It appears Canon has solved the banding issue? 6D!

I was really only commenting based on what I know about the semiconductor business, given that I have been in it for some 20 years. The Sony semiconductor business could be considered a pure play semi buiz, and as a consequence Sony needs to make some money on each chip they sell. If it costs both companies $100 to make a sensor, Canon pays $100 if they make it themselves and $150 if they buy it from Sony.

I don’t think that this is where the real issue lies though.  If Canon buys these things from Sony, then they are still funding that fab which is now not making sensors.  So they need to fill up the fab line with something else (sensors for copiers perhaps?... who knows) but if they don’t have anything else running through there, they end up having to pay $150 to Sony, while they still have the fab cost on the books.  I think this has more to do with it than the parts cost, because if you think about it, the Canon architecture carries with it the additional cost of the external AFE which may offset any savings that canon gets from making their own sensors – Sony doesn’t need this as their ADC is on-chip.

IMO, this whole thing is a cost issue.  The Sony architecture brings a benefit in terms of read noise.  If I was Canon, I would be looking at how many more cameras I would sell if I incorporated this “Feature” (and that is ALL it is – a feature) versus what it costs me to add it.  If they decide that it is a necessary feature, then how best to get it – build in house or buy the IP externally.  If we buy, then what do we do with the fab, can it do something else, or do we sell it off.

As for your second part, I think that the pricing on these things is more about “value” than parts cost.  I think it costs about the same for Canon to make a 6D as a 5DIII, but they feel that the feature set of the 5DIII justifies a price of $3500.  The market seems to be telling them differently, so we see these “fire sales” – the street price seems to have declined to $2900.  But at $2900 there still seems to be enough margin for both Canon and the store to make money.  If there is anything that might drive Canon to eliminate the AFE (and as a consequence the DR issue and the propensity for banding) it will be the bottom end.  They make much less money on the DRebels and I think it is more likely that SoNikon will eat their lunch there.

Most fo this is speculation though, I know quite a bit about semiconductors and consumer electronics marketing but I really don’t know much about what goes on inside Canon or Nikon.  I do know a bit about Sony since I have sold chips to them in the past.  FWIW: there is an old rule of thumb that parts cost is about 1/5 sales price for CE stuff so that may give you a bit of a clue as to what the parts cost of these things are – but I suspect that this is more applicable on the DRebel/D5600 end of things then on the 5DIII / D800 end.

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