Is this the year Pentax makes or breaks your FF dream?

Started Jul 16, 2014 | Discussions thread
John_A_G Veteran Member • Posts: 7,542
lesson in manufacturing & marketing economics

Leandros S wrote:

John_A_G wrote:

zakaria wrote:

2 years to 5 this system will be as full frame price. I MO.
pentaxian .

Why do you think cost will come down so rapidly?

Larger sensor, requiring larger optics and very small production runs. No manufacturing competition for sensors. There is nothing driving the cost down on that platform.

That's the chicken and egg fallacy in a lot of people's thinking. As the price goes down, so do the manufacturing costs because demand increases. Manufacturing costs are only relatively high as long as demand is low. Additionally, there are diminishing returns - small suppliers can reduce their costs more effectively in response to added demand than large suppliers can. So as demand increases, the gap between high volume and low volume producers closes.

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No amount of perceived entitlement can replace actual expertise.

Manufacturing costs go down when:

1) raw material or vendor supplied prices go down

2) manufacturing process steps are reduced

Per unit costs go down when you have longer manufacturing runs.  In other words you want full utilization of your manufacturing equipment.

That's how manufacturing works in the real world.  Now, without demand increase you aren't going to get more utilization out of your manufacturing lines.  So, per unit cost isn't going down.

So, let's look at glass cost.  Why do you see that going down?  The cost of everyone else' pro grade lenses are going up not down.

While circuit board costs in general go down - unless you're sharing specific components with other buyers, again you are buying from low yield stocks so the price of YOUR circuits isn't going down.  I can't say whether the components the 645 uses are the same as what others are using.  BUT, the sensor is unique.  Again, the supplier isn't doing large runs because there is no demand.  So, the cost of those isn't going to come down.

I suspect that full frame cameras will be very much like the auto industry - extremely low margins.  So, you must sell volume to be successful.

Because medium format is such a small niche, the margins remain high.  Try to reduce those margins to bring in buyers and those enthusiasts are going to say "..gee, there's only a few lenses, it's not something that is designed to focus fast or have fast frame rate I'm just going to give up too much to get that extra resolution".  So, what ends up happening is with the lower margins to try and compete with full frame you end up having huge losses.

Sony, Canon and Nikon were able to keep margins a bit more in-check because they had more volume sales.  If the 5dIII and 645 had the same profit margin, Canon would sing but Pentax would sink because unit sales would be so small.

Trying to have a more expensive form factor, with less lens availability, little third party support (which Pentax users rely upon HUGELY) and a non-imaging feature set below the competition will fail.  Medium Format is Medium Format.  Trying to compete with Full Frame performance cameras is a recipe in disaster.  Keep it a niche where it can be a successful product line

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