Leica 'fighting for its life"

<a href="http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=

8528242">This story</a>recently appeared on Reuters. One worrying aspect,

if you're concerned about the survival of the company, is that the two major

investors, ACM and Hermes, state that so far they've seen no sign of a

strategy that would convince them to inject more cash/buy more shares.

capa used a contax

Capa started with a Leica and switched to Contax. He also shot a lot with the Rolleiflex

 

feli

"With digital photography, a new form of market behaviour emerged that until then was only known to the computer industry. That means short product cycles and faster price depreciation, which is a very hard environment for Leica," he says."

 

Ridiculous. Leica isn't competing against fast product cycles and depreciation, it's competing against smarter CEOs with smarter engineers and real-world (not German) bankers.

 

If Canon made a Leica-rebranded, Leica-lensed- and-tweaked G6, every one of us would already have owned one for a year.

What's a G6?

<i>"With digital photography, a new form of market behaviour emerged that until then was only known to the computer industry. That means short product cycles and faster price depreciation, which is a very hard environment for Leica"</i>

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This is just ignorance and excuses. If Cross or Parker had wanted to say the same thing to justify poor performance after the introduction of ballpoint pens, they could have done so and the same gullible investors would have bought the story. The fact is, neither the computer industry nor digital photo technology invented this problem. Leica's in trouble not because of a change in the market, but because of bad management. If this were not the case, Voigtlander would not exist.

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Analysts do the firm no favors by blaming digital technology (or or "commoditization", or "margin pressure", or sunspots) instead of pressuring Leica to fire its executive team and get a better one which understands how to play the hand Leica has and make money with it.

I'm waiting for the phone to ring. I'll be more than happy to help lead them back on the One True Path if they'd like me to. I'll even bring my own translator, Claudia, a fluent German speaker from Karlsruhe. It pays to stay really friendly with ex-wives. Hell, maybe they're reading this now ;-) All they gotta do is ask!

Al for CEO !!!

Mr. Cohn has since gone back to the furniture business from whence he came. <a href="http://www.vitra.com/about/default.asp?lang=us_us" target="_blank">No digital ghosts to haunt him there.</a>

>"With digital photography, a new form of market behavior emerged that >until then was only known to the computer industry. That means short >product cycles and faster price depreciation, which is a very hard >environment for Leica"

 

This is correct. Margins in the high tech sectors are razor thin and companies spend an enormous amount of capital on R&D and facilities. Just the cost of the equipment needed to manufacture chips, costs more than all of what Leica is worth.

 

Obviously they blew it and didn't see the hand writing on the wall, but at the same time they had to wait till the components needed for digital cameras became commodity items and not just custom, in-house developed technology, which is not only extremely expensive, but requires skills that Leica hardly has.

Leica lens will survive but camera will not. Either the whole company to be sold to Panasonic or Leica concentrates on lens business only. Even if the whole Leica to be sold to Panasonic, Panasonic will keep the Leica brand, especially for the lenses. Leica probably ends up in Japanese digital body (by Panasonic) and German glass lens (by Leica).

I'm sure this has all been rehahed here a million times....but I'm new to the discussion.

 

It seems to me that Leica's niche in today's market is for a bullet-proof completely mechanical film based rangefinder system with great optics.

 

Thus, no M7. Just a pure mechanical camera of high precision. They've got the tooling; no R&D needed. Seems there should be a market.

 

What am I missing?

Thanks for the article, Paul.

 

IMHO, Leica's problems are pretty straight forward. In the supply:demand equation, demand has dried up. Demand is still there in the second hand market, but not in the new equipment market. Until they have a product that people want & at a price they're willing to pay, their raison d'etre has vanished. The numbers speak for themselves.

 

Digital is clearly part of the problem as it has been for all film & equipment manufacturers. When the best they can come up with is to raise prices & offer a la carte, management is also clearly part of the problem as well.

 

Bill

In a way, Leica's woes, and the long drawn out death of the German photographic industry is a reflection of a big flaw in the mindset of mechanical designers (Konstrukteure) in Germany.

 

I'm myself being trained as one at a German technical university, and two years ago I had a design project with a Zeiss designer as a supervisor. A comment he once made to me was very revealing. "What's the point of having lots of electronics in a device like this? Mechnical elements are simple, elegant and easy to manufacture." There's no doubt where he's coming from.

 

Problem is, the R&D departments of lots of German companies are staffed with people like this. Typically, they take tremendous pride in the way they cleverly arrange mechnical elements. That, in a time when precision engineering is incresingly transistorized, servorized, and software-rized.

 

The boyfriend of a friend of mine works for Leica Microsystems developing next-generation microscopes. He has a Ph.D in Physics. Guess what? He shuns digital photography. Shoots only film. When I asked him about digital, his reaction was mostly, "Bah!"

But this isn't a German thing, is it? Practically every major brand, whether

European or America, has moved to offshore manufacturing. Levi's, most

Fenders, Bass Weejuns, Converse... we live in an era of near-zero inflation,

which means most companies have to cut production costs or go to the wall.

<p>Also, floating off the camera and camera lens arm seems to have cut out a

lot of potential for diversification and cross-pollination. The Zeiss lenses,

according to their company, derived from cine lens technology, so

presumably additional R&D was minimal. It;s always possible that if Leica is

bought by the right company, the brand will become better-known than it is

now.

This day has been fast approaching for Leica for the last couple years, the bottom line as I see it is that the quietness and image quality photographers want are not that much better with a film Leica, and a quality digicam, therefore it's difficult to get them to fork over several thousand dollars for a yesterday's technology camera and a 50 mm lens, no matter how good it is.

 

Leica will soon rip with the other companies that refused to recognize the future and adapt. Leica may survive as a much smaller niche company catering to people with really thick wallets looking for status symbols. (Oh wait, it's already happened.)

This is a unique marking issue that has a company on the ropes because they failed to

aggressively promote their own strengths and solicit like companies to join them in

resisting the digital onslaught.

 

Imagine if you will, a conglomerate communication effort by Leica, Contax, Hasselblad,

kodak, Illford, Agfa and Fuji and all the other film based companies, that had aggressively

promoted the virtues of film based photography, without precluding digital.

 

In addition to extolling the virtues, imagine if a group effort had been mounted and

technologies shared to make it easier for the hobbyist consumer to engage in film

processing linked to digital output. With that option, I wonder how many involved

photographers that defected would instead still be shooting film?

 

Imagine a modern, computer controlled film processing unit for C41 & E6 type films not

unlike a desktop printer.... made as easy to use as a Coffee pot. Imagine a Leica or Zeiss

equipped film scanner that swiftly did a whole roll and made the same type basic

corrections a lab would make. The technology exists, it's just scattered all over these

different companies... all of which struggled, are struggling with, or are victims of the

digital age.

 

Who would be the market for these products? Me for one. Instead of dropping $100,000 in

digital equipment, I'd still be exclusively shooting film. I know a zillion other

photographers that would be there with me.

Yeah, and if Olivetti and Remington had made a great campaign in favor of typewriters we would all still own one. I think that digital has come to stay, BUT, I also think that once sensors get to full-frame 12,000,000 pixels range for cheaper prices (give or take a few pixels) Leica won't have to keep trying to compete with big Japanese Corporations but rather just buy sensors from someone and concentrate in selling their great bodies and lenses. I think that then someone will buy a camera thinking on using it for years and not months. What do you think?

but at $4600 a copy only but the wealthiest devotees will afford. Prices notwithstanding , most pros need the fast sync speed and the longer lenses and would be compelled to pass in favor of the Canons and Nikons. Leica would remain the Lambogini with incremental sales at best. For the survival of the company a good first step. However, in order to power up it cannot sidestep the pricing issues.

Regarding Marc's conglomeration idea, two or three of the above companies have (had)

the technology base, expertise and resources to make such a home-microlab solo - i's

hardly a new idea. Sure, it's technically possible, but would be at a great cost to buyers in

terms of accuracy, control and reliability, especially factoring in the relatively small market

size, and the issue of consumables. It wouldn't make a dent in the growth of digital, and

the elimination/redeployment of resources that were once part of the film-based industry.

And not that the silver-based print aficionados are a big market, but it does not address

that as well. Film is a medium that had it's glory, but the meteoric rise in sensor/digital

technology is growing exponentially - it won't be long until most everyone is happy.

 

Yes, leica gambled with poor management and myopic vision, but even if they wanted to

jump into digital in a big way years ago, they were hardly resourced properly to do so.

Also, with respect to the above about what leica could have done, there's a lot more to

know about resourcing and executing large technology-based developments timely than

just saying it's possible.

I suppose you have to ask whether Leica (or Zeiss) or any of the 'luxury' makers ever really went after the casual 'mom and pop' snapshooters that are the focus of digital marketing. The average person was not the major revenue source for the company. People who find plastic bodies, loose tolerances and mediocre results as 'acceptable' will NEVER see why anyone would invest in a Leica in the first place...'Yep, I have the JoeBlow 35mm Point and shoot...does everything *I* want it to do!' They are really two different markets.

The M6 sold well at $2000 per body. Leica needs to get back to that price level to survive. MP & M7 are just too high. The automation in the M7 was done widely in the 80's by every other camera maker. Remeber the Nikkormat EL of the early 70's or the Spotmatic ES? Why did it take them 33 years to bring it out in the M7?

 

Maybe the best thing for Leica to do is to go belly up and re-organize itself.

<i>'Yep, I have the JoeBlow 35mm Point and shoot...</i>

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Joe actually has some great pics....<a href="http://www.photo.net/bboard/q-and-a-fetch-msg?msg_id=00CDty"> <u>Joe Blows pics.</u></a>

If the Euro and the dollar were at parity, and the US prices of new Leica equipment were a third lower than they are right now, would Leica's survival be at issue? (This is not a rhetorical question. I really don't know the answer.)

 

Does Cosina Voigtlander make a profit offering lenses that are, by many accounts, close in quality to Leica's prior generation of lenses and therefore adequate for handheld photograpy, but priced at a small fraction of new Leica gear? (Again, not a rhetorical question. Is CV profitable or is it Mr. Kobayashi's hobby-horse?)

 

There is no shortage of people who can afford a new Leica and no shortage of people who want one. Problem is, they are not usually the same people. Is Leica management doing all it can to cater to the intersection of these sets? For example, is there a special marketing program for PJ-style wedding photographers?

 

The original Leica was Barnack's solution to his own inability to lug large-format equipment on his country outings. Has Leica strayed too far from the balance that always has to be struck between portability and quality?

 

Unlike a fountain pen or mechanical watch, which can be used by any idiot who can sign his name or tell time respectively, a mechanical camera requires skill to operate and great skill to show an advantage over its automatic rivals. Should -- and could -- Leica do more to promote the hobby of photography? (I bought a Focomat enlarger after attending a 1-day Leica darkroom seminar.)

 

Just some food for thought.

Olivetti and Remington? Poor analogy. Film has its own characteristics that many still feel

are superior as an end result not as a process. Typewriters didn't have that. But as an end

result the written word and images on a page are still a sound alternative to the computer

screen... just walk into a Borders and see. Film could be a sound alternative IF it could be

made to compete in terms of convenience and some immediacy.

 

Here's the solution I would buy in a heart beat, even if it was $6000... which is $2000. less

than a Canon 1DsMKII body.

 

The Leica branded 35mm to 6X9 film processor and scanner: put film roll in the automatic

feeder, Pour in the premixed chemicals, set type of film, program in the ISO, dial in push-

pull option, decide if you want it scanned also (requires firewire to computer), then go

watch TV. Scanner is an Imacon invention, scanning lens is Leica ASPH, Kodak and JOBO

engineered the film processor using super accurate computer temp and feed controls.

 

Oh, and it makes coffee too !! LOL<div></div>