[Leica] Nikon F3 and production generalities

[Mike Johnston <michaeljohnston@ameritech.net>]

>>>Shortly after reading this encouraging news, I then get to Mike's
post,
which states that the F3 has not been built for years. I think Mike
knows
his onions on that, so now I'm depressed again.<<<


Mike actually doesn't know beans, so maybe he should do a big fat _mea
culpa_ and back off. Fact is, I'm making assumptions, and we all
remember Felix Unger's rule about what we do when we
assume--ass/u/me--make an ass of u and me, although here it's possible
I'm just making an ass of myself.

Generally, the way Japanese camera production works is that there are a
limited number of production facilities which are scheduled to make
"runs" of a certain body, lens, or accessory. I'm not aware of how many
Nikon products are in continuous production (or if any are) and how many
are produced only intermittently. But for the most part, a decision is
made to make a run of a piece based on sales volume, or anticipated
demand; costs are figured; and a business decision is made as to how
many pieces will be produced, how long it will take, how much it will
cost, what the retail price of the item has to be, and so forth.

When a product sells much faster than anticipated, as many of the early
AF-Nikkor lenses did, they don't always have the ability to devote a
production facility to making more immediately, because the production
facilities are scheduled tightly and it's quite possible that they just
might not be available. This was the reason for a lot of the chronic
"shortages" of certain Nikon items over the years, especially in the
mid-'80s...I seem to recall that there was a long (on the order of
8-month) wait for a certain flash cord for the F4, for instance, that
had pros gnashing their teeth.

What happens with an older product the sales of which have slowed is
approximately as follows. A decision is made for a possible "final run"
of the item, again based on sales and anticipated demand. But the final
run may be based on the number of years they want to keep the product
current. So, in effect, they'd make a whole bunch of 'em all at once to
really stock up on the item.

Then, they can control the outflow of product with pricing. If they want
to move it out and get the items out of the catalog, down goes the
price. We're all familiar with that case. However, the opposite
sometimes happens too--they want to keep an item IN the catalog for a
long time, so up goes the price, to slow sales and postpone the
inevitable day when they run out.

This explains something we see sometimes, namely a sudden jump upwards
in price after many years. I'll give you an example. The first run of
the 35mm Zeiss shift lens for the Contax was done in the '70s. It was
priced according to the production costs when it was made, and it sold
out of NOS for years with a relatively stable price, around $600-$700
here in the States. Then, suddenly, sometime in the early '90s, if you'd
call one of the mail order houses to order one, you'd get put off--"it's
on backorder." "No, sorry, we can't get those right now, call back in 90
days." Then, the lens reappears in the marketplace--only it's now
selling for $1,800!

What happened? They simply ran out of stock from the first run, and
Kyocera had to decide whether to order another run from Zeiss. They
decided to go ahead, but naturally, Zeiss had to base the price of the
early '90s run based on the production costs of the new run, in the
'90s, which of course were much higher than they were in the '70s. Hence
the sudden jump in price.

Another example. Remember when the Mamiya TLRs were discontinued? From
what I heard at the time, Mamiya had run out of stock of the 330f or
whatever was current at that time, and had decided to do another run, so
they announced that the TLR would continue to be available. Then,
suddenly, it wasn't. What happened, at least according to the
scuttlebutt I heard, was that they made a decision about the size of the
run and then discovered that many of the old dies were too worn to stand
up to that much additional use. So the decision then had to be made
based on the costs not only of new production but of new tooling. The
costs were figured, the market was analyzed, and it became obvious that
the future market for the TLR didn't justify the costs of the new
tooling, because multiple runs couldn't reasonably be anticipated--but
the retail price of the camera over just one additional run would have
to be raised too much in order to cover the cost of the tooling--so the
axe fell and the camera was discontinued.

A final example: when Canon built the EOS RT in the '80s it was made in
a run of 10,000. They were on a roll with the 630 family of AF cameras,
expected high demand from pros and advanced amateurs for the RT, and
priced the RT as a premium product, something like $800 when it came
out. Canon at the time expected this to functionally be a limited run
that it would last only one year! For whatever reason, though, the RT
was stone-cold from the get-go. It simply did not sell. Who knows why?
For some reason, it just didn't appeal to photographers (it was a lovely
camera, one of the few cases where I've purchased a review sample after
reviewing it). It took six years--six times as long as anticiated--to
sell out, outlasted its "design parent" the EOS 630 (somewhat to Canon's
embarrassment), and was selling for as low as $399 at the end of its
lifespan.

And so it goes.

With any product, naturally, the business decision is going to be made
mainly on a sound business basis (although sentimentality does play a
part sometimes, believe it or not). I really have no idea if Nikon is on
the last run of F3s. Nikon probably doesn't either! The reason is really
not far to seek: the company will have to make the decision to produce
an additional run or discontinue the product based on the sales, market
projections, and production costs that pertain AT THE TIME THE DECISION
HAS TO BE MADE. That is, they really can't decide in 1995 that they're
going to make a run of F3's to last ten years (I'm pulling these numbers
of air, they're just "fer instances"), and then guarantee at that time
that the camera will be available until 2005. They basically have to
wait until the NOS runs out, and then judge the market conditions,
production costs, and profitability projections that pertain at that
time. They may end up making another run in 2002. Or, the 1995 run may
sell sluggishly and last 15 years.

Finally, many times, a factor that influences such a decision is how the
company is doing generally, and whether it has other profit centers.
Olympus has been one of the most profitable camera-producing companies
on the planet for much of the past decade, after facing a dire crisis in
the late '80s when it guessed wrong on autofocus. Do you think the old
OM system would still be soldiering on if this weren't the case? It's
far easier for a company to decide to continue manufacturing an older
product that has become a niche product if a.) they feel their prestige
will be hurt by discontinuing it, and b.) they can easily afford to keep
it going. (The converse of this is that sometimes companies have to
discontinue even profitable products if the overall picture is too bleak
and major changes in strategy have to be implemented.) Still, I think
it's highly likely that Olympus only very seldomly actually commits to
production runs of OM-line products, and is essentially selling the
entire system out of NOS (although they do occasionally introduce a new
product in the line).

So it could well be true that Nikon has made ten runs of the F3 in the
past decade and will almost certainly do more, or it could also be true
that they're still selling out of a ten-year-old run and will never make
the standard F3HP from the ground up again. Only Nikon knows! And only
Nikon really knows--if anybody does--whether it will make another run of
F3s if and when they're needed. The could be doing so now, for all I
know.

So, sorry I spoke so positively about the F3. I was making assumptions
based on general knowledge that may not in fact be the case. I may be
right; I may also be wrong. Whatever, if you love the F3, it's still
current, parts are still available, and so it's discontinuation is
self-evidently not something anybody has to worry about yet.

- --Mike