Leica S2 Brilliant or Madness: Its all in the business model

As a long time leica user, I have progressively become more and more dissatified with Leica and the apparent lack of direction the company has taken. Financial problems and frequent management shufles have had a direct impact on the company. Having been in the financial management field for years, I was amazed at Leica's refusal to change its business practices and reform its business model in light of digital imaging. Well much has changed in the last few years with the release of the DMR digital back, the digital M8 and now the S2.

The question at hand is: does the S2 represent a return to Leica's old business or is this indeed, as the management would like you to believe, a return to Leica core belief systems with a NEW digital implementation strategy?

Pro: the S2 represents a bold new dimension in digital photography, redefining and creatiing a new standard?

Con: the S2 represents a extremely risky venture, for a company with poor cash flow trying to create a new market, when it should be focusing on all the current Leica users, particulary the R system users, who are Leica bread and butter?

Have fun

Based on what I heard this morning from some friends who sell equipment into the commercial photographic market, the Leica S2 represents a camera that a lot of their customers have been waiting for. They've already got pre-orders for it.

Godfrey

ClipperC wrote:
snip

ClipperC said:

Con: the S2 represents a extremely risky venture, for a company with
poor cash flow trying to create a new market, when it should be
focusing on all the current Leica users, particulary the R system
users, who are Leica bread and butter?

Click to expand...

for Leica is the M line

the user base for the M is much, much larger & the folks at Solms (Wetzlar) can be assured of putting Euros in the bank with the new lenses and accessories for the M

the S models are important for prestige & I think will fill a high profile, but small niche

the R line will advance as well as I believe the S lenses will be available with an adapter to it & I suspect Leica has something in the works to get a fully digital R out, but there will be a wait ...this will doubtless incorporate many of the design features of the S model (AF, design simplicity) & will probably be released shortly after the S
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pbase & dpreview supporter
DPR forum member since 5/2001
http://www.pbase.com/artichoke

as usual, I see things like Arthur does. The S line will establish a high end presence for certain top pros which will invigorate the long delayed full entry by Leica into the digital age. Lessons learned in developing this system, such as having IR absorption applied to the sensor, will trickle down to both the R and M lines. best...Peter
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http://www.innerimager.com

"Pro: the S2 represents a bold new dimension in digital photography, redefining and creating a new standard?"

Not sure "standard" is the right term here. Unless a few more companies follow suit and adopt this sensor design, this will be a proprietary technology, which I think is not such a good thing. I would like very much to see them succeed, but in my opinion they are missing the boat.

If this thing flops (or even stumbles) it could be very bad for the company. I should think that Leica would have been better served by introducing a moderately priced RF, that would allow us Leica users to put our lenses to use on a digital RF, plus stimulate new sales of new bodies and more lenses, which would put some much needed cash into the bank.

I think the old rule applies...when in a hole, stop digging. I am afraid Leica just keeps on digging.

back up buddy, there are millions of out of date Lenses (Pentax, Nikon, Canon, Contax to name a few) but guess what, things move on. Yes I'm sure with an adaptor you will be able to use R & maybe M lenses on the new R10 & S2. The new lenses will match the new electronics therefore giving the optimum image & do you remember Xply tires? yes there are still millions out there somewhere but we buy Radials!
You sound like you have buyers remorse without having purchased the product.

--
Ima' nice kinda guy!

I think the S line and the work they did on Maestro with Fujitsu and the new autofocus are the base that they can build off of for the R next generation M and hopefully we will still see a CL type M model.

Personally I am very excited about the developments
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terry
http://tbanet.zenfolio.com/

From Luminous Landscape, on the 2006 Photokina.

"The situation is this. The Hasselblad H3D, just introduced at Photokina, will be by the company’s own admission, a closed system. This means that the camera will only interface with either a 22MP or 39MP back made specifically by Hasselblad for this camera, and presumably future backs from Hasselblad as well. No other company’s backs will be able to be used. This was stated publicly at a Photokina press conference by Hasselblad’s CEO, Christian Poulsen."

http://www.luminous-landscape.com/photokina/H3-concerns.shtml

--
'You know he heard the drums of war
Each man knows what he's looking for'
'Sean Flynn' by The Clash

Brilliant!

Another "me too" - R model dSLR would have been madness.

Leica has learned from their past mistake & not repeated it. The R is the failed past - bury it deep.

The compacts, M's & the S . . . . the successful past, present & future.

Well done Leica . . . . may ye' live on forever . . .

--
Vaya con Dios.

imo
(c) fastglass

ClipperC said:

Con: the S2 represents a extremely risky venture, for a company with
poor cash flow trying to create a new market, when it should be
focusing on all the current Leica users, particulary the R system
users, who are Leica bread and butter?

Click to expand...

Just wondering ... how do you know that Leica has poor cash flow?

Have you seen the new facilities they're building (indicating a fairly healthy cash flow)?

Surely, having been in financial management for years, you understand how important a flagship model and trickle-down technology are to a company like Leica.

Methinks some deeper research is required.

--
~ Kent ~
Look with the eyes, see with the soul.
http://www.kent-media.com/

Hello Kent,

By definition cash flows represent the inflows and outflows of money in a company. As per its last exchanged released documents outflows exceeded inflows. However, with the recent purchase of leica by Mr. Kaufman, who is a very wealthy individual, Leica was given a very health injection of capital. I am not sure how many times Mr. Kaufman will do this as history shows one thing: wealthy individuals do not want to loss their wealth. Mr. Kaufman obviously believes he can turn the company around and make it profitable.

My initial question was my wondering mind looking at both sides of the equation. In fact, after consideration and after weighting both sides with the information available to me, which is not current, is:

"the S2 represent a return to Leicas past, as a leader in the field and a force to define the market and influence the art of photography to produce the perfect Leica picture."

Personally I can not wait to hold one in my hand and try it. While I do not know if I would ever own one, as I am not a professional photographer, I can not hold back my enthusiasm about this product and the direction Leica has taken.

I too wish to state: Bravo Leica, it was worth the wait. I truly hope the S2 is a smash hit in the market place responds accordingly when it arrives in the miiddle on next year.

Cheers Richard

I think Leica’s S2 and their timing of the presentation are signs of brilliance! Leica have lost years by (seemingly) ignoring the digital future of photography. While Leica have never marketed their cameras with the goal of selling to the masses (while recent collaboration tried to participate) it would seem that Leica have again taken the route of offering uncompromised quality. Larger sensors offer great advantages to professional photographers and those amateurs with adequate cost coverage. Even these markets will think twice before ordering an S2, but I believe the market is there and I believe the S2 will excel in that area.

While the M8 basically has no true competitor (digital RF with exchangeable lenses), an R10 would immediately be compared with current outstanding FF bodies of the known Japanese manufacturers. An R10 could never hope to truly compete in that arena. Autofocus (which I don’t need) would be required as well as a technology which would allow the body to survive a number of years before the R10.2 or R11. Leica could never hope to present new models in the amount or frequency as their Japanese competitors.

I’m quite sure Leica have properly evaluated their market possibilities and will design accordingly. Never will any manufacturer fully please all photographers. But I believe they will try their utmost to satisfy those demanding photographers for whom Leica fit their requirements. People looking for an inexpensive D-SRL as a Canon 40D alternative will never find their happiness at Leica and continue to complain. I see the S2 as a perfect tool following such a strategy. That said, all we really know of that camera is what we’ve read but still, I wish I had the cash to buy one once it hits the market. Maybe I’ll start saving in earnest a bit more.
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Mike

I would love to see a supported digital rangefinder that I could afford.

Right now, that would be a body in the $900-1200 range .....

barring that, start making glass for the m4/3 system. It's open, and the leica brand is a cash cow ....... for lenses .... I have a feeling that there are a enough folks out there willing to pay $900 for Ziess/Cosina, lenses, so there should be those willing to pay the same for Leica m4/3. Get the glass sorted, then put out a digital range finder!

The real question is how not to kill the M8-9 series with a D-CLE!

If they develop a strong rental model, I'd be happy to pony up $400 for a weekend of not quite medium format S shooting!

Dave

Nikon user - longtime Leica admirer here. I congratulate Leica on the S2 - I expect this will have a positive impact for all photographers as other OEMs respond.

However, as a business model I too think that the company may be better served by producing a moderately priced rangefinder with a moderately priced "kit" lens.

Why? From reading this forum it is clear that there is pent up demand for a high quality compact size camera with large sensor and optical viewfinder - an excellent opportunity for Leica to expand their customer base for rangefinder cameras.

Think of it this way, Nikon is currently selling D300, D700, and even D3's to the same people that once purchased D1 and D70 cameras. And they are selling upgraded lenses to replace "kit' lenses as well. They clearly expanded their customer base with their early digital cameras.

It seems to me that in the digital era - many people are not looking for an M series 30 year+ body with a digital sensor that will be obsolete within 5 years.

However, an entry level rangefinder would fill a market segment that currently has no supplier, and no one is currently better suited to do this than Leica.

Leica's problem?...time. Someone will fill this market demand and it would not surprise me to see Nikon step in soon (with either a rangefinder or a digital FM) - whoever does it first will strike gold IMHO.

Just my thoughts.

Larry from San Antonio

but their competitive advantages, superb optics, superb mechanics, fit and finish will require superb and innovative design and rapid, nonstop execution in a world where electronics and imagination will ultimately determine the winners.

What will the world be like a year after the S2 comes to market? A new 1ds from Canon, which will certainly have all the features of the 5d/MKII, and perhaps an improved processor, will challenge it from below. Nikon and Sony will also be threats. MF cameras will continue to evolve and be more accessible for price. How field-worthy will the S2 be? How quickly can it evolve in a fluid world?

If it were suitable as a walk-around camera, I would buy it. But I doubt that.

Well,time will tell.

--
Frank
http://www.sidewalkshadows.com

The S2 is sheer brilliance.

Leica is a premium brand. They must occupy the quality high ground, both in terms of build and image quality.

Like it or not, they're always going to be playing catchup in the 35mm digital market. Canon/Nikon will always have the better sensors, technology and processing. Fact.

The S2 neatly sidesteps all that. Leica are smaller, and can move more quickly. They don't annoy as many people by establishing a new lens standard - and by going up a format they're back where they should be - with an image and build quality advantage compared to their competitors.

It's just a shame I won't be able to afford one.

I thought romantics and the rest
root for fun!
No wonder LEICA owners and users have
concerns...
Otto
--
noise to one is music to another

As Nikon user wanting to upgrade to MF n the not too far future (and also keep shooting with something like the D3) the S2 looks very interesting to me. It will probably deliver better quality than a Nikon and better portabilty than a Hasselblad.

However, it is not really MF, the D3 is already a great camera and the next FX camera will probably haven even higher image quality. MF prices are going down. MF will continue to get faster handeling/higher ISO's I assume.

If you look at it this way, in a year or so, the S2 can't really compete with the diversity of a Canon or Nikon DSLR while the IQ quality of those cameras I suspect isn't that much behind the S2.

On the MF front a real MF will have better IQ while being not that much more expensive.

So the way I see it is that there isn't any real advantage for having the S2 over having a good Nikon/Canon and a real MF (for a high end user). There will ofcoarse be a market for the S2, that really can use better IQ than there's available in another DSLR, but more portable than a real MF camera.

The only way to survive for the S2 is to price really agressive (around 6000 euro) since the price gap between FF en MF is getting smaller. Price it too high and people buy a real MF camera or stick with Nikon/Canon.

I'd love to be blown completely away by the S2, but it does have to be really good and really good priced to be a succes. And to be realy good it should handle like a smaller DSLR (current D3 for instance), but I don't think it will and the IQ isn't going to be same than other MF ( I think, due to smaller sensor)..

All in all, I think it almost can't be succesful, unless it really causes a revolution in digital photography.

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http://www.iljameefout.com

As much as I admire the design and execution of the S2 (wish others could go this far especially in design terms) its pricing may only suit those professionals able to cover its cost in pretty quick time. So I imagine Leica's volume target is modest while the profit margin is substantial (the S2 development cost has got to be huge) per unit. At half (or less) its projected price it would appeal to many more professionals active in a wider range of picture-taking scenarios, from concerts to weddings. As a sort of hybrid design (a medium format camera in the shape of a relatively small dslr), and at a lower price point (with lenses similarly priced) 1DS (and future Nikon high resolution models) users could be tempted. It's then feasible that volume targets could be exceeded off the scale and effectively generate much greater profits while still retaining product integrity (and enhancing it across a much wider marketplace). Okay, I know an R10 is planned for god-knows-when but this is a bird in the hand which could provide the dslr market niche for Leica at a time when there are few (or no) real competitors. And once bought it could generate customer loyalty that many makers could only dream about.

And secure Leica's future big-time with the R10 becoming the additional, next purchase. Franfly, today it's not good enough to just develop a great product, one needs a marketing strategy which takes in pricing, and I just wonder whether Leica understands the real potential of this camera and the market's potential response to a more favourable price structure.

Tony