[BigMackCam]

Well, that's right. And in that case, customers are brain washed and fooled into believing that a full frame camera is worth $3000, because it's not.

With respect, I think customers deserve rather more credit than you're giving them. I don't believe they're brain-washed, nor that they're so easily fooled. Most enthusiast and professional photographers will have carried out a good deal of research before buying an expensive product, and they'll only buy if they're fairly confident the investment is justified.

A full frame camera may not be worth $3,000 to you, but if people are buying it at that price, that's what it's worth to them. Whatever price the manufacturer might originally set, the market will drive it down to the level where it represents reasonable value for money to a majority of potential buyers...

[biz-engineer]

they'll only buy if they're fairly confident the investment is justified.

Customers have unfortunately no choice because all camera makers more of less agree to where to set the price bar. No one of camera makers break their tacite agreement with colleagues of the Tokyo camera business network: when Canon drop the price on a model, they voluntarily cripple that model, e.g Canon EOS RP. We definitely need a Chinese companies to make cheaper camera system and attack that Japanese camera Keiretsu. For me , a fair price for apsc flagship would be $495, fair price for full frame 50 Mega pixel at $995, and medium format camera body at $2450. I believe if they followed my prices, the camera market would grow again.

[BigMackCam]

Customers have unfortunately no choice because all camera makers more of less agree to where to set the price bar. No one of camera makers break the tacite rule: when Canon drop the price on a model, they voluntarily cripple that model, e.g Canon EOS RP.

But they do have a choice... Either they ante up for the latest model because they believe it's worth the investment, or they buy a discontinued or used model that's more affordable, or - assuming they already have equipment - stick with what they already have. The more folks that buy discontinued / used or keep using their existing gear, the fewer sales of the latest model - so the manufacturer reduces the price, and keeps doing so until the level of sales increases to a point where the balance of volumes and profit margin are paying back the R&D plus production costs, and making the manufacturer a (hopefully) healthy profit. Because that's what this is about, when all's said and done... profit. The manufacturers aren't producing equipment for our benefit - they're businesses, and the whole point is to make as much money as possible...

[biz-engineer]

so the manufacturer reduces the price, and keeps doing so until the level of sales increases to a point where the balance of volumes and profit margin are paying back the R&D plus production costs, and making the manufacturer a (hopefully) healthy profit.

Absolutely, that's the equilibrium of the supply / demand curve. The problem is how do they know where that curve is if they haven't tried to drop prices. Of course keeping prices high is on the safe side, because once prices are dropped it's hard to increase prices again without triggering drop in sales volumes. So to me it looks like all camera brands are playing safe by fear that if they drop prices there is a risk that it would make them go to bankruptcy. My all point is that when free competition works , some player are forced to exit, and I don't see that with cameras, I only see crazy prices that repels me to buy any cameras. I look at the prices of Canon new lenses, I read $3000 for a FF lens, I don't even bother read futher to product spec! I guess I'm not the only one that turn around when reading $3000 for a lens, which means, they are missing a big part of the market (all the folk who would eventually buy if the price was more decent). For most people in Europe and US, $3000 is more than one month of paie, for a camera lens! guess why people will use their smartphone to take pictures.

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Last edited by biz-engineer; 10-28-2019 at 05:13 AM.

[Serkevan]

Customers have unfortunately no choice because all camera makers more of less agree to where to set the price bar. No one of camera makers break their tacite agreement with colleagues of the Tokyo camera business network: when Canon drop the price on a model, they voluntarily cripple that model, e.g Canon EOS RP. We definitely need a Chinese companies to make cheaper camera system and attack that Japanese camera Keiretsu.

Chinese companies charge $800 for phones that break apart in a year and has as "selling point" an alrighty camera, so that's barely more than a dream... they are exactly like everyone else.

For me , a fair price for apsc flagship would be $495, fair price for full frame 50 Mega pixel at $995, and medium format camera body at $2450. I believe if they followed my prices, the camera market would grow again.

Those prices are not gonna happen, it's logistically impossible to make the production lines lean enough that they can survive the drop in profit per unit. If a company were to do that, their fixed costs would have to be lowered massively, so... do they go for a lot of layoffs and other restructuring taken in a very risky bid? How many units would they have to sell for those prices to be profitable? What about the lenses?

To be clear: I'm not saying that photo gear is reasonably priced, I'm just not very optimistic about these changes happening.

[biz-engineer]

Those prices are not gonna happen

Well, the Canon EOS M100 is priced below $500 with a kit lens included. Several of my friends have bought one, and I saw a tourist with one last week end. But now, all new models are more expensive than the M100 kit. Those kind of customers who were happy to afford the M100 won't be able to afford the next model, they'll either keep using their M100 until it dies and then use their phone.

[Rondec]

Chinese companies charge $800 for phones that break apart in a year and has as "selling point" an alrighty camera, so that's barely more than a dream... they are exactly like everyone else.





Those prices are not gonna happen, it's logistically impossible to make the production lines lean enough that they can survive the drop in profit per unit. If a company were to do that, their fixed costs would have to be lowered massively, so... do they go for a lot of layoffs and other restructuring taken in a very risky bid? How many units would they have to sell for those prices to be profitable? What about the lenses?

To be clear: I'm not saying that photo gear is reasonably priced, I'm just not very optimistic about these changes happening.

But of course, we have heard that Huawei phones produce equivalent photos to APS-C cameras.

To the whole subject, I think that it is actually amazing how much camera you can get for your money these days. The only people being gouged are the people who "need" top end frame rates and video performance. If, like most of us, you can get by 4 to 5 fps and HD video, there are an awful lot of cameras that will give you wonderful still images for under 1500 dollars, particularly if you are willing to buy used gear.

It is true that medium format gear still is in the stratosphere and likely will stay there for a long time to come, but full frame and under cameras offer a lot of bang for your buck.

[Serkevan]

Well, the Canon EOS M100 is priced below $500 with a kit lens included. Several of my friends have bought one, and I saw a tourist with one last week end. But now, all new models are more expensive than the M100 kit. Those kind of customers who were happy to afford the M100 won't be able to afford the next model, they'll either keep using their M100 until it dies and then use their phone.

The M100 is the lowest-level MILC in Canon's lineup, isn't it? You have the M200 for $550 nowadays.
The EOS M6 however, is ~$1100 with viewfinder and kit lens, and that's the closest you'll get to a "flagship" in EF-M territory.

---------- Post added 10-28-19 at 05:43 AM ----------

But of course, we have heard that Huawei phones produce equivalent photos to APS-C cameras.

To the whole subject, I think that it is actually amazing how much camera you can get for your money these days. The only people being gouged are the people who "need" top end frame rates and video performance. If, like most of us, you can get by 4 to 5 fps and HD video, there are an awful lot of cameras that will give you wonderful still images for under 1500 dollars, particularly if you are willing to buy used gear.

It is true that medium format gear still is in the stratosphere and likely will stay there for a long time to come, but full frame and under cameras offer a lot of bang for your buck.

*Laughs in 900€ K-1 with under 2k shutter count.

Absolutely! What's ridiculously expensive is the feature set needed (or, rather, wanted? Demanded?) by specific types of photographers who require super high frame rate or similarly-price bonuses. If those people want to pay double to go from 5 to 10 fps while losing ultimate IQ, well, it's on them. I'm not gonna stop them...

[photoptimist]

Absolutely, that's the equilibrium of the supply / demand curve. The problem is how do they know where that curve is if they haven't tried to drop prices. Of course keeping prices high is on the safe side, because once prices are dropped it's hard to increase prices again without triggering drop in sales volumes. So to me it looks like all camera brands are playing safe by fear that if they drop prices there is a risk that it would make them go to bankruptcy. My all point is that when free competition works , some player are forced to exit, and I don't see that with cameras, I only see crazy prices that repels me to buy any cameras. I look at the prices of Canon new lenses, I read $3000 for a FF lens, I don't even bother read futher to product spec! I guess I'm not the only one that turn around when reading $3000 for a lens, which means, they are missing a big part of the market (all the folk who would eventually buy if the price was more decent). For most people in Europe and US, $3000 is more than one month of paie, for a camera lens! guess why people will use their smartphone to take pictures.

The camera makers surely do know the shape of the demand curve from the dozens of manufacturer or retailer promotional activities that happen every year around the world. Moreover, the price elasticity of demand for cameras probably does not vary much over time so a maker's older data on how volumes of older products sold as the price dropped would provide a good estimate of this.

Free market competition only eliminates players if the competing products are fully interchangeable commodities such as diesel fuel. If the Sony A9 were identical to the Canon 1DX is every way, then buyers would decide on price, the makers would cut the price to the bone, and less efficient makers would eventually be force to withdraw. But if some photographers want a small FF camera, then Sony wins and can charge what it wants to. And if other photographers want a big camera, then Canon wins and can charge what it wants to. There are literally dozens of dimensions that divide the makers and models (resolution, FPS, IQ, button layout, AF performance, video performance, physical ergonomics, menu design, water resistance, body robustness, storage media, color, lens portfolio, accessories, etc. ) Price really is one of the less important competitive dimensions for highly differentiated products.

BigMackCam is right, the discontinued/used market for bodies and lenses is also a strong source of price competition. Moreover, the fact that cameras and lenses are not consumables means that customers don't have to buy a new camera or lens every time they want to take another picture (unlike the necessity of buying more electricity every time one wants more light). The point is that brand new cameras and lenses must compete with all the existing cameras and lenses that photographers already have in their hands. A big part of the ongoing slump in sales (especially on DSLR side) is because photographers are seeing less and less reason to upgrade.

[BigMackCam]

Absolutely, that's the equilibrium of the supply / demand curve. The problem is how do they know where that curve is if they haven't tried to drop prices. Of course keeping prices high is on the safe side, because once prices are dropped it's hard to increase prices again without triggering drop in sales volumes. So to me it looks like all camera brands are playing safe by fear that if they drop prices there is a risk that it would make them go to bankruptcy. My all point is that when free competition works , some player are forced to exit, and I don't see that with cameras, I only see crazy prices that repels me to buy any cameras. I look at the prices of Canon new lenses, I read $3000 for a FF lens, I don't even bother read futher to product spec!

That $3,000 isn't just a figure the manufacturers plucked out of the air... They haven't said, "Hey, let's see if these suckers will pay $3,000 for this item that cost us $100 to make". There'll be a detailed business model that takes into account the R&D costs (which will be more significant than most people think, even on relatively minor upgrades), tooling, manufacturing, distribution, servicing and support, dealer mark-up etc. It will also take into account the rather quick fall-off in sales once the initial buzz wears off and it becomes just another 1 - 2 year old product in a veritable sea of other options, and the need to discount gradually in order to maintain enough sales that continued production is justified. The business model will forecast out from the day R&D begins to the end of the product's intended commercial life. As such, the price at release date probably is considerably inflated compared to the average unit cost across the commercial lifecycle, but that has to offset the heavily deflated price towards the product's end of life, which might be 30-40% lower than the release price.

Like you, I switch off when I see cameras and lenses at these higher prices. I can't justify that kind of spending for a hobby - it would be extravagance in the extreme. But that's our problem, not the manufacturers'. I don't know about you, but I have the same problem with cars. I'd love an $80k Jaguar. But I'd have to sell a kidney or two to buy one. So I buy a cheaper car that's within my means instead. That's my problem, not Jaguar's

If manufacturers could produce and sell the products we want for considerably less and sell enough units such that their overall profits were higher, you can be certain they would.

I understand your point about testing price drops, but I think they're doing that every time there's a discount event. I've absolutely no doubt they harvest sales figures for every single day of the year, including those where dealers have been authorised to reduce prices by a certain amount. Those figures will feed into the business model to keep profits on track.

I also think that pricing products too low at release is a very dangerous thing to do - partly for the reason you mention, i.e. it's difficult to successfully raise the price of the product after launch (although we've seen this happen - for instance, after the disaster in Japan that impacted production costs for components). But it also sets a precedent for every other product of the same type to be cheaper in future. And it leaves little wriggle-room on pricing if sales aren't as forecast.

But this is all conjecture. All we can be sure of is, there's a very good reason why the gear is priced at the given levels. It's not just because the manufacturers think they can get away with it...

[Serkevan]

R&D costs (which will be more significant than most people think, even on relatively minor upgrades)

Hear hear. I work in R&D (okay, PhD degree, but since my main topic involves production upscaling...) and even as a more or less one-person team focused on this project, the amount of money is needed for experiments and equipment is higher than my salary. Heck, if I was billed for the use of the in-campus electron microscope (external users are charged something like 50€/h from what I've heard), I would spend something like 10 or 15 thousand euros per year, just for using ONE machine.
Not to mention the last time I discovered a critical structural weakness in two of my reactor prototypes it was because it almost cracked in half. I managed to fix and reinforce one of the two units, but obviously there had to be a redesign. It took me a week of basically not leaving the computer to fix the design, plus months of waiting for it to actually be constructed. Add the manufacturing costs and the material for the thing and you end up with another couple thousand euros just to deal with one mistake.

[BigMackCam]

For me , a fair price for apsc flagship would be $495, fair price for full frame 50 Mega pixel at $995, and medium format camera body at $2450. I believe if they followed my prices, the camera market would grow again.

I'm sorry to break the disappointing news, but there's just no way a company could design, build, distribute and support a flagship-level APS-C camera and market it at a price of $495 including dealer mark-up. Not only would there be zero profit in that, I strongly suspect they'd lose money on every unit... In which case, growth in sales wouldn't matter. They'd go bust within months

I'm sure the manufacturers would define "fair price" very differently. Exactly how, I don't know, but I expect a key part of that definition would involve economic viability and profitability...

[Serkevan]

Like you, I switch off when I see cameras and lenses at these higher prices. I can't justify that kind of spending for a hobby - it would be extravagance in the extreme.

I understand the feeling, I had to be convinced that it was okay to upgrade my (at the time) 5 and a half year old gaming laptop, and even then I refused to spend more than 1000€ on a new one. I also refused to consider the possibility of spending more than 1000€ on a K-1 (luckily I found one slightly below that), and even thinking about the K-1 was only after I sought some additional income to cover it plus an used DFA 28-105 (1200€ for both has been, I believe, a great deal). If not, I would have kept the K-7 trucking along.

[BigMackCam]

Well, the Canon EOS M100 is priced below $500 with a kit lens included. Several of my friends have bought one, and I saw a tourist with one last week end. But now, all new models are more expensive than the M100 kit. Those kind of customers who were happy to afford the M100 won't be able to afford the next model, they'll either keep using their M100 until it dies and then use their phone.

... or buy a newer but discontinued or used replacement model. And if too many of them do that, Canon will notice the slump in sales and reduce the price of the new cameras until a balance is reached.

Gotta love market forces

[Winder]

Well, that's right. And in that case, customers are brain washed and fooled into believing that a full frame camera is worth $3000, because it's not.

Economics isn't your strength. You don't seem to understand that concepts like worth and value are subjective. Full frame may not be worth it to you and it might not have value to you, but that doesn't mean that FF doesn't have significant value or worth to other photographers. Other people are not brainwashed simply because you understand why they do what they do. There is a large world of people out there who are successful financially and they have the money to buy what they want even if it isn't what they need and I'm very grateful for that fact. When someone drops $5,000 of a package of wedding pictures, I understand that they didn't need any pictures, but they wanted pictures and they had the financial means to buy them. If people only bought what they needed and not what they wanted there would be practically no photography in the world.