Nothwistanding the Pentax users' s hunger for long tele...

Started Dec 17, 2013 | Discussions thread
paulkienitz Veteran Member • Posts: 5,296
Re: Myths die hard

moving_comfort wrote:

paulkienitz wrote:

Yeah, that whole argument that a small volume FF could be profitable at $1800 was, as far as I could see, based on entirely made-up numbers.


It's not, it's made up of things we know.

Take the D600. In many ways, a D7000 clone with a sensor that cost about $250-$300 more than the $50 sensor used in the D7000. The other differences (larger VF housing, larger mirror, larger mirror box, slightly different ASIC programming and changes) do *not* amount to very much, despite what some people assume, probably less than $100 per body, much less than the sensor delta. It's really almost the same camera. A body teardown like they had on Reddit and Zite last year will flesh this out, and others have written about it.

So, we have a $1200 initial msrp body vs. a $1900 msrp body, a $700 delta, with the $1900 body costing the manufacturer between $350 and $500 more than the $1200 body. This puts the D600 at a per-unit profit at least $200 more than the profit realized by the D7000.

I think the problem is that people wrongly assume that vastly more expensive components go into these prosumer bodies vs. lower-mid tier aps-c, and that's not true, or that huge volumes are needed to achieve ROI on a supposedly-huge body R&D budget. Not true.

Where the big R&D budgets need to be allocated is in the lenses, which is the main reason Pentax has not jumped on FF yet - it's not about the body, which will be per-unit profitable.

This has been discussed more in other forums (to death!) and it's a newish idea in Pentax land, where the myth of 'lower-end FF is a money loser' still lives.

All of those dollar figures are predicated on large sales volume, big enough to flatten out the per-model costs relative to the per-unit costs. You cannot estimate profitability per unit based on large-scale per unit costs, if you don't sell in high volume. How many first-generation FF bodies will they actually sell? It might be a number as small as ten thousand. What happens to your $500-per-body cost increment then?

Was it you who also made the point that the development and startup costs for a new lens model are higher than those of a new body model? Consider that this body can only move forward successfully if there are several all-new lenses for it. Without them, sales of the body will be ridiculously puny, going to the kind of people who will be using screw-mount adapters for half of their shooting.

Small parts cost doesn't mean a thing unless you can also do it with small up-front investment, and you can't. Not unless you want to sell to a really narrow niche, in which case you still lose money.

And that's actually a perfectly okay path for Ricoh to take, I think. They only need a tiny toehold in the FF world today. Just enough so that if in five years FF really pushes aside APS in the amateur and enthusiast SLR markets, they'll have had the time to transition, with each generation making their FF line more and more mainstream. Of course, with that approach they probably should have started a couple of years ago.

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