Leica Camera Sales Down 38%

[stuny]

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Jim -

 

The "import" auto manufacturing in the US is a rather different story compared to domestic auto manufacturing. Decades of labor/management negotiations have pushed up not only the wages but also all the fringes, contributing to the current situation with the "domestics". The "import" plants start with new wage and fringe situations, in markets actively courting their plants for jobs. The result? When you factor in transoceanic shipping of these large items, making them here makes economic sense. Cameras and lenses are far smaller, lighter, and "denser" in value. Shipping does not play such a key cost role. Further, virtually all the jobs would require high levels of skill. In auto manufacturing the skill levels are quite wide. Generally, the higher the skills level the higher the wages.

 

All the more reason we agree that Leica is unlikely to manufacture in the US.

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[dominic]

The deficit was forecast:

 

"For fiscal year 2008/2009 we expect a budgeted

net loss, resulting especially from the delay in development

projects. For fiscal year 2009/2010 we intend to achieve a

break-even or slightly positive result"

 

See:

 

Leica Camera AG - Investor Relations - Annual Reports

 

 

So don't worry : it's only an air pocket!

[leicanewbie]

Thanks for the link to the annual report.

 

Actually for those who haven't read it, it's pretty interesting stuff. Overall the sales last year had improved,

though several places in the report are mentions of the challenges that the digital market has posed for Leica.

 

Some interesting passages

 

- the company board seems to feel that sport optics has been a neglected are of their business

 

- they are committed to the "Made in Germany" branding, so they are getting parts made in Portugal

I believe but they will not stray from assembly and manufacturing in Germany.

They have made significant improvements and investments in process to speed time to market.

 

- they remain focused on the high-end as a strategy. They had excellent results from the Panasonic partnership and the DLUX3 model, and this will continue.

The system cameras are key for their development and I'm reading between the lines that they will continue to address

the top of the market and keep their pricing in line with this.

 

 

 

In a couple of places there's mention of the AFRIka project and it's timeliness and impact on the company's financial postion.

.... anybody know what this project is about? I'm guessing by the acronym it might mean "auto focus reflex" camera?

[andybarton]

 

In a couple of places there's mention of the AFRIka project and it's timeliness and impact on the company's financial postion.

.... anybody know what this project is about? I'm guessing by the acronym it might mean "auto focus reflex" camera?

 

Do a search for AFRika here

 

What's "Auto Focus Reflex" in German?

[veraikon]

What's "Auto Focus Reflex" in German?

A "Auto Focus [spiegel]Reflex-Kamera" AFR.ka - missing only the "i" .

But naming projects - not only industry but also in educational frame- is a funplay - may the "i" is with out any function.... AFRika sounds better than AFRka

The other hint to AF is the title of the master theses mentioned at the Leica Homepage

[Pebbble]

I apologise in advance for what I am about to say, as I am not a Leica aficionado but I can’t help drawing parallels between the current fortunes of Leica and Apple in the late 90s, just before Steve Jobs returned and rescued the company with Mac OSX and the Ipod. I am sure some of you have already suggested this in previous posts.

 

Leica cannot compete with the financial muscle of the likes of Nikon and Canon and latterly Sony and Samsung. It has a great back catalogue with its lenses and M series film cameras. However, I personally think that the M8 is not as good as some of the best digital SLRs (now don’t kill me!). The quality:cost ratio is likely to limit the appeal of the current digital offerings to the existing Leica fan base and those with a healthy bank balance.

 

As with Apple in the late 90s/ early 2000s, Leica needs to seriously re-evaluate its strength and position itself squarely in that zone and let go of what others do better. As I say, I am not a Leica afficiando, but it seems to me that they could do a lot worse in the next 3 years than to:

 

(a) Educate people about rangefinders as a unique and interesting way of capturing the world compared to an SLR system ( ie Mac OSX v Windows);

 

( Reduce the offering to just one M camera and one compact and leave the SLR market to the Canon and the others. The M camera should be full frame and the compact an improved version of Sigma’s DP1.

 

© Develop more zoom lenses (again don’t kill me) akin say to the Nikon 18-200mm VR, which would have mass appeal for the keen amateur who may not want to have or be able to afford several Leica lenses but still wants to buy into the M system.

 

(d) Open up a few Apple type stores where the product is as much about lifestyle as it is about functionality. The stores would give people who have never heard of Leica or used one have the opportunity to handle it and understand the history of Leicas in photography. And like Apple, have courses in the store on using a rangefinder.

 

 

Now I know people will perhaps balk at this suggestion and argue that Leica is not any old product and should not be “selling out”. Some will also find unpalatable the thought of any old Sunday snapper being able to pick up a Leica without much idea of what they are doing. But I also think that without re-establishing a connection with a wider consumer market and helping them to understand the unique properties and pleasures of rangefinders, then I fear that there is a risk of Leica being consigned to history.

 

Ok give me a 50 metre head start before you all start to stone me!

[earleygallery]

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© Develop more zoom lenses (again don’t kill me) akin say to the Nikon 18-200mm VR, which would have mass appeal for the keen amateur who may not want to have or be able to afford several Leica lenses but still wants to buy into the M system.

 

OK, that's about 50 meters.........

 

So how will the zoom lenses work on the M ?

[earleygallery]

The 'Madonna M' is the best idea so far. It will come pre loaded with the full back catalogue to watch on the LCD when you're fed up with taking photos - obviously it will also need a headphone socket and ideally stereo speakers built in. Pink griptac and a 'chrome-plated' shiny finish to round it off.

[andybarton]

The viewfinder frames lines would need to be continuously variable too... via electronics. Which will not fail.

 

But the viewfinder would have to be dimmer to cope with the LCD element within, probably.

[earleygallery]

The viewfinder frames lines would need to be continuously variable too... via electronics. Which will not fail.

 

But the viewfinder would have to be dimmer to cope with the LCD element within, probably.

 

So, maybe the answer is to do away with the rangefinder, use a live lcd viewfinder and fit it with a 28-90 zoom lens? That covers most M users needs anyway. May as well build in a flash unit and if they're going down the zoom/lcd viewfinder route its probably easier to make it AF too.

[Pebbble]

James I have no idea and perhaps the physics of the current system (or indeed any) may never be able to achieve. My point is that Leica has to re-establish the rangefinder in the wider consumer Market. One aspect of it would be to develop a system that could provide a "one for all" lens which may attract those that currently find Leica prohibitively expensive and/or whose needs are no more than recording holidays and family occasions.

 

Regards

Roh

[chris_livsey]

I apologise in advance for what I am about to say, as I am not a Leica aficionado

( Reduce the offering to just one M camera

 

MP

[tollie]

I think there is a lot to what Pebble says... OK the zoom lens stuff is not in keeping with the Leica way but one might be able to develop a three focal length lens... say 28 50 75 or something like that.

 

What I really like is the putting the rangefinder concept up front... it really is a very different way to approach photography...

 

I also like the emphisis on education and turning the existing Leica galleries ( I think there is one in NYC, Paris and Tokyo) into resources for promoting the concept to those who may have an interest in this style of work.

[earleygallery]

James I have no idea and perhaps the physics of the current system (or indeed any) may never be able to achieve. My point is that Leica has to re-establish the rangefinder in the wider consumer Market. One aspect of it would be to develop a system that could provide a "one for all" lens which may attract those that currently find Leica prohibitively expensive and/or whose needs are no more than recording holidays and family occasions.

 

Regards

Roh

 

Roh,

 

Some of your ideas are interesting but fundamentally, I think you need to be a Leica user to understand why some of the points you make will never work.

 

There can be no 'one for all' rangefinder lens - if you need long telephoto or macro lenses then an SLR is the way to go. We're all waiting to see what Leica do about that. But that doesn't fit with your 1 M and a compact only strategy (and would leave lots of existing Leica R users very erm upset).

 

A zoom can't work on a rangefinder either. They have made vari focal length lenses - but they have much smaller apertures and are much more expensive. OK it might not be impossible to design a zoom rangefinder but it would by nature be much more complicated and expensive than an SLR equivalent, so what would be the point?

 

The rangefinder is by no means a 'one size fits all' type of camera, and nor should it be. It has unique qualities and it suited to certain applications. Leica needs to play to its strengths - which I think it is.

 

But then Leica isn't just about rangefinders. They are about SLRs and compacts too. The Panasonic partnership is no doubt very lucrative for Leica and their digicams have been very successful. Why shun that income stream?

 

I don't think Leica is a ship drifting at sea right now. The owner is a very wealth individual and from what I have read/heard he seems to have a longer term strategy in mind for the business and where he wants to take it. Time will tell if he has the right ideas but ultimately the test will be if the products sell.

 

Most manufacturers of consumer goods are seeing downturns in their sales this year due to all the credit crunch issues, I know of one major company for example who are predicting roughly 30% drop in sales.

 

The figure for Leica is actually rather surprising - I would have thought that it would be more extreme - given the fact that they have an outdated (by comparable products) range of digicams, an end of line SLR range and all the rumours about updates to the M model. If they address some of these issues at Photokina, they will probably outperform many of their more resourceful peers.

[rob_x2004]

I dont get it. You all worked to get the porn ads and the buy a bride ads off the site, and now theyve gone you complain sales are down.

[Pebbble]

James

 

Thank you for your explanation. I suspect your right that sales are down due to a combination of the current credit crunch and people holding off purchases until after Photokina.

 

As a person on the outside looking in it just seems to me that Leica could do more to broaden its customer base- and yes the relationship with Panasonic helps achieve this. But I also think it could do more, particularly with the rangedinders which it has such a rich heritage in.

 

Thanks again though for the advice and not actually chucking those stones! :-)

 

Regards

Roh

[Guest flatfour]

I think they should try to introduce a cheaper version of the M8 rather as the cheaper M3 (M2). This would give them a platform. Production costs can be cut dramatically if they were prepared to move the factory to the far East. I wonder how much of the cost of the M8 is amortisation of its own R&D costs.

[earleygallery]

James

 

Thank you for your explanation. I suspect your right that sales are down due to a combination of the current credit crunch and people holding off purchases until after Photokina.

 

As a person on the outside looking in it just seems to me that Leica could do more to broaden its customer base- and yes the relationship with Panasonic helps achieve this. But I also think it could do more, particularly with the rangedinders which it has such a rich heritage in.

 

Thanks again though for the advice and not actually chucking those stones! :-)

 

Regards

Roh

 

Hi Roh,

 

I just re-read my last response and I didn't say what I did agree with from your suggestions!

 

The idea of the Apple Store type of model is something that Leica could do easily in partnership with some of the existing dealers. From what I understand Leica place quite demanding terms on their dealers in terms of the amount of stock they must buy, demo stock etc. which must be financially challenging especially with the slower moving items.

 

Perhaps they do need to find a way of getting more product in front of potential customers, and offer training/demonstrations - if it works for Apple it could work for Leica. I was very impressed when I visited an Apple store for the first time recently and it certainly contributed to my decision to want to buy into the brand.

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Hallo,

Look here: Interesting Leica gear

[razerx]

Last week we Leica users had a small celebration here in Hong Kong because new lenses finally arrived to our little city. The dealers had no stocks of 35mm Summilux ASPH for nearly two years and very limited supply for other demand lenses such as the 50mm asph, and 75mm Apo. The shops on the other hand were full of lenses people don't want - the Summarits. We have the money but you don't have the products. If this had anything to do with Mr. Lee's sacking then good for him.

[movito]

Kenneth

 

The R&D dept has grown by 1,000 in the last year.

 

According to Leica's Annual report for fiscal year 2007-2008 (pdf), the average number of employees in that period was 500 wage earners and 491 salaried employees. That's an increase of 52 people from the year before, and a total of 991 employees.