[stevebrot]

@stevebrot

'Projected 2018 revenue for Leica Camera was about € 365M (per Wikipedia).'

That's the turnover in the company's accounts. The consolidated turnover (i.e. including the turnover from subsidiaries) is a bit higher than €400m.

'I could not find revenue for Pentax Ricoh Imaging Co Ltd, though Ricoh proected 2018 revenue for its "Other" line of business at ~ € 2552M. How much of that is from imaging is hard to say. If even half, Leica appears to be somewhat smaller, revenue-wise.'

There is no such thing as Pentax Ricoh Imaging Co., Ltd any more, it was renamed Ricoh Imaging Co., Ltd years ago. It's included in Ricoh's Smart Vision division, itself part of the Other business segment.

You can find the turnover of Smart Vision in the quarterly presentation documents, the latest being https://www.ricoh.com/IR/data/pre/pdf/h31q3_1.pdf See page #10: April-December Smart Vision turnover is ¥13.6bn. Add the January-March turnover (¥4.5bn) and you'll obtain a turnover of ¥18.1bn for the whole 2018 year.

¥18.1bn, that's €139m. Hence what I wrote four posts before yours:


Please note these €139m are more than the turnover generated by Pentax-branded products since they also include the turnover generated by Ricoh-branded compact cameras, Ricoh rugged compact cameras and Theta products.

I stand corrected!

Back to the OP's original statements...the notion of "niche" is not a matter of revenue, but is defined by sales volume (low) and intended market segment (limited). Leica's volume (minus the Panasonic stuff and Huawei smartphones) is quite low, despite a healthy revenue estimate. One might ask, "When was the last time someone saw a Leica "in the wild" (any year, any model)?" Their dealer network in my region* is incredibly thin (three dealers only**, all in Seattle metro) despite a large potential market. Pentax is not much better(~6 dealers in Washington, Oregon, and Idaho combined) , though as a point of interest, two of the three Seattle dealers for Leica also sell Pentax. Apparently, the two companies have a similar market strategy, at least around here.

FWIW, while not common, it is not unusual to see a Pentax camera on the streets/trails in the Portland, Oregon area, though usually not recent models.


Steve

(...has never seen a Leica in the wild...ever...)

* Pacific Northwest of the U.S...the states of Washington, Oregon, and Idaho, though I am not sure Idaho appreciates the association

** Glaser's Camera, Kenmore Camera, and a Leica store in Bellevue

[Merv-O]

Nope - Leica's price for that type of camera would be $20,000.

Probably, I was talking about the 'price point' only--we're on the same page here...(6-8k is the Leica wheelhouse for their full frame models).

[Kunzite]

Probably, I was talking about the 'price point' only--we're on the same page here...(6-8k is the Leica wheelhouse for their full frame models).

I get that, but I wasn't talking about the 'price point' only. What you buy with the money is very, very important; and you can't even get a 35mm Leica for 645z money.

Anyway, I guess we both understand each other's points.

[Wheatfield]

Hello All,

I read often, on this and other forums, that Pentax is doomed because the brand is niche manufacturer, without enough revenues to sustain investments that would revamp the range.

This may be certainly true (not that it is doomed! I am talking about the revenues) but I wonder how the situation is, compared to Leica.

I never read Leica is doomed! but clearly it is a niche manufacturer, given the high price tag their camera have, however, their line-up is not limited to the M, and they have different lens mounts and sensor sizes, and I see frequent announcements of new items.

I wonder how the two brands compare in terms of revenues AND volume sales.

I tried to find out with Google, but wasn't able.

-G

There is a theory, I suspect it is rather North American centric, that if one isn't the biggest toad on the lily pad then only doom will follow. What this concept fails to recognize is that it is proven to be untrue. But it keeps being put forwards by people who are willing to ignore reality and propagate false narratives.
Obviously time will tell, but I would be more worried about the long term future of my chosen brand if I was the owner of one of the larger ones that has to maintain a larger infrastructure. No company is too large to fail, as we saw in spades with General Motors and Chrysler, both very big companies that would have failed had it not been for the largess of the public purse bailing them out.

---------- Post added 02-22-19 at 10:44 AM ----------

I agree.

My rear thought was, what if Pentax stepped up the quality of its offering, in order to have better margins?

Clearly, there are people willing to spend much more, for a little edge in quality.

What do you think the D FA* 50mm f1.4 represents? For that matter, what do you think the entire D FA* lens range represents?
These are top end products demanding a top line price.

---------- Post added 02-22-19 at 10:53 AM ----------

I was talking about paying Leica prices for Pentax (e.g. $5000 for a K-1 body only). Those stores are maintained from the much larger margins...

Leica has spent decades building a cult following of well heeled amateur users, and they have never strayed from that strategy. The average Leica user is a doctor or other well heeled individual with expensive tastes and a matching budget, not a working pro or amateur of modest means. One of the holes that Pentax dug themselves into was allowing themselves to become a budget brand for users who quite frankly were too cheap to be considered customers. When they put themselves in that position, they also put themselves into a nearly impossible to reverse poor cash flow and bad capital cost recovery situation.

[Kunzite]

Leica has spent decades building a cult following of well heeled amateur users, and they have never strayed from that strategy. The average Leica user is a doctor or other well heeled individual with expensive tastes and a matching budget, not a working pro or amateur of modest means. One of the holes that Pentax dug themselves into was allowing themselves to become a budget brand for users who quite frankly were too cheap to be considered customers. When they put themselves in that position, they also put themselves into a nearly impossible to reverse poor cash flow and bad capital cost recovery situation.

I remember Pentax trying - and failing - to be a budget brand.
It also stunted their development, as performance - the dreaded autofocus for example - is developed in higher margin, costlier products.

[Merv-O]

There is a theory, I suspect it is rather North American centric, that if one isn't the biggest toad on the lily pad then only doom will follow. What this concept fails to recognize is that it is proven to be untrue. But it keeps being put forwards by people who are willing to ignore reality and propagate false narratives.
Obviously time will tell, but I would be more worried about the long term future of my chosen brand if I was the owner of one of the larger ones that has to maintain a larger infrastructure. No company is too large to fail, as we saw in spades with General Motors and Chrysler, both very big companies that would have failed had it not been for the largess of the public purse bailing them out.

---------- Post added 02-22-19 at 10:44 AM ----------



What do you think the D FA* 50mm f1.4 represents? For that matter, what do you think the entire D FA* lens range represents?
These are top end products demanding a top line price.

---------- Post added 02-22-19 at 10:53 AM ----------



Leica has spent decades building a cult following of well heeled amateur users, and they have never strayed from that strategy. The average Leica user is a doctor or other well heeled individual with expensive tastes and a matching budget, not a working pro or amateur of modest means. One of the holes that Pentax dug themselves into was allowing themselves to become a budget brand for users who quite frankly were too cheap to be considered customers. When they put themselves in that position, they also put themselves into a nearly impossible to reverse poor cash flow and bad capital cost recovery situation.

Leica's "cult' following as you state arose out of an expensive old school technology. Leica builds hand-made rangefinder focusing systems in an age of EVFs and prism DSLRs. They use top end materials that sometimes are less durable than new computer chip based products. Pentax is hardly a discount line of cameras ($2,000 for an FF; 800-900 for a KP; entry model at 600-700 K-70, etc.)...Canon, Nikon, Sony, etc. all sell cheap lines of cameras (bridge models, point n shoots, etc.)
Note: Leica has a much larger distribution network (company stores around the world--after market sellers like Voigtlander and Zeiss, and hasn't been treated as a poor step-child to be sold every decade or two: Leica has been at the same place for 120 years, Pentax has been at ASAHI, Honeywell, Hoya & now RICOH--hardly a stable environment. Also, cameras have never been any of these companies primary businesses so Pentax is a curiosity. Ricoh doesn't try and kiosk or market well....that doesn't make the cameras low-end, it makes their advertising budget low-end.

[Kunzite]

Pentax has been at ASAHI, Honeywell, Hoya & now RICOH--hardly a stable environment.

That is ill-informed: there was Asahi Optical, which at some point started using the Pentax brand, at some point Asahi Optical changed their name to Pentax Corporation.
In 2007, Hoya managed a hostile takeover on Pentax Corporation; in 2011, they sold Pentax Imaging Systems to Ricoh.
That's all the ownership changes - 2 in total, the second a consequence of the first.

Honeywell never owned Pentax Corporation, or rather Asahi Optical as the Honeywell business happened well before Pentax Corporation. They were merely distributing Pentax products in the US, under their own name.

[Merv-O]

That is ill-informed: there was Asahi Optical, which at some point started using the Pentax brand, at some point Asahi Optical changed their name to Pentax Corporation.
In 2007, Hoya managed a hostile takeover on Pentax Corporation; in 2011, they sold Pentax Imaging Systems to Ricoh.
That's all the ownership changes - 2 in total, the second a consequence of the first.

Honeywell never owned Pentax Corporation, or rather Asahi Optical as the Honeywell business happened well before Pentax Corporation. They were merely distributing Pentax products in the US, under their own name.

Kunzite: Yes Honeywell 'marketed' Pentax--what does that tell you? Licensing the brand to Honeywell? Surprised Pentax didn't whore it out to Sears or Montgomery Ward. That was another kick to the curb. Hoya certainly shepherded Pentax into the Digital era, but then gave up. Period. You will agree Pentax has been kicked around and poorly marketed since ASAHI/Pentax in the 70's?

[Mistral75]

(...) Leica (...) hasn't been treated as a poor step-child to be sold every decade or two: Leica has been at the same place for 120 years, Pentax has been at ASAHI, Honeywell, Hoya & now RICOH--hardly a stable environment. (...)

The grass is always greener on the other side of the fence.

1. The Pentax trademark / brand has had two successive owners: Asahi Optical (renamed Pentax in 2002) from 1953 to 2007 and Hoya since 2007. Ricoh are a licensee since 2011.
   ------
2. In 1986, Ernst Leitz Wetzlar GmbH's various businesses were contributed to three separate companies, Leica Camera AG, Leica Microsystems GmbH and Leica Geosystems AG.
   
   In 1987, Wild Heerbrugg AG took over Ernst Leitz Wetzlar which subsequently became Wild Leitz Holding AG.
   
   in 1990 Wild Leitz Holding AG merged with The Cambridge Instrument Company plc and became Leica Holding B. V.
   
   In 1996 Leica Camera AG was spun off from Leica Holding B. V. through an IPO and became a listed company.
   
   In 2000 the French luxury group Hermès took a 31.5% stake in Leica Camera AG following a public offer and they subsequently raised their stake to 36%.
   
   In 2005 Leica Camera AG went almost bankrupt.
   
   In 2006 Andreas Kaufmann's family holding company ACM Projektentwicklung bought Hermes stake and, through a subsequent takeover offer, raised their stake to 96.5% in 2007. ACM Projektentwicklung invested tens of millions in Leica Camera AG to turn the company around. Leica Camera AG wasn't profitable until 2010.
   
   In 2011 the US private equity fund Blackstone bought a 44% stake in Leica from ACM Projektentwicklung. Leica Camera AG was delisted in 2012.

Who's been tossed left and right and kicked around more than the other? Pentax or Leica?

[monochrome]

What do you think the D FA* 50mm f1.4 represents? For that matter, what do you think the entire D FA* lens range represents?

<snip>One of the holes that Pentax dug themselves into was allowing themselves to become a budget brand for users who quite frankly were too cheap to be considered customers. When they put themselves in that position, they also put themselves into a nearly impossible to reverse poor cash flow and bad capital cost recovery situation.

I’ve written before that Hoya gutted the company of properties, patents and engineers, decimated the European and North American distribution network, liquidated the inventory of lenses into the US market at fire sale prices, ‘retired’ Jun Hirakawa because he wouldn’t compromise his design standards - then sold the empty husk for a few tens of millions of dollars.

Pentax didn’t ‘allow’ themselves to become anything. Hoya and Sparx behaved as corporate raiders who liquidated the lowest return assets - the camera company’s - with no regard for, well, anything other than maximizing the return on their leveraged investment.

[Gian]

The issue is not about us photographers: of course we want our toys to be affordable, so we like the Pentax price tag more than Leica's.
On the Company side, it's a matter of survival: no margins means no investments, no future.
Given that Pentax has the technical expertise to build top quality lenses and cameras, it should forget the lowest consumer market, mauled by smartphones.

About building brand image, why market the GRIII under the brand Ricoh?
To me, Ricoh = printers & copiers. The GRIII is an appraised camera, it deserves the top brand.

Last is Customer Care, an unknown concept chez Ricoh.
Here in Milano we have a Leica store, I don't own Leica, but I'm on their mailing list.
They organize frequent photo exhibits, workshops, conferences, where the focus is always on images, not on the tools you need to obtain them.

I appreciated the offer Pentax made to K1 owners to upgrade to K1-II (don't have one), because it showed concern.
But that is not enough, because Customers feel totally on their own, and to be able to talk about Pentax, their only resort is to access this wonderful forum.

[Wheatfield]

I’ve written before that Hoya gutted the company of properties, patents and engineers, decimated the European and North American distribution network, liquidated the inventory of lenses into the US market at fire sale prices, ‘retired’ Jun Hirakawa because he wouldn’t compromise his design standards - then sold the empty husk for a few tens of millions of dollars.

Pentax didn’t ‘allow’ themselves to become anything. Hoya and Sparx behaved as corporate raiders who liquidated the lowest return assets - the camera company’s - with no regard for, well, anything other than maximizing the return on their leveraged investment.

Pentax put themselves into the position of being dismantled by Sparx and Hoya with their policies starting in the 1980s. By the time Sparx got their hands on Pentax it was a done deal. It was just a matter of who the executioner would be.

[monochrome]

Pentax put themselves into the position of being dismantled by Sparx and Hoya with their policies starting in the 1980s. By the time Sparx got their hands on Pentax it was a done deal. It was just a matter of who the executioner would be.

It seems like they took the SMC royalty income for granted while they did other things. They certainly didn’t support dealers the way the other majors did.

[Wheatfield]

Leica's "cult' following as you state arose out of an expensive old school technology. Leica builds hand-made rangefinder focusing systems in an age of EVFs and prism DSLRs. They use top end materials that sometimes are less durable than new computer chip based products. Pentax is hardly a discount line of cameras ($2,000 for an FF; 800-900 for a KP; entry model at 600-700 K-70, etc.)...Canon, Nikon, Sony, etc. all sell cheap lines of cameras (bridge models, point n shoots, etc.)
Note: Leica has a much larger distribution network (company stores around the world--after market sellers like Voigtlander and Zeiss, and hasn't been treated as a poor step-child to be sold every decade or two: Leica has been at the same place for 120 years, Pentax has been at ASAHI, Honeywell, Hoya & now RICOH--hardly a stable environment. Also, cameras have never been any of these companies primary businesses so Pentax is a curiosity. Ricoh doesn't try and kiosk or market well....that doesn't make the cameras low-end, it makes their advertising budget low-end.

The only problem with what you are saying here is that it is not exactly correct, and that you are cherry picking timeframes to make points. Asahi Optical started making cameras to have something to put their lenses on. They called the expanded company Asahi Pentax. Honeywell was a distributor in the USA, nothing more. They were not corporate owners. In most of the world, Pentax was distributed by their own distribution chain. In Canada, for example, we had Pentax Canada Inc, a wholly owned subsidiary of Pentax Japan.
You are looking at Pentax since Ricoh started making equipment with the Pentax brand and are pretending that history started there with your pricing arguement. Go back to the 1980s and start there instead. Pentax was very much the brand for the person who wanted inexpensive equipment.
And yes, Leica has spent all of their time since the Korean War when photojournalists discovered Nikon while taking time off in Japan enticing well off amateurs into buying their equipment. Leica is very much a cult brand, or was until they diluted themselves with Japanese and now Chinese brands. My Huawei cell phone has the Leica name on it as part of the branding for the cameras that are in it.
The equipment is very good, but this doesn’t change what they are.

---------- Post added 02-24-19 at 11:24 AM ----------

It seems like they took the SMC royalty income for granted while they did other things. They certainly didn’t support dealers the way the other majors did.

This goes to the lack of cash flow they dealt themselves. Where I am, Pentax support was very good up until the Ricoh buyout of the camera division. In 2005 they managed to find me an F*200/4 Macro, and IIRC, in 2006 they managed to snag me a new A15/3.5. The Rep told me it was such a special order lens that it was built for me, as there was no inventory of them at Pentax Japan. I don’t know if this is true or not, but given how low volume that lens would have been in 2006 it is certainly believable.
With Ricoh at the helm, we have certainly seen an increase in quality, gone are the K5 days of camera literally falling apart in camera bags, but I think also an increase in pricing. Ricoh appears to be moving the brand upmarket.

[ffking]

About building brand image, why market the GRIII under the brand Ricoh?
To me, Ricoh = printers & copiers. The GRIII is an appraised camera, it deserves the top brand.

Thing is, it's about the only camera they now make (is you discount the theta) that was a Ricoh original - I think they want then prestige of keeping it that way, even with a lot of crossover tech between the brands