[falconeye]

I am going to agree with you, the 36MP sensor in the D800 is purported to be the same EXMOR (Backlit CMOS) type Sony supplied for the K-5 and the D7000. Given that this type of sensors dynamic range expands almost linearly with ISO, and the K-5 peaks at just over 14 EV at 80 ISO I see no reason why the D800's wouldn't be able to come close to or even exceed 15 EV at 50 ISO!

1. The Exmor in K-5 or D800 aren't backlit.
2. A correct extrapolation (ISO80/50, FF/APSC) would yield 16.0 EV DR.
3. Extrapolations don't normally work, so I'd say 15+ EV.

OK...It means that Nikon's FF covers approx. 25% of all Nikon's sales (in quantity).

Oh boy, all these other numbers only added noise to the discussion.

I offer my initial post for a clean start:

Nikon FF (~420,000 bodies/y; 30k D800 + 5k D4/m + marginal numbers other models) is ~10% of all Nikon dSLR bodies (4.7 million bodies/y).

Units: 10%
Revenue: 30% (average price $3k rather than $1k)
Profit: 50%+ (excluding lenses)


These are simple numbers, easy to remember, we all can agree to and internalize before becoming emotional in our discussions again. And they clearly mean FF is no niche for the Nikon system camera business.

[jsherman999]

Nikon FF (~420,000 bodies/y; 30k D800 + 5k D4/m + marginal numbers other models) is ~10% of all Nikon dSLR bodies (4.7 million bodies/y).

Units: 10%
Revenue: 30% (average price $3k rather than $1k)
Profit: 50%+ (excluding lenses)


These are simple numbers, easy to remember, we all can agree to and internalize before becoming emotional in our discussions again. And they clearly mean FF is no niche for the Nikon system camera business.

You could also make the case that the existence and visibility of the FF lines drives aps-c sales as well, so there's an additional causal revenue stream there, although very hard (for us) to quantify.

Nike, Adidas, etc pay huge money to get their logo seen on athlete's feet, jerseys, warmups and headbands - Nikon/Canon gets similar exposure at the same events at a bargain rate in comparison.

.

[vespats]

@falconeye
nice that you (not) included development costs and so on in your calculation

Unfortunately some development costs are the same independent of how many "things" you sell.
So the whole development costs, tool costs, etc have to be carried by 30k users instead of 420k users.
This will cut the profit significantly.

Now assuming Pentax, having smaller numbers in general, does the same thing. Easily that can backfire with not making profit at all, especially as the Pentax users (aka "we") expect a reasonable price tag

Believe it or not. If it would be that easy to earn money with FF even Hoya would have done it immidiately

[falconeye]

You could also make the case...

Yes, but foremost, I wanted to move a fact out of the speculative region. Which is:

Nikon is now making more profit with FF bodies than APSC bodies.

Whatever else can be said, I wanted this single message to settle.

[mecrox]

Lol to all this. Panasonic recently said that they planned an ultra high-end m4/3 model to counter Canon entering the CSC market. The m4/3 camp moving upmarket and starting to involve Canon et al is far more of an immediate challenge for Pentax than worrying about FF.

Just think what this means: smaller, lighter kit with nearly the same image quality (and good enough for most buyers), cheaper second bodies for walkabouts and travel, less forbidding but still very capable and fairly stylish cameras for families and female buyers, fewer silly things left off for reasons that baffle even the fanbois (EVFs, tilt screens, etc.). A great way for Pentax to get into trouble is to concentrate on 2000-buck and over cameras before working out how and whether they can produce good-selling, profitable cameras for 1000 bucks and under. The new Canonikon FF cameras are packed with stupdendous amounts of software and high-tech, much of it for broadcast-level video. No company could hope to emulate this either quickly or without spending vast sums on R&D. At present, Pentax has very little of any of this in any camera they make.

Producing a basic FF body that can take a few pics but that's about all, in order to discourage a small number of your users from migrating upmarket, is really no answer when the prospect is haemorrhaging a hefty chunk of present users and even more potential users at the other end of the scale.

[falconeye]

The m4/3 camp moving upmarket and starting to involve Canon et al is far more of an immediate challenge for Pentax than worrying about FF.

That's one aspect, and FF the other.

Together they are slowly going to squeeze the life out of APSC SLRs. IMHO. Because APSC cannot escape upmarket.

This is why Pentax eventually has to do both: mirrorless and FF. But we know they are going to do the first. So here we can discuss the second aspect.

[_quicksilver_]

Lol to all this. Panasonic recently said that they planned an ultra high-end m4/3 model to counter Canon entering the CSC market. The m4/3 camp moving upmarket and starting to involve Canon et al is far more of an immediate challenge for Pentax than worrying about FF.

Ultra high-end m4/3??

[jsherman999]

Lol to all this. Panasonic recently said that they planned an ultra high-end m4/3 model to counter Canon entering the CSC market. The m4/3 camp moving upmarket and starting to involve Canon et al is far more of an immediate challenge for Pentax than worrying about FF.

Just think what this means: smaller, lighter kit with nearly the same image quality (and good enough for most buyers), cheaper second bodies for walkabouts and travel, less forbidding but still very capable and fairly stylish cameras for families and female buyers, fewer silly things left off for reasons that baffle even the fanbois (EVFs, tilt screens, etc.). A great way for Pentax to get into trouble is to concentrate on 2000-buck and over cameras before working out how and whether they can produce good-selling, profitable cameras for 1000 bucks and under.

.

Thank you for helping prove my point!

How does Pentax continue to sell K-mount lenses in that ^^ scenario at the same volume they sold in 2010?

If your answer is "Just innovate! Do something different than what everyone else is doing! Just innovate, duh!" ... I'd respond:

And this magical innovation, using the same tech level available to everyone and restricted to the asp-c price point and margin, is somehow easy?

.

[johnmflores]

Ultra high-end m4/3??

My friend is a working pro. Shoots Canon 1D IV. Just bought a Panasonic GX1 with the Olympus 45/1.8. Loves the camera. Very very impressed with the image quality. Has integrated it into his workflow.

Don't be so dismissive.

[mecrox]

Thank you for helping prove my point!

How does Pentax continue to sell K-mount lenses in that ^^ scenario at the same volume they sold in 2010?

If your answer is "Just innovate! Do something different than what everyone else is doing! Just innovate, duh!"

And this magical innovation, using the same tech level available to everyone and restricted to the asp-c price point and margin, is somehow easy?

.

What does easy have to do with it if it has to be done anyway? My own guess is that Pentax will have to go with the flow or be stranded, i.e. replace the K-mount with something allowing a much shorter registration distance and smaller lenses. And I don't mean the Q. If Falk is correct, the most suitable of the existing K-mount lenses can then be deployed into FF, eventually. What one can say is that doing nothing is unlikely to be an option - that is, expecting traditional APS-C DSLRs to go on paying the bills. Not many folks seem to think they will for much longer. Those folks may be wrong, but it is starting to look as if they are right.

[monochrome]

Yes, but foremost, I wanted to move a fact out of the speculative region. Which is:

Nikon is now making more profit with FF bodies than APSC bodies.

Whatever else can be said, I wanted this single message to settle.

Profit is a hazy concept. On a free cash flow basis Nikon might feel very good about their FF cameras. Yet on a cost-accounting basis, amortizing the R&D and development expenses, tooling and SG&A then "profit" in a Nikon FF camera might be much lower than we imagine.

The hard part is to understand how much previous research, tooling and other expense is considered "sunk cost," or fully amortized. Those "soft" costs need not be added in to the accounting cost of a new model; therefore the "profit" on a unit may be higher than we could know.

Cost/profit/pricing determinations are closely guarded secrets. We'll never know.

What we can safely surmise is that Pentax has a very steep hurdle to achieve profitability on a FF camera. Nikon and Canon have created a classic barrier to entry against competitors by exploiting their first-mover advantage. They are fragmenting the rather thin FF market by extending their ranges of FF bodies, dividing price points across various models and feature/benefit combinations, continuing to manufacture decently-selling older models (and perhaps earning outsized profits on them versus sunk costs) and thereby maintaining their dominant duopoly.

It really is the same as Procter & Gamble making 12 different kinds of TIDE detergent in several different sizes. A competitor with one or two sizes each of two formulations (K-r; K-01, K-5, FF) can't get enough volume to cover start-up costs versus all the TIDE "sub-brands" it competes against. Add in Cheer (also P&G) doing the same thing and just getting shelf space in a store becomes a challenge. That doesn't even consider volume-based wholesale pricing. Look at what has happened in B&M stores - that's why it happened. This is really an undergraduate level marketing study. There's nothing complex about this at all.

There really doesn't seem to be an easy answer for PRI unless Ricoh is willing to invest several hundreds of millions of dollars of losses, over several years, developing general brand identity and a FF market share. Clearly Hoya was not willing to make that investment. We'll see some of Ricoh's cards beginning quite soon - within 12 months I'd say. And I think we'll be surprised by what we see..

What does appear possible is that PRI will develop the Brand more competitively; some of that development might include a business decision to invest money in loss-making models that have transferable technology and brand identity benefits. Consdier that the K-01 might be a brand-identity move and it's apparent contradictions are more understandable!

In so many ways I am happy that I am not a brand manager or product manager for Pentax.

I still believe PRI has a plan to compete aggressively against Canon, who may be somewhat vulnerable to Pentax. And when someone sees "Pentax" they either think camera or nothing. They don't think Television. Nikon, however, is an entirely different breed of cat.

Be of good cheer, Pentaxians. Ricoh has a plan and you will be happy.

[_quicksilver_]

My friend is a working pro. Shoots Canon 1D IV. Just bought a Panasonic GX1 with the Olympus 45/1.8. Loves the camera. Very very impressed with the image quality. Has integrated it into his workflow.

Don't be so dismissive.

No, I´m not dismissive at all, I know that these cameras are good, -I was just laughing at the the words Ultra high-end. What does it mean? Higher than everything else?

[mecrox]

Lol, you're quite right. The precise words were "I want Panasonic to be known for very high-quality cameras, and we are currently restructuring the range of products that we offer to include a very high-end model" - Ichiro Kitao, director of Panasonic's digital stills camera business, quoted in an interview. Could be laughter all the way to the bank.

[falconeye]

on a cost-accounting basis, amortizing the R&D and development expenses, tooling and SG&A then "profit" in a Nikon FF camera might be much lower than we imagine.

That's not helping much to get my message across, so here it is again ...

Nikon is now making more profit with FF bodies than APSC bodies.

Morever, I disagree with your speculative disclaimer. The D800 basically uses the D700 body which is already amortized and just puts a new sensor, much like what Pentax did with the K-7 when creating the K-5. Still a huge success. And R&D isn't that expensive, look at 645D and the low revenue (in comparison) it creates. And it still pays off. We're talking billions revenue vs. millions R&D and maybe tens of millions tooling. They don't even spend money to promote it, no dealer margins etc. It's going to sell by itself.

If we are honest, we have to admit that Nikon is going to collect the rewards on their earlier investments into FF. And they deserve it.

[jsherman999]

What does easy have to do with it if it has to be done anyway? My own guess is that Pentax will have to go with the flow or be stranded, i.e. replace the K-mount with something allowing a much shorter registration distance and smaller lenses. And I don't mean the Q. If Falk is correct, the most suitable of the existing K-mount lenses can then be deployed into FF, eventually. What one can say is that doing nothing is unlikely to be an option - that is, expecting traditional APS-C DSLRs to go on paying the bills. Not many folks seem to think they will for much longer. Those folks may be wrong, but it is starting to look as if they are right.

It sounds like you're actually moving toward the same conclusion/fear several of us have - that K-mount may be in trouble because of the aps-c DSLR tier being encroached by mirrorless (basically). It's going to be hard to sell K-mount lenses in this new world if your only K-mount delivery product is being pressured out. FF offers a stable, high-margin channel for K-mount, and can share almost all of the R&D with aps-c.

Of course, if it's Ricoh's intention of phasing out K-mount, they have other options other than FF. But then, if they plan to do that, any aps-c shooter should be fully, 100% on board with a FF initiative as an alternative to them just dumping K-mount. "Don't bother with FF, concentrate on apsp-c DSLR!" is possibly a death sentence for K-mount. Might be a slow death, an atrophy, but the end result may be the same.

.