This is my current take on the SD1 price

Started Jun 11, 2011 | Discussions thread
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Roland Karlsson
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This is my current take on the SD1 price
Jun 11, 2011

I know - there are already lots of speculation regarding the issue of the surprisingly high price. But - if we omit the theories that says the owners are insane or there is some political reason - I think I have the only theory that fits it all so far.

They knew the development of a new sensor and a new camera was expensive. They also knew that they needed to order at least 10,000 sensors in the first batch - which is lots of money. All this is a nearly constant and very high cost. They were prepared to take that cost and sell the camera at a loss - just to get into the market with the fantastic SD1. That was their plan and that was why they leaked the $1500 (or so) price earlier.

That was the plan - and it was a good plan. An SD1 for $1500 would sell very well - and the next batch of sensors would be much cheaper. It might even be break even or a gain this time. But even if it wasnt - Sigma would have a place in DSLR market.

But - something went wrong just before the release - something that makes it very expensive to actually make each camera. Something not foreseen. Therefore the plan to sell 10,000 cameras fast (at a loss) and then sell 10,000 more at a gain is no longer possible.

Thats my main guess. And I am quite sure of it (if we remove the insanity or political reason).

Now - I have also a guess what went wrong. This is less certain.

I guess what went wrong was that the high IQ yield was low and that it is very expensive to test out good enough sensors. I assume they got a good yield on working chips - just as expected. But many of the chips had IQ problems. Now - testing if the chip works at all is fast and inexpensive. But that it has high IQ is more problematic. Therefore there is lots of work - i.e. high cost - for every camera. It might even be so that very few of the 10,000 chips made was acceptable. Then we - apart from the high cost per camera - also have a high manufacturing cost as most sensors have to be thrown away.

Now - the second guess might well be wrong. Maybe it was something else. The tsunami might have flooded the store with the sensors and destroyed all but 500 of them. Less likely - but would lead to the same problem.

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