Why does it cost so much

Started Sep 17, 2009 | Discussions thread
Tim Robson
Regular MemberPosts: 174
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Re: Why does it cost so much
In reply to bosjohn, Sep 17, 2009

That's a very generous assessment, John, however I think Leica and their products deserve to be scrutinized in the same way as any of the other manufacturers.

bosjohn wrote:

Probably the most fre uently asked question about the M9 is why does it cost so much but the real question is how can they do what the do for so little. I make no reference to the performance only talking here about the manufacturing costs.

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The most obvious reason the Leica seems so expensive is the production of the company making it. They will measure their output in the very low thousands which of course means not savings from volume buying and selling. Also this very same company has been on the edge of going under for years making securing capitol loans expensive.

Leica's low production volumes and cost of capital are Leica's problem. If Nikon or Canon can provide a product with higher performance, similar or better quality and greater reliability at a lower price, then that goes a long way towards explaining their current dominance in the market. There's a reason why Leica has been on the edge for the last 30 years: the Japanese offered more versatile systems at a better price. Sentimentality and cachet will only take Leica so far.

But the biggest single factor in making the m9 so expensive has to do with the nature of the range finder camera. The view finder range finder assembly is very complicated and requires tolerances far tighter than any found in slrs.

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All this is hand work and expensive.

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All of these devices, whether DSLR or rangefinder, require assembly to extremely close tolerances. The Leica rangefinder reached its zenith with the M3 of 1954. That's 55 years ago. Fundamentally, it's a pivot with a prism at one end and a cam wheel at the other. The system was simplified and cheapened with the M2 of 1958, and further simplified, and further cheapened, in the M4-2 and its successors in the 1970s. While the mechanism is precise, it isn't enormously complex, and is certainly rather less complex than the systems necessary to operate a reflex mirror, operate a lens aperture to a preselected opening, focus the lens and trip a shutter at speeds of up to 1/8000 of a second at a rate of eight or more frames per second, with an MTBF of 300,000 such exposures. The precision required in the focusing cams of an M lens is admirable, but Leica/Leitz mastered the technique in 1932, and Cosina, Pentax and others have pulled it off much more cost effectively since.

Add into the mix the cost of german labor and other business costs in germany and it gets even more remarkable.

I think the cost of labour and other costs of doing business in Germany are a large part of the equation, but I'm not interested in paying a premium to sustain the German social safety net. Leica pursues business strategies with it's own self interest in mind - I do the same. If they can offer a competitive product at a competitive price, then they'll get my business. If they don't, they won't. Nikon builds the D700 in Japan, also a high cost jurisdiction, and manages to sell it for a fraction of the price of the M9. The D3x, which is built in the same plant, is priced at a similar level to the M9, and the Nikon crowd has been extremely critical of that price point.

The comment on German business costs seems to assume that all, or most, of the production costs for the M9 are incurred in Germany. That is far from clear. Based on the "factory tour" that the DPReview guys provided, it appears that all that is happening in Solms is final assembly of three or four sub-assemblies, which are pictured in styrofoam totes, and final QC checks. The sub-assemblies (including the fully assembled rangefinder) are coming from elsewhere - likely Portugal, but who knows? It would be interesting to find out.

Then there is choice of materials and the general fit and finish level that have few if any peers in the photographic world. I am surprised that Leica can do it for only seven grand.

Leicas are certainly nicely made, but the days when they were assembled wholly by hand using "fit and file" techniques ended around 30 years ago, and there have been many comments here to suggest that Leicas may no longer be living up to their old reputation for quality and durability.

As an indicator of how tight the budget for the m9 consider Leica's decision to use the Kodak sensor. Now what ever else we think of Leica they are not stupid and they are well aware that the high iso performance of the Kodak chip in the m8 and m8.2 is considered by many to be is short coming and remembering all the problems with the original m8 the only conclusion I can draw is that Kodak was the only viable source of sensors that would keep the cost of the camera in reason.

I hope that's not the case. Economizing on the most important component of any digital camera in order to build a pretty camera with a cool focusing device strikes me as a rather backward approach for a company serious about photography, and all the justification that would be required to buy another camera from a manufacturer that has it's priorities straight. But then again, Leica did give us the Hermes M7, didn't it?

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