[Leica] Re: M8 price

[lrzeitlin at optonline.net (Lawrence Zeitlin)]

On Dec 21, 2008, at 9:10 AM, Jayanard wrote:

> Are you saying the demand for the M8 is price inelastic? My view is  
> that it
> may well be today, in the present economic climate, but at  
> introduction,
> when the Leica cachet would have sold easily, a lower price would have
> translated into a larger installed base by now.


The M8 may have well been priced as a Veblen good, a product whose  
high price enhances its perception in the marketplace. After all, the  
camera was introduced in the go, go year of 2006 when irrational  
exuberance was at its peak. Negative price elasticity is a  
fundamental  ploy in pricing luxury goods. Cosmetics manufacturers  
have long adhered to the mantra "it costs more but I'm worth it." A  
good friend of ours runs an art gallery specializing in French  
impressionist paintings. If a painting doesn't sell quickly, she  
marks up the price. A repeat visitor to the gallery, seeing the  
increase in price, is tempted to buy the painting as an investment.  
Sounds like the housing and securities market doesn't it? I wonder  
how the theory will hold in the current recession.

I'm with Jayanard in feeling that if Leica wanted to develop a  
digital camera which would simultaneously increase market share and  
be attractive to the advanced amateur photographers who own the vast  
majority of Leica cameras, they would have produced one at half the  
price. The advantage over the competition would have been the ability  
to use the legacy of Leica glass. Many of us who have almost  
abandoned film have a collection of Leica lenses gathering dust on a  
closet shelf. The cost of the tooling for the expensive optical and  
mechanical parts of the camera, the rangefinder and viewfinder, lens  
mount and linkages, must have been amortized years ago. After all,  
the M cameras are over 50 years old. Most of the other stuff is  
supplied by outside firms. When the Leica was introduced, it cost  
about a month's salary for the average worker. Right now a Leica and  
lens costs about 2 months salary. On the other hand, an equivalent  
specification Canon costs about half a month's salary. That's how to  
shrink a market.

I know that this is rehashing an old topic but the introduction of  
the Micro 4/3 cameras with Leica lens adapters gives us hope. It may  
well be that Leica and its partner, Panasonic, have a CL type digital  
in the works. Either that or the price of used M8s may soon drop to  
the $1500 level. Until then I will continue to use my Olympus DSLR. I  
can mount my excellent film SLR camera Olympus lenses on it.

Larry Z