10 years, in local currency. That's close to 100% purchasing power increase in dollars. A qualified car mechanic in Oslo can earn 50.000 NOK per month. That's 100,000 dollars a year. He will deduct 35 - 40% tax covering health care and a pension sceeme securing him a lavish pension, education for his kids through university etc. etc. A Volvo assembler at Thorslanda can easily make 6 - 700.000 SEK per year. Also 100,000 dollars with the same tax bracket and public services, - even having partly dentist treatments included. (Check that to the GM workers in the US). German workers are not far behind. The dollar rate at Oslo Stock Exchange is now 5,50 NOK and still falling. Back in 1998 it was NOK 9,95.

 

USA? Listening to european investors, - some of the richest pension funds in the world; that is all 'rotten loans', 'huge consumer debt', 'badly run multi nationals' by 'greedy managment', - then it is the social & political scene with everything from Guantanamo to 'the guy in the White House'. It does not look good for the future.

 

Read my lips; Leica prices are going up. In dollars.

[luigi bertolotti]

Agree with Olsen... would be interesting to see some Leica figures about M8 sales in US... but I think they cannot continue to fetch so less than from Europe... even if, as I said in another thread, I think a good share of M8 industrial cost is in US$

[Olsen]

Luigi,

 

The Leica managment, like many industry managers in Europe, I am sure, ranging from Mercedes Benz & Nokia to Airbus & Unilever, are stiring at the dollar rate and hoping for Santa Clause. If this does not get better, - it won't, they will have to turn around and fire employees by the thousands.

 

The trade across the Atlantic is 'the' most important trade route in the world. When that slows down it will be felt all over the world.

[citrus]

Luigi,

 

The Leica managment, like many industry managers in Europe, I am sure, ranging from Mercedes Benz & Nokia to Airbus & Unilever, are stiring at the dollar rate and hoping for Santa Clause. If this does not get better, - it won't, they will have to turn around and fire employees by the thousands.

 

The trade across the Atlantic is 'the' most important trade route in the world. When that slows down it will be felt all over the world.

 

Luigi,

 

its mad to see from a European perspective that there is many things rotting in the US, speculative, bubble-like, debt driven and weighing on generations. The humble Europe and fast growing Asia is outpacing the US already since several years - the route across the atlantic is still important - but loosing its influence. I am not so sure if the route across the atlantic will really maintain a significance but will rather lead people and businesses to turn their back and look into other directions (mid- to long-term).

 

The price increase of the M8 is an indication on how much care there is for purchasing power - if sales drop in the US, there may be more value added markets elsewhere to turn. It shows Leicas strength and optimism, one might think..... Once the value proposition of other markets have been exploited there may be a return to less intersting markets like the US (from a profitability point of view as exporter). In the meantime please have people work on the fundamentals in the US to start to build on a solid foundation instead of high portions of bad debt.

 

just my 0,02 cents.

[ArtZ]

Luigi,

 

The Leica managment, like many industry managers in Europe, I am sure, ranging from Mercedes Benz & Nokia to Airbus & Unilever, are stiring at the dollar rate and hoping for Santa Clause. If this does not get better, - it won't, they will have to turn around and fire employees by the thousands.

 

The trade across the Atlantic is 'the' most important trade route in the world. When that slows down it will be felt all over the world.

 

Tom,

 

Most of the Countries in the Euro zone want to keep the Euro strong. Angela Merkel in particular.

 

The Central European Bank is completely independent of EU Governments and Mr. Trichet confirmed a couple of days ago that they're not going to reduce the interest rates. As stated by the Central European Bank the normal exchange rate should be 1 € = 1,30 USD. Most EU countries have made 2008 budget on this basis.

 

Germany is the biggest exporter in the EU and German companies are happy with the high Euro because the products they export have no competitors abroad.

 

Besides, an strong Euro makes our energy bill and each country internal debt cheaper. For instance, Italy which had an increadible internal debt was highly reduced in these last years thanks to the low cost of the USD. Same thing happens in France. Our debt is 60% of the PIB. If the price of the Euro was lower, we will be paying much more in interests.

 

Large companies, like Airbus, have an insurance which cover their losses. The problem with a strong Euro concerns more the small/medium companies which export more than 50% of their production outside the UE and who cannot afford this kind of insurance.

 

The States, with the new interest rates (FED) drop may face the danger than Asian Countries and developing Countries, like Brazil, will start buying American companies (like Microsoft, HP, Ford, etc.) instead of buying US Tresor Obligations.

.

[Olsen]

Tom,

 

Most of the Countries in the Euro zone want to keep the Euro strong. Angela Merkel in particular.

 

The Central European Bank is completely independent of EU Governments and Mr. Trichet confirmed a couple of days ago that they're not going to reduce the interest rates. As stated by the Central European Bank the normal exchange rate should be 1 € = 1,30 USD. Most EU countries have made 2008 budget on this basis.

 

Germany is the biggest exporter in the EU and German companies are happy with the high Euro because the products they export have no competitors abroad.

 

Besides, an strong Euro makes our energy bill and each country internal debt cheaper. For instance, Italy which had an increadible internal debt was highly reduced in these last years thanks to the low cost of the USD. Same thing happens in France. Our debt is 60% of the PIB. If the price of the Euro was lower, we will be paying much more in interests.

 

Large companies, like Airbus, have an insurance which cover their losses. The problem with a strong Euro concerns more the small/medium companies which export more than 50% of their production outside the UE and who cannot afford this kind of insurance.

 

The States, with the new interest rates (FED) drop may face the danger than Asian Countries and developing Countries, like Brazil, will start buying American companies (like Microsoft, HP, Ford, etc.) instead of buying US Tresor Obligations.

.

 

"Most of the Countries in the Euro zone want to keep the Euro strong.."

 

This depends on who you are speaking to. If you are importing Caterpillar earthmoving equipment from USA or rubber shoes from Malaysia, a strong Euro is fine. For Daimler Benz and WV (and Leica!) - and their employees, it is 'not good'. You have to increase your export prices in dollars to cover cost. Germany is going to see a growth in unemployment due to the strong Euro. It puzzles me that Angela Merkel think this is OK, but I am not suprised.

 

"the normal exchange rate should be 1 € = 1,30 USD.."

 

- Agree. But it won't.

 

"Large companies, like Airbus, have an insurance which cover their losses..."

 

- No! They have not! Just Airbus is in the process of reducing staff. By the thousands. One of the Big Winners of a low dollar is the competitor; Boeing!

 

"The States,........may face the danger than Asian Countries and developing Countries, like Brazil, will start buying American companies (like Microsoft, HP, Ford, etc.).."

 

- The buyer with Big Bucks is Europe! But I think it is a good thing. Americans should not fear that their multinationals are being bought up by european competitors. European managment is not so greedy as their american counterparts and more used to taking social responsibility, pay taxes, cooperate with trade unions etc.

 

Apropos: Looking up shareholder lists of major US banks it is astonishing to see how rich arabs are exposed with large positions....

[ArtZ]

"Most of the Countries in the Euro zone want to keep the Euro strong.."

 

This depends on who you are speaking to. If you are importing Caterpillar earthmoving equipment from USA or rubber shoes from Malaysia, a strong Euro is fine. For Daimler Benz and WV (and Leica!) - and their employees, it is 'not good'. You have to increase your export prices in dollars to cover cost. Germany is going to see a growth in unemployment due to the strong Euro. It puzzles me that Angela Merkel think this is OK, but I am not suprised.

 

"the normal exchange rate should be 1 € = 1,30 USD.."

 

- Agree. But it won't.

 

"Large companies, like Airbus, have an insurance which cover their losses..."

 

- No! They have not! Just Airbus is in the process of reducing staff. By the thousands. One of the Big Winners of a low dollar is the competitor; Boeing!

 

"EADS (Airbus is a division of EADS) has therefore implemented an exchange rate strategy in order to manage and minimize such exposure. In order to secure the rates at which U.S. Dollar revenues (arising primarily at Airbus and in the commercial satellite business) are converted into Euro or Pounds Sterling, EADS manages a long-term hedging portfolio. There are complexities inherent in determining whether and when foreign exchange rate exposure of EADS will materialize, in particular given the possibility of unpredictable revenue variations arising from order cancellations and postponements. Furthermore, as a significant portion of EADS’ foreign currency exposure is hedged through contractual arrangements with third parties, EADS is exposed to the risk of non-performance by its hedging counterparties."

 

Sorry if you understood an insurance policy at an insurance company. I didn't mean that. I meant "EADS’ exchange rate hedging strategy aims to cover its cash flows, and, to a large extent, earnings before interest and taxes, pre-goodwill impairment and exceptionals"

 

For more information:

 

EADS Annual Report and Registration Document 2006 - Exposure to Foreign Currencies

 

 

"The States,........may face the danger than Asian Countries and developing Countries, like Brazil, will start buying American companies (like Microsoft, HP, Ford, etc.).."

 

- The buyer with Big Bucks is Europe! But I think it is a good thing. Americans should not fear that their multinationals are being bought up by european competitors. European managment is not so greedy as their american counterparts and more used to taking social responsibility, pay taxes, cooperate with trade unions etc.

 

Apropos: Looking up shareholder lists of major US banks it is astonishing to see how rich arabs are exposed with large positions....

 

China (not Europe) is the Country who holds more US Tresor obligations in the World. If China will ask the USA to cash all the US Tresor Obligations they have, the situation in the US will be worse than in 1929. As the price of the USD is sinking, they just prefer to buy and/or invest in US companies.

 

Our French Bush (AKA N.Sarkozy) would love that the Euro will be less strong but most of the European Countries (Germany is in the head) refuse this. Economists in France maintain that our President knows nothing about economics and a Euro at less than 1.30/1.35 USD will be suicide, especially after 15 milliard Euros offered by our actual President to the most wealthy people in France and 60% public debt payable in USD.

 

Few days ago we could watch on a finnacial emission on TV how German companies face to the price of the Euro. All of them were very happy with the actual price. The economies they realize buying raw materials abroad at a cheaper prices compensate their loses in export exchange rates outside of the EU. Everybody agreed that the price of the Euro will reach 1.50 USD will be the inflexion point. But this seems to be not probable.

 

Leica, Mercedes, etc. employers are very happy to pay less for petrol, gaz and be able to travel around the World for much less.

 

As Norway is not in the Euro zone (it was against the Euro), I find difficult to believe that you have a neutral opinion.

.

[Samir Jahjah]

I just checked at amazon.com and they have only two Leica M8 bodies in black left in-stock - this puts pressure on all of us that are still sitting at the fence. I might take the leap though over the fence.

 

Do you also think that Leica will be able to push through with their price increase?

 

I am guessing that they will try as the USD/EUR exchange rate speaks towards price increase.

 

Need to take a decision quickly within the next hour or so as it is only 3500 EUR at current exchange rate compared to 4195 EUR in Europe - the difference of whopping 700 EUR nearly makes the first lens to go with it.

 

Or you can get a used M8 at popflash for $4000, not a bad price

 

LEICA M8 10 MEGAPIXEL

[RMF]

The States, with the new interest rates (FED) drop may face the danger than Asian Countries and developing Countries, like Brazil, will start buying American companies (like Microsoft, HP, Ford, etc.) instead of buying US Tresor Obligations.

.

 

Buying Microsoft?? ahh...I don't think that would (could) ever happen.

[Olsen]

"EADS (Airbus is a division of EADS) has therefore implemented an exchange rate strategy in order to manage and minimize such exposure. In order to secure the rates at which U.S. Dollar revenues (arising primarily at Airbus and in the commercial satellite business) are converted into Euro or Pounds Sterling, EADS manages a long-term hedging portfolio. There are complexities inherent in determining whether and when foreign exchange rate exposure of EADS will materialize, in particular given the possibility of unpredictable revenue variations arising from order cancellations and postponements. Furthermore, as a significant portion of EADS’ foreign currency exposure is hedged through contractual arrangements with third parties, EADS is exposed to the risk of non-performance by its hedging counterparties."

 

Sorry if you understood an insurance policy at an insurance company. I didn't mean that. I meant "EADS’ exchange rate hedging strategy aims to cover its cash flows, and, to a large extent, earnings before interest and taxes, pre-goodwill impairment and exceptionals"

 

For more information:

 

EADS Annual Report and Registration Document 2006 - Exposure to Foreign Currencies

 

 

 

 

China (not Europe) is the Country who holds more US Tresor obligations in the World. If China will ask the USA to cash all the US Tresor Obligations they have, the situation in the US will be worse than in 1929. As the price of the USD is sinking, they just prefer to buy and/or invest in US companies.

 

Our French Bush (AKA N.Sarkozy) would love that the Euro will be less strong but most of the European Countries (Germany is in the head) refuse this. Economists in France maintain that our President knows nothing about economics and a Euro at less than 1.30/1.35 USD will be suicide, especially after 15 milliard Euros offered by our actual President to the most wealthy people in France and 60% public debt payable in USD.

 

Few days ago we could watch on a finnacial emission on TV how German companies face to the price of the Euro. All of them were very happy with the actual price. The economies they realize buying raw materials abroad at a cheaper prices compensate their loses in export exchange rates outside of the EU. Everybody agreed that the price of the Euro will reach 1.50 USD will be the inflexion point. But this seems to be not probable.

 

Leica, Mercedes, etc. employers are very happy to pay less for petrol, gaz and be able to travel around the World for much less.

 

As Norway is not in the Euro zone (it was against the Euro), I find difficult to believe that you have a neutral opinion.

.

 

1)

Long term foreign exchange hedging is quite common for all multi nationals with costs and income in foreign currency. 'It costs money' to use this service. In a way you are splitting your profit with your bank. What you do is to buy or sell foreign currency in the 'forward market'. This is no waranty for 'good' and 'favourable' currency rates. Quite on the contrary. As my boss sayes; trading forward is like betting with the bank. The bank usually wins. The company I am working for do less than 50% of our currency trade 'forward'.

 

EADS? I wish them good luck...

 

2)

That China should sell their US treasury bills in such a way that their value will crash is quite unrealistic. Thanks God. It would spell the end of sivilisation as we know it.

 

3)

I am no big fan of Sarkozy, but on the issue of the uneccessary strong Euro I agree with him. It will bring unemployment and slow world trade. Why the germans should wish for a strong Euro is beond me. They are the worlds largest exporter. Sure, countries with a high foreign dept, like Italy, will have to cover a lower interest cost with a high local currency: I.e.lower taxes. That Sarkozy offers tax relief to the richest will not create growth - bigger cake, only a more unfair way of splitting the cake. But this must be the way the french wants to have it. He was elected....

 

4)

Sure, the employees of Leica etc. can reap the advantages of a strong currency. Like lower taxes (less interest payable on foreign debt), lower prices of imported goods and energy. - As long as they have a job. I guess that the large german exporters will start laying off people next spring.

 

5)

Norway is not in the Euro zone. Which I think is unfortunate; the less currencies the better. Neither are we members of the European Union. Which I think is just fine. EU offers nothing for ordinary people. But our problem is our super-strong Norwegian Kroners which has increased close to 100% towards dollars in 10 years. - Which is just fine with all the importers (rubber shoes & earthmoving equipment and all that), but hell for norwegian exporters.

[carstenw]

Buying Microsoft?? ahh...I don't think that would (could) ever happen.

How much cash reserves do they have? $50 billion? I'll buy it for $25 billion. Can I post-date the cheque?

[Venkman]

Germany is the biggest exporter in the EU and German companies are happy with the high Euro because the products they export have no competitors abroad.

 

And silly me thought the export business would be suffering, because they get paid in foreign currency, which isn't as much worth as it used to be when they negotiated or fixed prices.

 

And because of that, they need cover by insurances in order to compensate those losses.

 

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Hallo,

Look here: Leica M

[Olsen]

Buying Microsoft?? ahh...I don't think that would (could) ever happen.

 

That's what they thought in in Sweden too; Volvo and Saab is too big and 'important' to be bought up. What it took was a crash of the Swedish kroner by 20 - 25% and a crash of the stock market with 30 - 35%. Then Ford and GM went in and bought them. Which shows how good US companies have been at utilizing their - once - strong dollar - Now they want to sell them.

 

Microsoft? It is just the kind of company that it 'could' happen to. Whether it will...hum!

 

More obvious targets for foreign interests are US steel mills & mines. They are badly managed cheap. Just as obvious is the US car industry; with a over-payed and incompetent managment, - and under-payed and excellent workers. I could also mention food & beverage and agriculture. And so on. Say, if the russians went in and bought US weapons industry. Guess who is laughing then...

[Olsen]

How much cash reserves do they have? $50 billion? I'll buy it for $25 billion. Can I post-date the cheque?

 

50 billion US$ - ? Microsoft must be worth much more than that, or..?

 

Funds of, say, Norway a nation half the size of Ohio (pop. 4,7 million) has a pension fund - placed overseas - of 370 billion US$. The fund (you find them here: ttp://www.norges-bank.no/default____25991.aspx ) are forbidden to place such large single posts in the stock market, but it shows that 'buying Microsoft surely is possible'. A crash of the stock market - that can't be far ahead - will make it even easier.