Leica 'fighting for its life"

[lawrence_bochkis]

umm....have any of you actually looked at Vuk's website?

He's got some very impressive shots....try to judge them on their merit, rather than how much you like them.

 

Anyway, the comparison has been made that Leicas are like Porsches or Ferarris. While a good analogy in some ways, it isn't in others.

 

Porsche has had some of the same problems that Leica has had in the last several years, and has almost gone bankrupt several times, due to dropping sales, high costs, etc. Also they are an independant manufacturer, more or less like Leica.

They have been making a concious decision to keep their prices high, even though they are able to lower them. Their consultants and investors were asking them to lower prices so their sales would increase....they responded that they could lower their prices by as much as 25% and still remain profitable, but then the Cache of the brand would not be as high.

It's an interesting argument....if we lower prices, we'll sell more, but then our brand won't be what it was, so our prices may suffer in the future.

As everone knows, in non-commodity products, it's the brand that counts, not the product itself. So Porsche is keeping their brand identity in the high end, rather than competing with BMW and even Ford. Ultimately, it may be a good strategy, but is first of all a very wait and see approach, and also does not solve the problem of lower sales.

However, they decided that some firm restructuring of their product line was in order. Firstly, several years ago they introduced the "poorman's Porsche," the boxter. It has sold tremendously well, and has not eroded the brand as much as many Porschephiles swore it would.

Then, they introduced the Cayenne. It was, to many Porsche lovers a travesty and a tragedy. It is in fact a totally asinine concept (in my opinion) but it has brought a lot of money to the company, and has a lot of possibilities of development.

Porsche's problems are far from solved, but they've approached things from a good angle, and are reaping rewards.

 

As for Ferarri, they have the luxury of totally not giving a rat's rear about anything and anybody. They do not sell cars on credit, they do not sell to random walk-ins, and they couldn't care less if you want one or not. They know that you love Ferarris, and they know that you will buy Ferarri liscensed model cars, steering wheels and baseball caps. They make an enormous amount of money from the merchandise, and I have seen quite a few figures indicating that their merchandise and liscensing sales account for 80% of their profits.

 

There are two mitigating circumstances with Ferarri that make it a company unlike any other....Firstly, they make some awesome awesome cars, and everybody knows this, with or without marketing.

Secondly, is the Schumacher factor. Ferarri spends around $600 million dollars a year on their F-1 program every year, and it is absolutely moeny well spent. Only Toyota spends more as a rule (1 billion each year for the last three years) but Ferarri is the one who reaps the rewards, because they win (until recently) all the races, and they have sweet cars.

 

There is no Formula One racing equivalent in the camera world. The Schumacher factor could not therefore translate to the Salgado factor, and the H.C.Bresson factor has largely expired like 10 year old chromes.

 

I'll leave the business conclusions for others to make, but I feel that there is a call for Leica to be a bit more....ingenious in their development and marketing, using their weaknesses as strengths. Afterall, they make some screaming good gear, they just don't sell enough of it.

 

By the way, anybody that says that Leica makes "crappy" cameras either has a chip on his shoulder caused by some inappropriate touching in their childhood, or is a simple fool. Their cameras are however very expensive to sell like they want them to.

 

I for one would like to see Leica offering much more subsidized intro packs to students. They could offer cameras at or below cost to serious students, in return for a yearly commitment of, say 10 great photos from their portfolio. They would gain lifelong customers, as well as free promotional photos that would illustrate tha capabilites and capacities of Leicas and their users in the 21st century. Limited edition prints etc. could follow.....

[eliot_rosen1]

There seem to be two schools of thought about the M-line, both of which are reflected in Leicas product development. One is they need to introduce new features and technology more rapidly, which is not to say that they have to keep up with the Japanese makers (because they cannot do that), just not take so long to introduce womething basic Leica the M7. I agree with Bill Marshall in this regard, the M7 could have been done many years earlier and then improved upon.

 

The second approach is to go back to basics and only produce mechanical rangefinder which is what Leica was originally all about. This retro approach seems to be reflected (at least in part) by the introduction of the MP, which never seemed logical to me, because it is basically a gussied up M6 with different shaped (and less functional) knobs and levers.

 

I think management was trying to hedge its bets and failed. But I think the best approach would be to continue to improve the M7 camera's functionality at regular intervals and at the same time introduce the digital M because it WILL be attractive to anyone who is heavily invested in Leica lenses but also wants to get into digital and take advantage of his previous investment.

 

To me, there is no sense for Leica to try to compete with the used market for it's own products. Anyone who wants a superb all mechanical rangefinder built like a tank can buy a used Leica M2-M3-M4; there is no shortage, nor will there be any time soon. I say give the people something new.

 

They have upgraded most of their lenses to offer a new higher standard in lens performance, why not the same with the camera.

[eliot_rosen1]

?? Peter, I'd respond if I had any idea what you were trying to say. :-)