S2 under pricing pressure

[Gentleman Villain]

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My feeling is that sales of the S2 will struggle (certainly in the short term) not because of the price relative to other MF systems but simply because of the dire economic circumstances that the camera is being launched into.

 

you are 1000% correct. Worst time ever to release such a wonderful camera.....But, if Leica can just hold out for the next few years then there is a lot of promise for the S2...

[lxlim]

I do think it is a good time to launch the S2 for the following reasons.

 

1. Their reputation in servicing the professional is non-existent. Building it up will take time.

 

2. Any S2 with the littlest bit of issue is going echo around the internet for years.

 

3. The S2 customer may or may not be the same profile as those using MFBs, so they may have to start from a clean slate. The economic crisis will change the professional photographer's business models.

 

4. The S2, I think might be rather unique in that it may not need much professional customers in the first year of launch. The Leica name seems to carry a great deal of weight. Consumers first, pros later.

 

5. The economy may have tanked, its because the normal flow of business transactions have slowed but it hasn't stopped. There are many individuals who are still cash rich. Pros and amateurs.

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[Gentleman Villain]

The economic crisis will change the professional photographer's business models.

 

 

Exactly! You are definitely on the right track.

 

The entire business model of a professional photographer is going to change in the next few years...after these changes take place....Leica is in a perfect position for the new culture that should emerge...that's why I think it will take a few years for the S2 to take off

 

The past few decades have been all about immediate gratification, McMansions, megapixel wars, who can keep up with the Jones's?

 

But I think there is a cultural shift happening. I think that people are going to be willing to wait and save to buy quality gear. I think things are going to slow down....get better...I think we're entering an era where people are going to start demanding quality and taking the time to do things right. The coming era should fit better into the Leica mindset than the previous era...but there are a lot of things that still must happen until this cultural shift takes place. It's still a few years away.

[barjohn]

I think some of you are dreaming. First, it is highly unlikely that Leica will survive if the S2 sales are abysmal. M8/8.2 sales have to be in the tank. Demand is way down and stores are not stocking inventory. I live in one of the richest markets in the country (Greater Los Angeles Area). The Orange county dealers (Sammy's, Cal's, etc.) (a place with more millionaires per capita than many places on the planet) aren't even stocking the camera or lenses. Those not familiar with the area may have heard of Newport Beach, Corona Del Mar, Laguna Beach, Irvine, Cota De Casa, etc.

 

Second, cultures do not change overnight. Once people perceive that things are getting better and they are no longer worried about losing their jobs they will start back looking for immediate gratification. I heard the same dribble during the recession in the early 1990s. Then the dot com boom came along and all bets were off. Same thing after the dot com bust followed by the housing boom. People adapt quickly and change slowly.

 

In any case Leica cannot sit around supporting 1,000+ employees for years with revenue that is trickling in waiting for the magic ah-ha moment to arrive.

[RobMac]

+1

[R10dreamer]

Exactly! You are definitely on the right track.

 

The entire business model of a professional photographer is going to change in the next few years...after these changes take place....Leica is in a perfect position for the new culture that should emerge...that's why I think it will take a few years for the S2 to take off

 

The past few decades have been all about immediate gratification, McMansions, megapixel wars, who can keep up with the Jones's?

 

But I think there is a cultural shift happening. I think that people are going to be willing to wait and save to buy quality gear. I think things are going to slow down....get better...I think we're entering an era where people are going to start demanding quality and taking the time to do things right. The coming era should fit better into the Leica mindset than the previous era...but there are a lot of things that still must happen until this cultural shift takes place. It's still a few years away.

 

It will take more than a recession to change a culture imbedded in this country for 25 years. Leica's "patience" in pricing the S2, after a year of implementation, is a key sign to me that they are very worried about the initial release. Price it too low and they risk production problems. Price it too high and they risk being able to move the camera. They have to be realistic and realize that they are not releasing just a new camera. They are releasing a new SYSTEM. That is a much bigger obstacle. If they are to achieve any kind of profitable return it will require customers being willing to invest a lot of money and patience waiting on more lenses and auxiliary items. We would not be buying a body with existing lenses. We are required to buy a body and a lot of lenses. That is a big deal.

Edited July 22, 2009 by R10dreamer

[Gentleman Villain]

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This isn't a recession...it's a global economic collapse. People are not going to be the same when it's over

[barjohn]

If its happening to you its a global economic collapse, if its happening to someone else you know its a recession and if it is happening to someone else you don't know its a blip in the economic data. Only the first category experience any real change and it is often still temporary.

 

Change only happens because a) we conscientiously decide to make a change or we perceive a need to change and the perception remains constant.

[jaapv]

I think some of you are dreaming. First, it is highly unlikely that Leica will survive if the S2 sales are abysmal. M8/8.2 sales have to be in the tank. Demand is way down and stores are not stocking inventory. I live in one of the richest markets in the country (Greater Los Angeles Area). The Orange county dealers (Sammy's, Cal's, etc.) (a place with more millionaires per capita than many places on the planet) aren't even stocking the camera or lenses. Those not familiar with the area may have heard of Newport Beach, Corona Del Mar, Laguna Beach, Irvine, Cota De Casa, etc.

 

 

I doubt that the affluence of the area is of much influence. My dealer is located in the middle of a working class area (Rotterdam and suburbs) and stocks virtually all Leica gear. As a matter of fact they stock most high-end camera gear of all major brands. And it is moving they tell me. It is a mistake to extrapolate from one's own direct surroundings.

[jaapv]

My feeling is that sales of the S2 will struggle (certainly in the short term) not because of the price relative to other MF systems but simply because of the dire economic circumstances that the camera is being launched .

Maybe. But the Leicas from the late 1920-ies/1930-ies did spectacularly well despite the recession, and the 1950-ies when the M3 was introduced were not a time of untold riches either, in fact I believe there was still some food rationing in the UK.

[georg]

Leica still operates in a very small niche, even when the overall market collapses, they still can gain their market share, let's say from 1% to 2% and increase their production.

Nikon manufactured more D3-bodies in one month (up to 600 per day)!

Leica said they want to sell 10000 S2-bodies at all but they don't see it as a short-sighted profit-maker but a long-term investment into a new system/market and R&D-KnowHow.

 

If it's good camera which delivers what is promised, it will find it's way.

[wattsy]

when the M3 was introduced were not a time of untold riches either, in fact I believe there was still some food rationing in the UK.

 

Going off-topic but food (and clothing, petrol, etc.) rationing had nothing to do with a lack of money to spend. (Incidentally, the M3 was introduced a good 5 years after rationing ended in the UK.)

[jaapv]

Afaik the M3 was introduced during 1953, production started in 1954:

 

From Wikipedia:

 

Rationing continued after the end of the war. In fact, it became stricter after the war ended than during the hostilities. Bread, which was not rationed during the war, was rationed from 1946 to 1948; and potato rationing began in 1947. This was largely due to the necessity of feeding the population of European areas coming under British control, whose economies had been devastated by the fighting. Sweet rationing ended in February 1953, and sugar rationing ended in the September. The end of all food rationing did not come until 4 July 1954, with meat and bacon the last to go. Some of the ersatz foods like apple crumble and carrot cake continue to be popular today. Petrol rationing ended on 26 July 1950[3] but was briefly reintroduced in late 1956 during the Suez Crisis, ending on 14 May 1957[4] and all advertising of petrol on the recently-introduced ITV was banned for a period

 

We used to live in Stoke's farm, Little Haseley up to 1954 and I clearly remember my grandmother coming from Holland, bearing eagerly awaited boxes of chocolate, and my mother making her own Christmas tree decorations from Players cigarette foil and cellophane, as there were none available. Another sensation was Tolkien coming to visit us, which is etched in my mind, as he gave us a jar of honey.

(Sorry for the OT )

Edited July 23, 2009 by jaapv

[wattsy]

Afaik the M3 was introduced during 1953, production started in 1954:

 

Fair enough. For some reason I thought the M3 was introduced at the end of the Fifties.

[jlancasterd]

Fair enough. For some reason I thought the M3 was introduced at the end of the Fifties.

 

As far as amateur photographers in UK were concerned it could just as well have been introduced in the late 1950s as expensive cameras like the M3 were regarded as luxury items and subject to import control through most of the 1950s. IIRC Leicas, Contaxes, Rolleiflexes and similar high quality cameras were only available to bona fide professional photographers by special permit until about 1958. Even when import controls were relaxed Sales Taxes were higher on 'luxury' cameras.

[marknorton]

Leica have said pricing will be announced by the end of July. Just a few days to go...

[mgcd]

Hmmm... And to think that the S2 is not even out yet

[luigi bertolotti]

Hmmm... And to think that the S2 is not even out yet

 

Well, if your remark refers to Mark's post, nothing strange that a Company firstly publishes the price list, then starts to deliver, or am I wrong ?

[mhoersch]

What about a company that does neither?

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[luigi bertolotti]

What about a company that does neither?

THIS could be a problem... ... ANNOUNCE, SHOW and then... do nothing more. I hope won't be so for S2... given my bias towards the Company, I'd concede they can afford/risk even a delay of a pair of months... let's say... deliver Nov/Dec 09... "difficult economic moment" - "final quality assurance" - "service dep. training/organization"... even the perennial "final software debugging":rolleyes:; but if they won't deliver... a bad smash on their reputation... sometimes, I think the worst scenario could be that they would declare that the "project" will be passed to, and finalized, by Pansonic or something else...

Edited July 27, 2009 by luigi bertolotti