vote the price

Started May 23, 2011 | Discussions thread
jmcminn1076
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Re: vote the price
In reply to KAF18500, May 23, 2011

KAF18500 wrote:

Give 2 weeks. Although the the rise of R&D, component change and production have increased in the last 6 months, the current launch price is above the range. Internal discussion is going on. Please wait.

There are no takes for (1) even if bundled with 3 lens?

well, 99% of SD1 users are going to, or have already bought Sigma glass. There really is no consumer advantage to a bundle at that price point. Part of the problem here is that Sigma glass is not expensive relative to the MSRP of the camera. The most expensive practical Sigma lens (the 120-300 f/2.8) has a MSRP of half what the camera in question is trying to fetch, and even it is someone special purpose. For the must have lenses, the 17-50 and 70-200 2.8 OS lenses total rougly $2000, plus another $1000 lens, and you're still talking $6500 for the camera body at the $9800 MSRP point.

To strip this down to the core elements, Sigma has an R&D cost associated with the camera that is fixed no matter how many cameras they sell. They also have a manufacturing cost that is per camera. The difference between sale price and per unit manufacturing cost per unit times the number of units sold is the number Sigma needs to maximize. (if the R&D was too high, they just lose, because they can't get that back by upping the price of the camera since volume is inverse to price).

So if the manufacturing cost is really such that they can't sell the thing above manufactureing cost in the $2000-$3000 range, then they should just kill the product, or better hire someone else to design the manufacturing project, because there is no way this should cost that much to manufacture -- if it did, the SD14 and SD15 wouldn't be viable at their price points either.

The latter case, would be that they are trying to sell n units at huge profit, instead of N units at smaller profit. The problem here is that n is exponentially less than N. I suppose at the crazy MSRP, the profit P is also an order of magnitude higher than 7D priced profit p, but I think N is a few orders of magniture higher than n. Let's assume the extreme... that the unit costs $1500 to make. Priced at $2300, they make a measly $800/unit sold. At $9800, they make $8000/unit sold (rounding for easy math). That is a 10x difference. But let's assume they can only sell 1000 of them at $10000 -- that still means they make MUCH more back if they can sell 100,000 at the lower price, since that is a 100x difference in quantity. (In fact, it's $72,000,000 more(!)) Obviously there is a bell curve between selling it at a penny over cost to manufacture and selling it at $8000 over cost where at some point volume times profit is maximized. Clearly the $9800 price point is NOT that point.

The only way this strategy makes any sense at all is if they only think they can manufacture "n" and not "N". This might even be the case given the earthquake, in which case you can expect the price to come down when manufacturing gets back to normal (although, from a long term marketing stance, I think they'd have been better off just having huge back orders than alienating their market, or even auctioning queue priority to make the extra money from the have to have it first crowd -- at least then people would know what they were paying for).

Assuming based on post history that KAF18500 might be a Sigma representative trying to figure out how to sort this mess out, I think the maximal volume times price is somewhere in the $2000 to $3000 range. I can't imagine having many takers above the price of the 5dII or D700. I personally would probably bite in this range. I don't forsee paying more than that for the camera, regardless of how good it is. As was pointed out above, in this range you're competing with D300s and D700 offerings, and while the IQ of the foveon may well blow those cameras away, I can promise you just on the published specs and the pictures of the camera that my D700 handles MUCH better when it comes to controls, AF system, shutter speed, frame rate, flash system, lens choice, and pretty much everything that isn't the foveon sensor.

 jmcminn1076's gear list:jmcminn1076's gear list
Nikon D800 Sigma SD1 Merrill Nikon AF-S Nikkor 24-70mm f/2.8G ED Nikon AF-S Nikkor 70-200mm f/2.8G ED VR II Nikon AF Nikkor 50mm f/1.4D +7 more
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