100-400 pricing and new equiment pricing generally

I keep seeing references to Panasonic (and Olympus) price gouging when they introduce new equipment. Or complaints that the new item is just not worth the extra money compared with the older item.

There are a number of factors involved here.

1. The actual costs -- developing a new item, even one that uses a lot of bits from established items, still has its research and development costs and its implementation costs of manufacturing. It must cost more than an established line -- at least initially.
2. Manufacturers set up their write-off of the costs of development unevenly; they like to write off as much as possible early in the sales cycle so the first price includes a disproportionate share of the development costs.
3. Having factored in those costs, manufacturers then look at what the market will bear. They do focus groups and surveys, they look at what is selling and for how much, then make their decisions about the launch price and the step-wise discounting throughout the product's life to come up with an overall return and profit figure. If a product proves unexpectedly popular, they will stretch out the discounting steps so that it holds its price at each level longer; if the market doesn't take it up, then they will compress the steps, discount the item faster, and accelerate the introduction of the next new product if possible.
4. New equipment is generally aimed at a specific market or group of users or potential users. The Pen F is a classic case -- a very capable camera, so it would appeal to some regular m43 shooters, but also styled for hipsters. Olympus would have been hoping to attract buyers from among regular shooters, what we might call "real photographers" (without denigrating anyone else), who were attracted to the hipster style too, plus recruiting new users from among the hipsters who might have been using phones to date. Or whatever. On the other hand, Panasonic aimed its G7 solidly at its current G user base or people close to it. The "what the market will bear" pricing is set accordingly.
5. New equipment might or might not be superior to what went before but at this stage, improvement will be incremental rather than revolutionary. This is a very important point. Take the Panasonic 100-400 as an example. Some people are saying things like "the improvement over the 100-300 is not so big, it is not worth paying 4 times more for the new lens". (4x is an exaggeration; about 3x is the factor.) Do they expect a 3x increase in performance for the 3x price? In fact, camera lenses have long been in the marginal improvement zone -- looking for that extra 1% of performance in the 95-100% zone. In this zone, the cost of improvement is exponential. The closer we edge towards the 100% perfect lens, the the faster the costs rise in a geometric progression. These are real costs.
6. If we take the 100-400 as an example, there can be no doubt that it is a better performer than the 100-300 -- in fact, it is significantly better, a quite surprising move up in performance over a lens that has produced some very good work. Various formal tests show this, but even right now, there are two informal tests by fellow m43 users on this forum that show the difference. They are here and here . In addition, we have seen post after post of wonderful pix taken with the 100-400 and read descriptions of use that tell us it is way better than the 100-300 in AF, OIS, and build. It is clear that with the 100-400 we are seeing quite marked improvement, I reckon that far from the 100-400 being overpriced it might be said to be UNDER-priced taking into account the high costs of making thus kind of change.
7. Given that more and more users are realizing this jump in performance, and even such grumpy old hold-outs as me are starting to waver (oh no!), I reckon that anyone waiting for the big discounts to begin on this lens will be waiting for some time.
8. I would say the same thing goes for the Olympus f4 300 and its teleconverter -- it is a big step up in what is available at the long end of m43 but because it is a prime and basically a 300, and considerably more expensive than the Panasonic 100-400, it kind of stands alone so current Oly 75-300 and Panny 100-300 users who might be tempted by it can more easily maintain a mental distance between the two than they can between their current long zooms and the 100-400.

And that's all I have to say on this matter -- at the moment!

Hold out's retreat! Maybe the 100-300 was fine for this shot, but … AAAARRRGH!!!