Let's have it out

[Guest BigSplash]

Advertisement (gone after registration)

Is that what all your companies do, Frank?

 

Reveal all your business plans to the general public?

 

There is a huge difference in revealing the business plan compared to communicating in a positive way the product differentiators that people can buy today and give hope that the product bought today will be alive and well tomorrow as a result of ongoing R&D and excellence of after sales service. Andy if you do not understand this or I am unclear I can explain further.

 

Let's look at Leica' recent history and where we are today:

R series discontinued

My dealer was not aware and nor were forum members until told at Solms meeting that R10 was not to be, and that there would be no SLR replacement (excl S2). Personally I do not see that as the way to build confidence and brand loyalty? I told my dealer the news!

 

Leica Boutiques

This has enraged dealers who have loyally stayed with Leica explaining to clients "why buy a M8 and not a Canon or Nikon?". Now they see themselves as in competition with the factory shop to get products in short supply (eg Noctilux) and beateb potentially on price also.

 

Leica M8, M8.2 ..rumoured M9

Leica has fuelled much speculation about when the M9 will come and what it will look like. Stefan I understand has said that most but not all technical issues for a FF M9 have been resolved....if the remaining issues can be fixed soon then they will launch M9 otherwise M8.3.

 

People ask should they buy a M8, M8.2 or await a M9, or M8.3......what an innovative way to launch a product while securing existing sales.

 

Some dealers suggest that M8 will be soon discontinued in favour of M8.2 /M8.3 and that is why the £500 cash back scheme was launched. Other dealers say that M8.2 will be discontinued in favour of M8.3 /M9 as the M8.2 is too similar to M8, and that M8 will remain the lower cost entry model.

 

My view is that Apple will introduce a new iPod and iPhone but when these will appear, and their spec. does not have the level of speculation that Leica seem to generate for M9 and indeed the new flagship S2.

 

S2 introduction

Dealers do not know the price, the spec.and understood an announcement was to be made in June in Paris that did not happen.....meanwhile LFI have run articles issue after issue describing how they designed the thing etc. I guess the aim is ti stimulate a market like they did successfully for the Noctilux and then could not make it, or as they did for the M8 and suffered th IR issue and software bugs.

 

After sales service

The service manager publicly says that 80% of all items are fixed in 5 days. Yet here we see demo new lenses checked by the service dept that do not work, wait times of months being the norm, guarantee work taking longer than fee paying repairs. Pros being given priority and they are still not happy as they typically lose their equipment for a season.....These are the comments in this forum Andy and I would suggest Leica have to fix their problems and communicate better.

 

Andy my point is that Leica is all over the place in the messages they give out. I am not suggesting that they publish their P&L (although in helicopter overview this is available for 2007, 2008 but is now a month late for 2009). I am NOT suggesting publishing a detailed roadmp either for the reasons given above.

[Advertisement]

The Leica Q3 is available for pre-order at B&H Photo Video and Adorama

[andybarton]

IMO, speculation about an M9 is fuelled by internet forums such as this one, not by Leica themselves.

 

Stefan Daniel was pretty clear about them not having solved the challenge of a FF digital M, only last month. Those that saw the serendipity of 09/09/09 (including me ) are probably making 5 out of two twos.

 

Even if they DO announce an M9 in September, my money would be against it being full frame.

 

There are good reasons why they dropped the R10, despite what they said at Photokina last year. It's a different world now.

 

And as for the S2, they have always stated it would be here mid 2009 (so, let's allow them a little slack...) and they said more recently that the price and spec would be announced at the end of July. Well, we're not there yet, either.

 

The M8 was released far too early (partly, I suspect, due to a clamouring from M users for a digital body, and partly because of the Epson) and had terrible consequences in terms of credibility and costs to the company. You can be sure that they will not allow the same thing to happen again with the S2. If they DO allow the same thing to happen with the S2, then, frankly, they deserve all that they get.

[delander †]

Leica's next generation digital M has to primarily address issue with the current sensor. If it does that it must be a M9. If it does not then maybe an M8.3 but who would buy it as we all be waiting for the M9.

 

Jeff

[delander †]

I suppose the real issue here is how far can Leica go down the road of incorporating new technology without losing its current niche in the market.

 

Jeff

[thrid]

I still think that Leica's miniscule sales figures are not related to a lack of 'up to date' features like EVF etc, but mostly due to the very high cost of the camera. Again, this is something that pretty much every dealer I have ever spoken to will confirm. New M8 bodies for $6000 sell at a trickle, but used bodies at almost half the cost sell very briskly.

 

As I mentioned before, I know about 6 people (including myself) who would purchase an M8.2, if it was more reasonably priced.

 

Leica is trapped in a catch 22 situation. They have to keep prices high, because they do not move a lot of units, but they can't increase sales figures dramatically, because they can't price their products more competitively. If you look at past examples this is a very dangerous situation for a company do be in. It can result in a vicious cycle, with an ever shrinking market share and shrinking R&D and marketing budget.

 

I still believe a tiered product line is key to solving this problem. If you look at Nikon/Canon their top of the line models are priced sky high (3Dx, 1DS-3). Essentially these cameras are cost-is-no-object technological showcases.

 

Due to their high cost the sales of these bodies are limited to the very wealthy, who can simply afford to buy one, or to those for whom the camera is essential to their work.

 

But the bulk of the revenue comes from the consumer / prosumer models and lenses.

 

All Leica has is a single high-end model that can only be purchased by a small segment of the market. They are losing the sales of the other 60-80% of potential customers in the market.

 

I would suggest:

 

M9 $4000-6000

But with sensor performance that justifies the price. Rugged, sealed pro body.

6K is a lot of money and I would like to see it lower, but I would not hold my breath.

 

CL-D $2500-3000

12MP APS-C with pixel binning, DX style lenses specifically for APS-C, M-mount, M lenses with multiplier (x1.5) Simplified mechanical RF unit, manual focus. Weather sealed. I don't care where this camera is made.

 

Leica X ($1600)

12MP APS-C sensor with pixel binning, equivalent of a fixed 2/35mm lens.

Simplified mechanical RF unit. Could even be AF, but would have to have a very good manual focus mode, with proper markings on the lens for scale focusing. Limited weather sealing. I don't care where this camera is made.

[thrid]

The M8 was released far too early (partly, I suspect, due to a clamouring from M users for a digital body, and partly because of the Epson) and had terrible consequences in terms of credibility and costs to the company. You can be sure that they will not allow the same thing to happen again with the S2. If they DO allow the same thing to happen with the S2, then, frankly, they deserve all that they get.

 

From what I understand the M8 was shoved out the door prematurely, because if they had delayed it any longer they would have no longer owned a door to shove it out of.

[jaapv]

Advertisement (gone after registration)

6000$ is not so much in Euros right now, and Leica does live in the Euro-zone. It is interesting to note that it seems that sales are down in the USA, but not in Europe or Asia, despite the recession.

Anyway, a more reasonable lineup would seem to be

 

An M9 at, or slightly above, the current M8.2 prices

An M8.2 (M8.3??) about 1250 Euro below that

Panaleicas

 

And weathersealing? Not so simple with the current design, but one can hope...

[Guest stnami]

Trouble is that many of the high end buyers also want the camera because it is exclusive to only a small segment of the population. It has snob value attached to it..........it's a Leica that's where it's value is as a item is, not a run of the mill camera meant for the everyday punter .

[Guest BigSplash]

I suppose the real issue here is how far can Leica go down the road of incorporating new technology without losing its current niche in the market.

 

Jeff

 

I agree with you, and it is more tricky because they need to keep the momentum going for M sales that is why they need to really improve the messages they give to the market.

 

In my view surely Leica would do well to publicly announce that they :

> Will support the M8 as long as there is demand (as per M7 announcement) and this will remain the entry level model with optical rangefinder.

> ditto for M8.2 which will have the quieter shutter and glass monitor cover for those that need it

> There will be a M8.3 / M9 as Leica are committed to being the leader in the M rangefinder segment. The specification and release date will be announced shortly after Leica have fully tested and qualified production units, and shipment is ready to start.

 

> They should develop a "Low price M camera body" that uses M lenses yet is digital.....like the Leica /Minolta CL. This could capitalise on EVF technology and be built by Panasonic. Ideally it could be used with bellows and telephoto because of the EVF. This should only be announced when ready to switch on the shipping of production volumes and after thorough testing of production units.

 

The above strategy would yield a range of bodies that really places Leica in a strong position in the niche with a substantial portfolio of lenses available. It would also maintain momentum of sales on existing products by confirming continued commitment to M8 etc.

 

It would provide a vehicle for new users to enter with lower priced Summarit or second hand M lenses and a low cost body......subsequently hopefully these users would be moving upwards.

 

It would kill speculation about M9 etc and give the company breathing space to fully test the M9 Full Frame

 

Under the table I would if I were Leica be developing a next generation

In my view this would be a "M ideally or S Junior" camera that utilised the S2 lens technology including auto focus, and AE...(with an EVF technology most likely) that was acceptable to professionals ...if that is today realisable and Stefan suggests that it is.

 

The dream of course would be that such a next generation M camera could accept the full range of existing M lenses, and new ones with both AE and AF, plus whatever else today's latest lenses require in terms of connections to the camera body. If an adapter is reuired to use the old M lenses that is not an issue.

 

A strategy similar to the above would maintain momentum of the brand and near term sales. It would also position Leica to secure their niche (rangefinders) and move them back into Macro and telphoto eating away at today's SLR arena.

 

That's my 10c worth anyway.

[Guest BigSplash]

I still think that Leica's miniscule sales figures are not related to a lack of 'up to date' features like EVF etc, but mostly due to the very high cost of the camera. Again, this is something that pretty much every dealer I have ever spoken to will confirm. New M8 bodies for $6000 sell at a trickle, but used bodies at almost half the cost sell very briskly.

 

As I mentioned before, I know about 6 people (including myself) who would purchase an M8.2, if it was more reasonably priced.

 

Leica is trapped in a catch 22 situation. They have to keep prices high, because they do not move a lot of units, but they can't increase sales figures dramatically, because they can't price their products more competitively. If you look at past examples this is a very dangerous situation for a company do be in. It can result in a vicious cycle, with an ever shrinking market share and shrinking R&D and marketing budget.

 

I still believe a tiered product line is key to solving this problem. If you look at Nikon/Canon their top of the line models are priced sky high (3Dx, 1DS-3). Essentially these cameras are cost-is-no-object technological showcases.

 

Due to their high cost the sales of these bodies are limited to the very wealthy, who can simply afford to buy one, or to those for whom the camera is essential to their work.

 

But the bulk of the revenue comes from the consumer / prosumer models and lenses.

 

All Leica has is a single high-end model that can only be purchased by a small segment of the market. They are losing the sales of the other 60-80% of potential customers in the market.

 

I would suggest:

 

M9 $4000-6000

But with sensor performance that justifies the price. Rugged, sealed pro body.

6K is a lot of money and I would like to see it lower, but I would not hold my breath.

 

CL-D $2500-3000

12MP APS-C with pixel binning, DX style lenses specifically for APS-C, M-mount, M lenses with multiplier (x1.5) Simplified mechanical RF unit, manual focus. Weather sealed. I don't care where this camera is made.

 

Leica X ($1600)

12MP APS-C sensor with pixel binning, equivalent of a fixed 2/35mm lens.

Simplified mechanical RF unit. Could even be AF, but would have to have a very good manual focus mode, with proper markings on the lens for scale focusing. Limited weather sealing. I don't care where this camera is made.

I Totally agree.... Leica must do this

....maybe to get there you position M8 and M8.2 in the above scheme of things.

[andybarton]

The M8 is done with. They won't be making any more, hence the £500 rebate to try to shift the last stock.

[jaapv]

I still think that Leica's miniscule sales figures are not related to a lack of 'up to date' features like EVF etc, but mostly due to the very high cost of the camera. Again, this is something that pretty much every dealer I have ever spoken to will confirm. New M8 bodies for $6000 sell at a trickle, but used bodies at almost half the cost sell very briskly.

This kind of remark always sets me wondering: How is it possible to sell more used bodies than new ones, unless there is an industry building new used bodies?

 

As I mentioned before, I know about 6 people (including myself) who would purchase an M8.2, if it was more reasonably priced.

Now that is the case with diamond necklaces amongst my female aquaintances as well...

 

Leica is trapped in a catch 22 situation. They have to keep prices high, because they do not move a lot of units, but they can't increase sales figures dramatically, because they can't price their products more competitively. If you look at past examples this is a very dangerous situation for a company do be in. It can result in a vicious cycle, with an ever shrinking market share and shrinking R&D and marketing budget.

Forgetting one thing: in general Leica cannot expand their production in the current setup. They have been producing an average of about 15000 M cameras a year for the last half-century, and a demand of 20.000 as they had in 2007 with the M8 clearly overstressed the production facility. So even if one could generate demand, there is no way to satisfy it.

I still believe a tiered product line is key to solving this problem. If you look at Nikon/Canon their top of the line models are priced sky high (3Dx, 1DS-3). Essentially these cameras are cost-is-no-object technological showcases.

That is undoubtedly true

 

Due to their high cost the sales of these bodies are limited to the very wealthy, who can simply afford to buy one, or to those for whom the camera is essential to their work.

I do not consider myself excessively wealthy, nor are most of the Leica owners I know. Upper-middle class is nearer the mark. It is just how one spends one's money..

[stevelap]

Aimed at no one in particular, there is much misinformation and conjecture being bandied about in this thread.

 

Regarding the S2, Leica sources (at Photokina, PMA and in LFI and other interviews) have consistently said by end of September for the launch (body plus first optics, other lenses following in "late fall") with pricing expected by the end of July or early August.

If they miss those targets then people will be entitled to carp, although I would be inclined to give them the benefit of the doubt for a month or so given recent economic circumstances. But, we are not there yet so why not wait until we are?

 

As for a full-frame M9, well as far as I can see the most recent information from Leica sources came out of the recent Hessenpark meeting, along the lines of 'we are not there yet' and 'some technical difficulties remain'. Anything else is nothing more than rumour and speculation at the moment.

 

So, R10 excepted (and that was a grievous blow to many, I know), no promises have been broken or targets missed, yet. Only two months to go and all might be revealed......

[jaapv]

With the additional information that those difficulties were specifically in the IR filtering.

[Guest BigSplash]

Forgetting one thing: in general Leica cannot expand their production in the current setup. They have been producing an average of about 15000 M cameras a year for the last half-century, and a demand of 20.000 as they had in 2007 with the M8 clearly overstressed the production facility. So even if one could generate demand, there is no way to satisfy it.

..

 

Jaapv in my experience successful businesses are either facing heavy demand or are in severe decline...they do NOT just bumble along at 15000 per year, with one year being a little special.

 

I would have thought that Leica should be looking at how to drive volumes through the roof and figure out how to meet the demand without adding huge capital investment before they are sure that the demand is sustainable over the long term.

 

In this thread several people have mentioned entry level price as being a barrier to eroding the share of Canon, and Nikon. Separately Andy says that the M8 is dead and they introduced the £500 scheme to get rid of excess stock....this was news to me.

 

If true it means that the M8.2 is the entry level model at £4000 for a camera body and £849 for a 50mm f2,5 Summarit lens.........I would have thought that will ensure that Leica has no production difficulties and will in fact have over capacity at 15000 units per year. ..they will not take volumes from Canon & Nikon.

 

I would have thought they should be looking at how to make 30000 units per year and achieve very significant cost savings as a result.....That could drive down the price of the entry level model whatever that is., and drive even more volumes.

 

They may even want to subcontract parts of the production elsewhere although I can see big benefits at staying in Solms.....but they should use proper volume production methods and not handcraft each camera, with a highly skilled techician as you have suggested in the past.

[andybarton]

 

I would have thought that Leica should be looking at how to drive volumes through the roof and figure out how to meet the demand without adding huge capital investment before they are sure that the demand is sustainable over the long term.

 

Have you been to the factory, Frank? Jaap and I (and thousands of others) have. We have seen how Leicas are made.

 

Driving volume through the roof is not possible with the current set up. There aren't enough skilled workers to do the work to double volume. How would you propose that they do this, without adding huge capital investment? Ask untrained workers to make lenses at home?

 

Of course, Leica could send their lens manufacturing "off-shore". They could ask a factory in Indonesia, or China, for example, to make their Summiluxes for them. Somehow, I'm not sure if that's such a good idea (with all respect to Indonesian and Chinese workers).

 

I can just imagine the threads on here, when the first Summilux turns up with "Made in xxxxx" on the box.

 

Driving up volume of camera sales via a cheap and cheerful Far East cameras could well be an option, as it was in the 1970s, but that's not the same as doubling volume of M8s or lenses in Germany.

[Guest BigSplash]

Have you been to the factory, Frank? Jaap and I (and thousands of others) have. We have seen how Leicas are made.

 

Driving volume through the roof is not possible with the current set up. There aren't enough skilled workers to do the work to double volume. How would you propose that they do this, without adding huge capital investment? Ask untrained workers to make lenses at home?

 

Of course, Leica could send their lens manufacturing "off-shore". They could ask a factory in Indonesia, or China, for example, to make their Summiluxes for them. Somehow, I'm not sure if that's such a good idea (with all respect to Indonesian and Chinese workers).

 

I can just imagine the threads on here, when the first Summilux turns up with "Made in xxxxx" on the box.

 

Driving up volume of camera sales via a cheap and cheerful Far East cameras could well be an option, as it was in the 1970s, but that's not the same as doubling volume of M8s or lenses in Germany.

 

I have not been to Solms but did go to Wetzlar some years back. I believe you when you say that craftsmen build these things and they are not geared for mass assembly ...it seems to me that is a core critical issue that Leica do have to resolve

 

I have been to many other factories however and have been responsible for low, medium to high volume production facilities. The manufacturing sites have been high tech factories in Europe, Asia and USA so I can indeed relate to the issues.

Let me give some examples of other facilities that i have visited:

> Rolex achieve mass volume assembly rather well in Switzerland, without massive capital costs or only employing craftsmen and women.

> Patek Philippe do use an approach to "match every piece part" during assembly. They are forced to employ specialists.

> Lexus design their cars such that pieces fit perfectly and are easy to assemble...

> Jaguar use shims in their engine to negate differences due to tolerances of their piece parts.

> Porsche used to hand build the cars without a real production line. Today at Zuffenhausen they have a production line and they have trained people working as teams ..its an interesting mix of skills within the teams so that ownership, pride in the build and the opportunity to gain experience happens naturally, while job interest in a production environment is maintained. I would have thought Leica could learn a lot from Porsche and apparently they use the same consultants for just in time delivery.

 

Jaapv I could go on but the point is Leica it would appear need to address their production issue to achieve at least the following:

> Much lower costs through higher volume production

> Minimum Capital spend to achieve higher volumes

> Lower headcount of craftsman, and more trained factory people

> Design for manufacture (especially since many parts are made off site in Portugal for M8)

> Less fitting, fine tuning and "difficult soldering of parts*" during production (* You have mentioned this issue after your factory tour)

> Higher Quality that is built into the production process by design....too many lenses etc seem to be shipped as less than perfect.

> Flexibility to increase production to say 30,000 camera bodies and ability to also meet their cost targets for a 10,000 unit build per year. ...Today you say they continue at 15,000 since decades and bust a gut to make 30,000 one year...I would suggest that this is a dangerous strategy to continue with.

[jaapv]

I have not been to Solms but did go to Wetzlar some years back.

 

We'll have to start calling you Methusalah then.... Does your military experience include marching to Moscow with Napoleon?

[Advertisement]

Hallo,

Look here: Leica M

[offshore]

They may even want to subcontract parts of the production elsewhere although I can see big benefits at staying in Solms.....but they should use proper volume production methods and not handcraft each camera, with a highly skilled techician as you have suggested in the past.

I've got to disagree with you regarding this frank it is one of the reasons Leica people and new buyers purchase a Leica. The attention to detail by a skilled human being what makes a Leica what it is. If you don't think Canon, Nikon and the other Japanese high volume, injection molded, robot assembled cameras and lenses don't have their problems you are deluding yourself. If Leica ever went to a mass manufacture and assembly process I would personally move on to another brand and probably other Leica users would as well because there would no longer be a differentiation that makes the brand what it is. When I worked for Southern California Edison we saw an endless line of guys like you who thought they knew the end all to everyone's perceived problems and after trying their whizz bang new methods for a while we went back to the tried and true methods we used in the past that worked and made us who we were. If you honestly think you can single handedly "save" Leica instead of spending all the time you do here why don't you put together your plan, make an appointment with Leica and present your ideas to them after all isn't that what you say you do? If your successful then come back and tell us about it but please do us a favor and try to keep it at 25 words or less.

[Guest BigSplash]

I've got to disagree with you regarding this frank it is one of the reasons Leica people and new buyers purchase a Leica. The attention to detail by a skilled human being what makes a Leica what it is. If you don't think Canon, Nikon and the other Japanese high volume, injection molded, robot assembled cameras and lenses don't have their problems you are deluding yourself. If Leica ever went to a mass manufacture and assembly process I would personally move on to another brand and probably other Leica users would as well because there would no longer be a differentiation that makes the brand what it is. When I worked for Southern California Edison we saw an endless line of guys like you who thought they knew the end all to everyone's perceived problems and after trying their whizz bang new methods for a while we went back to the tried and true methods we used in the past that worked and made us who we were. If you honestly think you can single handedly "save" Leica instead of spending all the time you do here why don't you put together your plan, make an appointment with Leica and present your ideas to them after all isn't that what you say you do? If your successful then come back and tell us about it but please do us a favor and try to keep it at 25 words or less.

 

Thanks for the encouragement. I may even do as you say when I have finished my current commitments. Not sure they are ready for outside help however.