[RobA_Oz]

I don't understand why Pentax (RIcoh) is wasting so much money in the same camera with few and poor variations, insted of launching a FULL FRAME CAMERA!

Sorry for my bad english, i'm from Argentina (I'm a huge fan of Pentax, I own a K-30, and i'd love to acquire a digital full frame pentax some day)

"Full Frame" camera: Prestige model, high price, small market, small total profit (maybe even loss), funds chairman's golf club fees.
Non-"Full Frame" camera: Entry and mid-level models, low price, much (much) bigger market, significant profit, funds technical development activities.

Note: the above does not apply in the case of Leica (low volume, high margin, high prestige or luxury products) or Sony (high volume, low margin, low profit/large loss products).

[NickLarsson]

For anyone still debating why Pentax needed a K-500, K-50, and K-5II/IIs it's because they are trying to take Nikon on directly. Just look at the chart the 3100 and 5100 combined have 22.4% of the market for dSLRs for 2012, but the 3100 has nearly as much as the 5100 (K-500 and K-50 for Pentax).

Actually they are not just trying to take on Nikon, they are following the market.
On this graph we can see an increase in sales for sub-$500 (K-500) and sub-$700 (K-50) DSLRs, whereas the $700-$1500 segment is declining.
So, having a consistent offer in these 2 growing segments was indeed a necessity.

[falconeye]

I lost track of this thread a bit, so maybe, this is a duplicate thought:

I think, Pentax more than anything else needs to be discussed and be taken notice of again. Needs an innovative product. Maybe the K-3 will serve this.

And only then will products like the K-500 and K-50 make sense. As lower price offers from a brand being considered.

Right now, who would buy? Pentax owners? No, nothing to upgrade. Newbies? No, no dealer today recommends Pentax to new buyers anymore (my guess). So, the products will likely sit idle in the shelves until something more exciting emerges from Pentax again.

[falconeye]

On this graph we can see an increase in sales for sub-$500 (K-500) and sub-$700 (K-50) DSLRs, whereas the $700-$1500 segment is declining.

Thanks for the graph.
However, all I can see is that the $2000+ segment doubled from 3% to 6% unit share while everything else is getting cheaper. Not the models drop in capabilities, their price does (at least for APSC).

Soon and you know that this is what I think, dSLRs above $1000 have to be FF to sell. According to your graph, FF unit share above $1000 reached 1/3 by 2012 already, which means that FF already overtook this segment by market volume.

---

Last edited by falconeye; 06-13-2013 at 06:19 PM.

[Docrwm]

Thanks for the graph.
However, all I can see is that the $2000+ segment doubled from 3% to 6% unit share while everything else is getting cheaper. Not the models drop in capabilities, their price does (at least for APSC).

Soon and you know that this is what I think, dSLRs above $1000 have to be FF to sell. According to your graph, FF unit share above $1000 reached 1/3 by 2012.

Yes, but selling price does not address profit margins and the $1000-1999 range dropped from 18% to 12% in the same time frame. $500-1000 forms the bulk of the sales and typically has significant profit along with it. The K500 and K50 fall into that market range with the Q7 just below that range.

[RobA_Oz]

I lost track of this thread a bit, so maybe, this is a duplicate thought:

I think, Pentax more than anything else needs to be discussed and be taken notice of again. Needs an innovative product. Maybe the K-3 will serve this.

And only then will products like the K-500 and K-50 make sense. As lower price offers from a brand being considered.

Right now, who would buy? Pentax owners? No, nothing to upgrade. Newbies? No, no dealer today recommends Pentax to new buyers anymore (my guess). So, the products will likely sit idle in the shelves until something more exciting emerges from Pentax again.

Pentax has generated a huge amount of internet discussion with the release of these three models. There are notes and initial hands-on reviews on a broad range of websites and blogs, the like of which I haven't seen before on the feed service I subscribe to which, among other things, looks for articles tagged "Pentax". That may be the result of growth of these sites, but it is nonetheless indicative of the amount of exposure such things get in the online media now. The Q7 seems to have attracted as much attention as the other two cameras, and they've all had much more attention than the K-5II/s models, just a few short months ago.

All of this has happened without an innovative product. The translation into sales, of course, will be quite another thing.

[ManuH]

1) What would have cost you 1000 bucks two years ago is now yours for 500 bucks. Not a bad deal at all.

That's what worry me the most, how Pentax is going to make substantial profits if their volume stays at 2-3% market share and they sell at very low margin?

[falconeye]

$500-1000 forms the bulk of the sales and typically has significant profit along with it.

The profit margins are at the high end, the top 6% is what the big players currently live from. Esp. if you add lenses...

The low end around $750 is under severe pressure from the mirrorless market and because dSLRs are so much more expensive to build (note that mirrorless have little mechanics and APSC sensors are cheap now), will soon be sold at zero margin (by the big two) just to keep market share and until their own mirrorless learn to fly.

And to Manu: they won't if they stay K mount APSC.

[Quicksand]

I think, Pentax more than anything else needs to be discussed and be taken notice of again. Needs an innovative product. Maybe the K-3 will serve this.

And only then will products like the K-500 and K-50 make sense. As lower price offers from a brand being considered.

That's a fair point. But in my opinion, Pentax is ABSOLUTELY doing this in the right order.

These products aren't flashy, but they are capable and (by virtue of sharing many components) probably fairly efficient and inexpensive to produce.

So when the exciting, innovative product DOES come out -- this autumn, right? -- the recently refreshed, lower priced, mass market products are there, available, ready to be sold, to capitalize on the short period when consumers are captivated by the new & shiny Pentax, at least until the next thing comes along from Canon or Nikon or Fuji.

[RobA_Oz]

A value proposition is a value proposition. Getting Pentax back into stores so salespeople can see the value proposition is vital to success at the low end of the market.

[Aristophanes]

The profit margins are at the high end, the top 6% is what the big players currently live from. Esp. if you add lenses...

The low end around $750 is under severe pressure from the mirrorless market and because dSLRs are so much more expensive to build (note that mirrorless have little mechanics and APSC sensors are cheap now), will soon be sold at zero margin (by the big two) just to keep market share and until their own mirrorless learn to fly.

And to Manu: they won't if they stay K mount APSC.

Profit margins are usually at both ends. Top end brings in the moneyed buyer while the lower end has a floor cost but bargain bin inputs. I would not be surprised that some low-end CCD P&S cameras generate a 50% margin.

The middle is always the problem. Cars, houses, cameras, it's always the majority of the unit volume but the area of greatest friction going up or down.

Another factor missing in these graphs is that major pro organizations like news networks, while in some decline, bolster high-end sales. The local newsroom here in a sub-1 million person market has a fleet of FF Canon's for its reporters. I would not be surprised if the pro buyers account for 1/3 of all FF sales, and especially of the big glass. So there's a real market schism between the pro segment and anything below. If you want to sell to pros the whole sales and support apparatus changes and Pentax hasn't got that.

FF is coming to Pentax because the wafers are getting cheaper with each cycle. The market is moving towards Pentax's core, but Pentax doesn't have the resources to move the market, not without that big pro subsidy. It's a tough nut. Sony knows.

[Aristophanes]

I am just not sure how much one can innovate the DSLR.

Colors? Lots of colours? Has anyone tried that yet?

[Docrwm]

The profit margins are at the high end, the top 6% is what the big players currently live from. Esp. if you add lenses...

The low end around $750 is under severe pressure from the mirrorless market and because dSLRs are so much more expensive to build (note that mirrorless have little mechanics and APSC sensors are cheap now), will soon be sold at zero margin (by the big two) just to keep market share and until their own mirrorless learn to fly.

And to Manu: they won't if they stay K mount APSC.

Interesting, I read completely different things about the high end cameras being either revenue neutral or a loss directly. They are often pitched as a marketing tool to bring in the mid & entry level buyers because of the prestige associated with the line and that is the justification for their existence, not the direct income generated by their individual sales. I realize that high end lenses carry a different, and higher, profit margin but still the bulk of sales is in the lower range along with lenses to go with those entry and mid-level cameras.

[monochrome]

Pentax has generated a huge amount of internet discussion with the release of these three models. There are notes and initial hands-on reviews on a broad range of websites and blogs, the like of which I haven't seen before on the feed service I subscribe to which, among other things, looks for articles tagged "Pentax". That may be the result of growth of these sites, but it is nonetheless indicative of the amount of exposure such things get in the online media now. The Q7 seems to have attracted as much attention as the other two cameras, and they've all had much more attention than the K-5II/s models, just a few short months ago.

All of this has happened without an innovative product. The translation into sales, of course, will be quite another thing.

Relationship building with the online community bearing fruit. I know they're doing this in the USA and I bet they're doing it in the EU as well.

[Aristophanes]

Interesting, I read completely different things about the high end cameras being either revenue neutral or a loss directly. They are often pitched as a marketing tool to bring in the mid & entry level buyers because of the prestige associated with the line and that is the justification for their existence, not the direct income generated by their individual sales. I realize that high end lenses carry a different, and higher, profit margin but still the bulk of sales is in the lower range along with lenses to go with those entry and mid-level cameras.

Gross unit sales and gross unit volumes from the bottom 80% of the market.

From my read of some Nikon stuff they make over 50% of their profits from FF.

They'r not Leica; they need both to work.

FF margins probably have a lot to do with the pro market subsidy.