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noah_addis

M8 discontinued?

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No point keeping the M8 going: the only significant difference in production cost between the two is the sapphire LCD cover which can be deleted, and the lower-stressed M8.2 shutter almost certainly has a higher MTBF than the one in the M8.

 

Firstly, I can't challenge your manufacturing cost statement as I don't have any facts. Can you share with us the euro cost differential for the various models ?

 

Whenever did production cost influence marketing strategy ? Is it possible that the M9 will actually cost less than the M8.2, but be sold for 50% more ? Perhaps the anticipated volumes for the new product will enable Leica to reduce prices below the film M's.

:rolleyes:

 

Fundamentally, it's about product positioning and margin opportunity. Selling price is decided by Marketing.

Edited by Rolo

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Andy they should have announced that M8 and M8.2 will stay in production as long as ther is demand six months ago...

 

Why? What good would that have done? None. It would have immediately got people saying "Why are they announcing this?" "What's coming?" "An M9?" "Are they going out of business?" "Is the sky falling, Chicken-Licken?"

 

It would be like BMW stating, today. "We will continue to make the Mini as long as there is demand". Err... so, what are you REALLY saying, Herr BMW?

 

Or "This breakfast cereal does not contain old engine oil".

 

I think that you are getting yourself very confused, Frank

 

There was never any question that they might drop their digital M - it's the cash-cow camera, as I said above. Of course they will continue to make digital Ms as long as there is demand. 6 months ago, the M9 was a long, long way away, so the M8 and M8.2 were, and currently are, the only digital Ms in town. Of course they're not going to drop them.

 

However, earlier this year, there was speculation that they were about to consider stopping making film Ms. That's why Andreas and his team made the video to show that they are still making M7s and MPs and will do so as long as there is demand.

Edited by andybarton

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Fundamentally, it's about product positioning and margin opportunity. Selling price is decided by Marketing.

 

Quite right Rolo

and if you have a relatively inelastic demand, and no competition, then there isn't much incentive to make prices competitive! . . . or to bring out budget models either.

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Why? What good would that have done? None. It would have immediately got people saying "Why are they announcing this?" "What's coming?" "An M9?" "Are they going out of business?" "Is the sky falling, Chicken-Licken?"

 

It would be like BMW stating, today. "We will continue to make the Mini as long as there is demand". Err... so, what are you REALLY saying, Herr BMW?

 

Or "This breakfast cereal does not contain old engine oil".

 

I think that you are getting yourself very confused, Frank

 

There was never any question that they might drop their digital M - it's the cash-cow camera, as I said above. Of course they will continue to make digital Ms as long as there is demand. 6 months ago, the M9 was a long, long way away, so the M8 and M8.2 were, and currently are, the only digital Ms in town. Of course they're not going to drop them.

 

However, earlier this year, there was speculation that they were about to consider stopping making film Ms. That's why Andreas and his team made the video to show that they are still making M7s and MPs and will do so as long as there is demand.

 

If what you say and Leica have done the M9 launch and current positioning of M8 is correct. Leica have kept quiet about M9 for good reasons I agree. What they have not done is positioned M8 as a low price entry model that will be in program for a long time ...possibly that is part of the Sept 9th announcement. I hope so.

 

I guess that the revenue for April May June, (2nd Qtr results) and July Aug Sept (3rd Qtr) should be great and the M8 cash cow will have continued to provide milk. The M9 volume when it starts shipping (I suppose in Sept.) will either be cream on top of the milk or Leica will only produce high value cream. We shall see

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Quite right Rolo

and if you have a relatively inelastic demand, and no competition, then there isn't much incentive to make prices competitive! . . . or to bring out budget models either.

 

I sure agree that pricing is a marketing job.

 

I also believe that if Leica have been smart and have comprehended lessons learned in producing the M8 ..... the M9 may actually even cost less to produce than the M8. Cost should not be relevant to sale price.

 

That said a market segment is usually defined as a "niche" where the clients have the same careabouts.

I therefore agree that if the niche is a client base where clients only want to buy a high end rangefinder camera and nothing else then bringing out a budget model is not viable.

However surely the trick for Leica (who apparently have 95% penetration in the high end rangefinder niche ) is to grow their target market segment and then I could believe that an entry model most likely is a key need.

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Firstly, I can't challenge your manufacturing cost statement as I don't have any facts. Can you share with us the euro cost differential for the various models ?

 

I don't have any privileged access to the facts. But unless there is something that everyone has been keeping very quiet about, there is absolutely nothing in the M8.2 that costs significantly more to buy or make than the equivalent component of the M8 except for that slab of sapphire.

 

Whenever did production cost influence marketing strategy ? Is it possible that the M9 will actually cost less than the M8.2, but be sold for 50% more ? Perhaps the anticipated volumes for the new product will enable Leica to reduce prices below the film M's. :rolleyes:

 

Fundamentally, it's about product positioning and margin opportunity. Selling price is decided by Marketing.

 

Production cost directly influences the margin. It's also a major factor in the decision-making of potential competitors. So any firm whose marketing strategy ignores costs is probably not a good one to invest in.

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Here in Norway, one reseller have dropped the M8.2 prices to NOK 36.999 (approx

€4.300), while others still list the camera for an astonishing NOK 50.269 (approx €5800)

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Here in Norway, one reseller have dropped the M8.2 prices to NOK 36.999 (approx €4.300), while others still list the camera for an astonishing NOK 50.269 (approx €5800)

About EUR 3,500 in Hong Kong.

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in my view they should in anycase continue M8 as a low cost entry model.

 

In my view they should have one low cost entry model which should fit with the Leica positioning. A silent shutter is one of Leica's key differentiations, and it is missing in the M8. So I guess it must be the 8.2 or something new (a new CL...).

 

Don't forget: The M 8.2 is marked as such only on paper, the camera itself is labeled M8. A clear indication that it is the new/current model.

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I sure agree that pricing is a marketing job.

 

I also believe that if Leica have been smart and have comprehended lessons learned in producing the M8 ..... the M9 may actually even cost less to produce than the M8. Cost should not be relevant to sale price.

 

That said a market segment is usually defined as a "niche" where the clients have the same careabouts.

I therefore agree that if the niche is a client base where clients only want to buy a high end rangefinder camera and nothing else then bringing out a budget model is not viable.

However surely the trick for Leica (who apparently have 95% penetration in the high end rangefinder niche ) is to grow their target market segment and then I could believe that an entry model most likely is a key need.

 

Why? I don't believe the market for rangefinder cameras is ever going to be enough to produce real cost savings in manufacture, an entry model at the sort of price which was achievable probably wouldn't grow the target market by more than a few percent, but it would certainly drastically reduce the sale of the top of the range camera. Sounds like a disaster to me.

 

Remember that Zeiss told (was it Sean Reid - someone significant) that they weren't going to bring out a digital rangefinder because they couldn't compete with Leica's current prices.

 

Discontinuing the M8 and M8.2 and bringing out an M9 at a little more than the price of the M8.2 sounds like a masterstroke to me. There will suddenly be lots of M8s for sale at sensible prices which will be bought by people who will first buy lenses and then M9s.

 

This keeps the secondhand values relatively high, which makes existing users more comfortable, it sells more lenses, and gets more people into the system without bastardising the margins on the M9

 

Selling a 'cheap' entry model will make the secondhand prices on existing cameras plummet, thus making the purchase of a new camera seem like a much dodgier business, added to which it will certainly reduce sales of the top of the range models, and hence profit margins.

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I highly doubt that the M8/M8.2 would stay in production after the M9 is introduced and certainly not as the low cost model.

 

Just take a look at the thread that shows the insides of the M8.x. It looks like it was put together in the 1990's. Mostly off the shelf components etc. It must be expensive and time consuming to produce. The M9 will probably share all sorts of parts with the S2, which will help drive down costs for both products. In light of that the M8 will be hopelessly obsolete from a production standpoint.

 

Besides, from a marketing standpoint Leica is going to have a hard time selling a camera that is 3 years old....

Edited by thrid

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Selling a 'cheap' entry model will make the secondhand prices on existing cameras plummet, thus making the purchase of a new camera seem like a much dodgier business, added to which it will certainly reduce sales of the top of the range models, and hence profit margins.

 

Digital cameras are like computers. And like computers they do not hold their value, unless 20 years from now they become rare collector items. Everyone in the market seems to be ok with that.

 

The pros that shell out $8000 for a D3x write a lot of that cost off and (hopefully) the camera will more than pay for it self.

 

Any civilian who can afford a $8000 camera to take pictures of their cat or kids playing in the park, will probably have forgotten what closet they shoved it in 3 years from now, when the new model comes out.

 

Leica needs a tiered product line if they want to survive. 12,000 M9 bodies per year is not going to bankroll the R&D needed to sustain the company in the digital age.

Edited by thrid

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Leica needs a tiered product line if they want to survive. 12,000 M9 bodies per year is not going to bankroll the R&D needed to sustain the company in the digital age.

 

Maybe - I don't deny it. But that doesn't include an entry level rangefinder. Who on earth will they sell it to?

 

The S2 and the M9 seems good and fine to me, and creating a cheap rangefinder (if it were possible, which, on Zeiss's comments it seems it isn't) would be catastrophic.

 

I reckon they already have the first tier (dlux-4 and classy compacts). The obvious second tier is to get involved in micro 4/3 which is good quality and has a good future, and suits leica down to the ground.

 

That leaves the M9 as a third tier and the S2 a fourth.

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Why? I don't believe the market for rangefinder cameras is ever going to be enough to produce real cost savings in manufacture, an entry model at the sort of price which was achievable probably wouldn't grow the target market by more than a few percent, but it would certainly drastically reduce the sale of the top of the range camera. Sounds like a disaster to me.

 

Remember that Zeiss told (was it Sean Reid - someone significant) that they weren't going to bring out a digital rangefinder because they couldn't compete with Leica's current prices.

 

Discontinuing the M8 and M8.2 and bringing out an M9 at a little more than the price of the M8.2 sounds like a masterstroke to me. There will suddenly be lots of M8s for sale at sensible prices which will be bought by people who will first buy lenses and then M9s.

 

This keeps the secondhand values relatively high, which makes existing users more comfortable, it sells more lenses, and gets more people into the system without bastardising the margins on the M9

 

Selling a 'cheap' entry model will make the secondhand prices on existing cameras plummet, thus making the purchase of a new camera seem like a much dodgier business, added to which it will certainly reduce sales of the top of the range models, and hence profit margins.

 

Jono, Stefan Daniel appears to agree with you on entry level cameras, go straight to the head of the class

from the address by Stefan Daniel at Hessenpark in June, shortly before my bratwurst and Pils arrived

Summary detail from the summary by Andreas

 

M8 Upgrades

  • No more upgrades are planned
  • Dealers don't like upgrades as no additional sales are generated
  • The M8 upgrade constrained Leica M8.2 sales
  • Used cameras are entry level cameras thus attracting new customers to Leica
  • This would drop by future upgrade offers

Edited by hoppyman
typos

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Maybe - I don't deny it. But that doesn't include an entry level rangefinder. Who on earth will they sell it to?

 

There are a lot of people out there who would like an M8.x, but can't afford one, especially in this day and age. The M8.x is $5500. That is a lot of cash and a good step beyond something like the D300/D700 and 5D-2 that is about the upper limit for the majority of serious amateurs out there. Add to that the cost of almost anything but the 2.8/28 ASPH and you are at $10,000 in a blink of an eye.

 

The S2 and the M9 seems good and fine to me, and creating a cheap rangefinder (if it were possible, which, on Zeiss's comments it seems it isn't) would be catastrophic.

 

What would be so catastrophic about Leica doubling or tripling their sales? The loss of snob appeal to the gear polishers? Let's say the CL-D was APS-C (x1.5) with the standard M mount. There would also be a new line of cheaper, compact lenses that only cover the APS format. Anyone who had the money and really wanted to buy a FF M9 would still do so. Think of it like this:

 

D300s -> CL-D

D700/D3 -> M9

D3x -> S2

 

Leica may be the only camera maker on the planet, without a tiered product line up. Even the makers of medium format backs offer you some choice. They may have been able to get away with that in the film days, when you literally could expect to use an M body until they put you in a hole in the ground and all you needed to do was occasionally upgrade your lenses (every 20 years) and use the latest film emulsion. But that approach is not going to work in the digital world.

 

I reckon they already have the first tier (dlux-4 and classy compacts). The obvious second tier is to get involved in micro 4/3 which is good quality and has a good future, and suits leica down to the ground.

 

That leaves the M9 as a third tier and the S2 a fourth.

 

Those compacts are point and shoots. That's like saying Canon should dump the Rebel and D50, because the have the Elph and G10/11. The D-LUX is a P&S and a very good one at that, but it is nothing more.

 

So, right now they are jumping from an overpriced $800 compact to a $5500 M8 and the $20,000 S2. That's not a very sound lineup.

 

M4/3 may be doing well for now, but things will get tougher for them once Nikon and Canon start to stick APS-C sensors in to compact bodies. The 4/3rd size chip is too small to compete with APS in terms of IQ. On average 4/3rds cameras deliver a stop less of dynamic range and are 1-2 stops behind in high ISO performance, compared to APS. Therefore I'm still not convinced that it is going to survive in the long term. M4/3 is also dependent on EVF, which is an amateur solution and places limitations on the use of the camera due to the display lag that is inherent to this technology.

Edited by thrid

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[*]Used cameras are entry level cameras thus attracting new customers to Leica

 

That line of thought may have worked with the film bodies, but in the world of digital a 5 year old camera is a door stop and very unsound business thinking.

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Production cost of M8.2 and M9 should be in the same range. Selling the M8.2 as a entry level camera will then kill Leicas margin, and probably also decrease M9 sales.

 

Not the best business proposition I've seen.

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