S2 available in October / starting price of £15,996

[R10dreamer]

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Yes David, thank-you. Your input seems to be as impartial as your situation allows and that speaks volumns about your personal integrity.

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

[AlanG]

"this is a very accurate analysis. the <40mpx offerings will become obsolete when canon and -a bit later- nikon bring their new flagships"

 

Rent a P40+ /the cheapest and smallest current MF-solution with modern sensor-architecture) with only 40MP and some Digitar/HR-lenses and take some actual pictures in the real world so this discussion would come to an abrupt end, finally...

 

Forget about the megapixels, digicIX-processors, interpolation algorithms, nano-coated-lenses - JUST TRY IT!

 

The Digitar lenses are for wide angle cameras and view cameras where one will generally be working on a tripod shooting static objects. This will give plenty of time to accurately focus the camera. And there will be minimal camera or subject movement to reduce resolution.

 

But try using any high resolution camera hand held while shooting a slightly active subject and it becomes much more difficult to get the focus exact and get the most out of the camera. It remains to be seen how well the S2 will do in such applications even with very skilled photographers. A tripod, flash, or at least a pretty high shutter speed will be required simply to avoid the effect of camera shake on the 37 megapixels of potential resolution.

 

I have no doubt that the S2 and MF cameras can produce very detailed files. It is just a question of how locked down you'll have to be to get them to surpass the quality from a high res 35mm DSLR.

[mgcd]

David - Thank you for your post, it clears up a lot of latent questions for me, I am eagerly awaiting the full specs.

[wilfredo]

I probably shouldn't even bother offering an opinion here because I am not in the income bracket to even remotely consider this system. It seems this will be a system for the high end professional. I'll be watching from a distance. At least Canons are still within my reach.

 

And yes, I'll be holding onto my M8, that's my consolation. An R10 DSLR would have been nice.

 

Good Luck Leica.

[pascal_meheut]

What I learn from it is that apparently there are people around who are willing to trade in their Hasselblads and preorder a 30 K camera system the specs of which have not even been published. No one has ever seen a Raw file from the S2, no one has ever seen anything but a prototype of body or lenses - and yet there seem to be people who order the camera bona fide.

 

Many reasons for that. I can think of some:

 

- this is not their only system, they do not use it as much as they should and they sell ASAP before the price lowers. If the S2 is not up to their expectations, they'll buy something else they are less attracted too but that will do the job. Someone on luminous-landscape was saying he had to change its PhaseOne back because the extended warranty was about to expire for instance. I guess this is the kind of guy who will sell it and can rent or use something else for 3 months whilst waiting to see what the S2 can do.

 

- When it comes to image quality, the S2 uses a Kodak sensor, the same as many backs, will have Leica lenses and allow the use of common RAW conversion software, Lightroom for sure, probably Aperture, maybe C1... The risk when it comes to image quality is quite low.

 

- Whatever their other faults were, Leica has launched 2 previous digital cameras, the M8 and the DMR whose IQ was excellent. One can then expect the S2 to do the same.

 

- Some people may have been waiting for years for something like the S2, MF quality but smaller and easier to use in the field. They are ready to take a risk because it will increase their productivity.

 

BTW, I placed a pre-order for the M8 and had one of the first ones delivered, in fact the first one reported here.

Owning a DMR at the time, I was quite confident. Of course I did not expect the banding and IR problem but I do not regret my decision.

It is because I want to be the first to own something new? In fact, quite the contrary. I usually wait for things to be stable and well-known (I work in software, I've learned the hard way).

 

But because I wanted a compact digital rangefinder which is the best tool for my kind of images.

And even if the first months with the M8 have been bumpy (return to factory for banding, search for IR filters...), I have been able to shoot good pictures with a camera I prefer to any DSLR, whatever its flaws are.

[Guest malland]

What's this idea that Leica only want to sell 1000 S2s per year?

That's been my point earlier in this interminable thread, that diverting resources to a camera that is expected to sell only 1,000 units per year — if indeed the goal is really this low — does not make any sense financially.

 

—Mitch/Potomac, MD

Scratching the Surface©

[jaapv]

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That's been my point earlier in this interminable thread, that diverting resources to a camera that is expected to sell only 1,000 units per year — if indeed the goal is really this low — does not make any sense financially.

 

—Mitch/Potomac, MD

Scratching the Surface©

I guess that is the reason Dr.Kaufmann became the pauper he is - doing things that make no sense financially....

[wlaidlaw]

I guess that is the reason Dr.Kaufmann became the pauper he is - doing things that make no sense financially....

 

If they can sell 1,000 per annum the figures could add up.

 

I am going to make a number of assumptions:

 

1) The raw material costs of an S2 including sensor and Maestro processor are not more than €3,000

2) Leica currently employs around 240 people of which let us say 40% are partially or wholly involved with the S2

3) The average cost per person is €100,000 including pension and social costs.

4) Leica will sell the camera to dealers at €15,000.

 

The inwards cash flow is therefore €15,000,000. The outwards cash flow is €12,600,000. Now there are other costs - bank finance, rent, local property taxes etc, which I cannot quantify but if the above figures are anywhere near correct, the whole exercise is not as lunatic as some have said.

 

Wilson

[Guest malland]

Wilson, that's precisely the point if the target is really only 1,000 units per year -- even under somewhat more optimistic cost assumptions than yours or assuming substantially higher sales than 1,000 units per year it's difficult to see that devoting the company's scarce management and R&D resources to this project was a good decision. I have really no interest in the S2, but am only concerned what this does to the future of the company and the M-line of digital cameras — and it's not looking very good.

 

Jaap, I have no idea how Andreas Kaufmann made his money — for all I know he inherited it. In either case your comment is not a good guide to what may be happening. What is more relevant is Leica's financial performance in the last — take your choice — 10-40 tears, or take the last 2-3 years and the financial performance with the M8.

 

—Mitch/Potomac, MD

Bangkok Hysteria©: Book Project

[bill]

That's been my point earlier in this interminable thread, that diverting resources to a camera that is expected to sell only 1,000 units per year — if indeed the goal is really this low — does not make any sense financially.

 

Mitch, in what you are saying you are not taking into account the spin-off/trickle-down of R&D etc from the S2 into other Leica ranges. Invest once, reap the benefits many times...

 

Regards,

 

Bill

[Guest malland]

Bill, you're right, of course there is some spinoff. But looking at the possible market for the S2, which does look very small, I can only come to the conclusion that the company would have been better off to to marshall it's R&D resources directly into the digital M-line to create a larger cash flow in the next few years.

 

Some will say that they should have developed an R10 instead, but the decision to leave that market looks like the right one, in the light of the competition from much more digitally experienced they are facing there.

 

But to become more profitable Leica needs ultimately to reduce it's cost so that, in turn, it could reduce, or keep from substantially increasing prices — and that means producing cameras in a low-wage country. The question is whether this small, tiny really, company has the management experience to produce cameras in a country like China or Thailand. Unfortunately many, if not most, current Leica users seem to see production in Germany as a "holy cow". But consider that Nikon was producing, before the crash of last fall, 30,000 units PER MONTH of the D300 in their plant in Thailand — and the D300 has not had quality problems.

 

—Mitch/Potomac, MD

Wild Beasts of Botswana - a set on Flickr

[wlaidlaw]

I presume someone has had the wit to put all the figures into an Excel spreadsheet and solve it for maximum profit. When I get back from a meeting later today I will put my simplistic figures into a spreadsheet but the unknown is how many extra you would sell if you dropped the wholesale price by say €5,000. My guess is that you might sell 3 or 4 times as many. Perhaps someone on the forum who is in the retail business can give me a better feel for that. The lens prices look reasonable. My personal feeling is that Leica would have done better to drop their margin on the S2 body, sell more and therefore more lenses.

 

Wilson

[andybarton]

But to become more profitable Leica needs ultimately to reduce it's cost so that, in turn, it could reduce, or keep from substantially increasing prices — and that means producing cameras in a low-wage country. The question is whether this small, tiny really, company has the management experience to produce cameras in a country like China or Thailand.

 

I would guess that most of the people on this forum appreciate that Leicas are made in Portugal and Germany, not is some low wage economy in the Far East.

 

Leica would not be Leica if they moved their production "off shore". It's very much a part of what makes them, and their products, unique. Anyone who has been to the factory in Solms will tell you why Leica as a company, and its products, are special.

 

If they were to go and take some space next to Nikon in Thailand, sure they could make decent cameras. Nikon make decent cameras. But they wouldn't be the same.

 

As for their lenses, which are at least half of what is important, IMHO, then I think that you'd have to move half the workforce from Solms out to the Far East in order to maintain production. As you will appreciate, it's hard enough making quality lenses 100% of the time (which Leica can't achieve) without employing a lot of low paid, lower skill labour to do it. And their lenses don't look (or feel) like they offer much in the way of autmoation opportunities.

[bill]

Bill, you're right, of course there is some spinoff. But looking at the possible market for the S2, which does look very small, I can only come to the conclusion that the company would have been better off to to marshall it's R&D resources directly into the digital M-line to create a larger cash flow in the next few years.

 

...but why not have your cake and eat it? If the money had been invested directly into the digital M line then the S2 and it's potential both as a product line in it's own right and as a platform for trickle-down would not exist.

 

Some will say that they should have developed an R10 instead, but the decision to leave that market looks like the right one, in the light of the competition from much more digitally experienced they are facing there.

 

On this, we agree, and I write as the owner of an R7 and a brace of lenses. Leica would have crucified themselves if they had tried to do a "me too". They had no alternative but to leapfrog the competition, which I believe they have done with the S2 concept.

 

But to become more profitable Leica needs ultimately to reduce it's cost so that, in turn, it could reduce, or keep from substantially increasing prices — and that means producing cameras in a low-wage country. The question is whether this small, tiny really, company has the management experience to produce cameras in a country like China or Thailand. Unfortunately many, if not most, current Leica users seem to see production in Germany as a "holy cow". But consider that Nikon was producing, before the crash of last fall, 30,000 units PER MONTH of the D300 in their plant in Thailand — and the D300 has not had quality problems.

 

Interesting point, but a little one-sided. There are many examples of profitable companies that have eschewed the "pile it high, sell it cheap" approach of mass manufacturing. For my part, I don't care whether production is in Solms, Wetzlar, Midland, Portugal or Timbuktu - I am always amused when the old chestnut comes up of whether Canadian lenses were as good as German ones - but as Scotty used to say, "ye cannae fight the laws of physics". Production costs lower than sale price... result, happiness, production costs higher than sale price... result, misery. The margin made is what can provide funds for future R&D, and the improvements in quality and customer service that we have all been seeking.

 

The "made in Germany" tag, is, however, a USP for Leica; whether the likes of you and I appreciate it or not, to others it DOES matter. Leica are dependent upon a highly skilled manual workforce to produce their products - they are simply not in the mass market (with the exception of the Leica-branded Panasonic products that are, to all intents and purposes, a separate venture) and any attempt to move there now would, IMO, be disasterous.

 

Regards,

 

Bill

[andybarton]

As an aside, does anyone know how much Project Afrika has cost in terms of R&D?

[dfarkas]

As an aside, does anyone know how much Project Afrika has cost in terms of R&D?

 

I believe somewhere between 20 and 30 million Euro over the last 3 years.

 

First I heard of it was from Maike Harberts at Photokina 2006. When I asked her if the R10 would have a FF sensor, she replied, "...or larger." This was also the show that Leica tried to buy a 51% stake in Sinar. I'd say they had a pretty good idea of what was to come with regards to entering the MFD market.

 

Then, they added abot 100 employees over the last 18 months.

 

A lot has gone into the S2.

 

David

[wlaidlaw]

Assuming David's figure is correct and giving the S2 a 5 year life (optimistic), that would mean that just to amortize the development costs of say €25M, would mean €5,000 per camera. Now wonder it is expensive.

 

Wilson

[miami91]

I can only come to the conclusion that the company would have been better off to to marshall it's R&D resources directly into the digital M-line to create a larger cash flow in the next few years.

 

Perhaps they did this simultaneous to development of the S2. If the rumours of the M9 being announced on 09/09/09 prove true, and assuming it shares components of the S2 (scaled down sensor, Maestro chip, OLED display, etc.), then it would be hard to escape the conclusion that S2 R&D dollars directly benefited the M line, and in a timeframe far more aggressive than anyone would have imagined possible.

 

Jeff.

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[bill]

Perhaps they did this simultaneous to development of the S2. If the rumours of the M9 being announced on 09/09/09 prove true, and assuming it shares components of the S2 (scaled down sensor, Maestro chip, OLED display, etc.), then it would be hard to escape the conclusion that S2 R&D dollars directly benefited the M line, and in a timeframe far more aggressive than anyone would have imagined possible.

 

Jeff.

 

Jeff, that's what I was trying to get at. You have put it more succinctly.

 

Regards,

 

Bill

[jaapv]

 

Jaap, I have no idea how Andreas Kaufmann made his money — for all I know he inherited it. In either case your comment is not a good guide to what may be happening. What is more relevant is Leica's financial performance in the last — take your choice — 10-40 tears, or take the last 2-3 years and the financial performance with the M8.

 

—Mitch/Potomac, MD

Bangkok Hysteria©: Book Project

Dr. Kaufmann makes his money by owning high-tech companies. It made him and his family the richest family in Austria. If you are interested you can research ACM holdings, it is no secret. That makes me assume he knows exactly what he is doing and I trust his judgement more than that of all the armchair CEOs on this forum who pontificate without the information, knowledge and/or skills he appears to have.