[Doundounba]

... it is a shrinking market and that probably means that yesterdays 800 dollar camera is now 1000 dollars.

That might very well be, but the competition is moving too... If you compare the KP to the XT-20 - both one step below top-level, though presumably so in the case of the Pentax - the value proposition is very different than it was when I bought my K-3, and it was K-3 vrs XT-1. At that time, the K-3 clearly outgunned the XT-1 for waaaay less money, in my opinion. Now, some years later, KP vrs XT-20 isn't so clear anymore. They're both 24MP now, but fairly different cams. There's WR and IBIS on the Pentax side, but on the other side there's 4k, touchscreen, faster bursts with deeper buffer, a much lighter body, possibly better AF and arguably nicer JPG engine for the Fuji. Fuji is also coming out with some nice reasonably inexpensive primes which address the issue of expensive lenses. And the KP is launching $200 above the XT-20. Some people dislike x-trans, and EVF vrs OVF can be a religious issue, but my point is the comparison isn't the same kind of ass-whuppin' that the K-3 dealt to the XT-1, value-wise, when I went with the K-3... On the other hand, Pentax bodies tend to go down in price much more than Fuji bodies, so maybe in six months the equation will be very different. For myself, I think I'll try to soldier on with the K-3 for now. Still one heck of a nice camera.

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Last edited by Doundounba; 01-26-2017 at 02:34 PM.

[monochrome]

You must have been in a rush. Volume down 50% means per unit profit margin must increase 100%. Assuming a 10% operating margin in the past means that prices have to increase 10% (every $100 of income came from $90 cost of goods in the past must now be $110 of income coming from same $90 of cost of goods).

Yeah, fixed costs have to be spread over a smaller volume, but that's what closing marketing offices is for.

At the factory door (where Ricoh Imaging makes its profit) how do we know a 50% retail price increase (marked up from the factory price) doesn't work backward to the same net Profit? *


* Fixed costs aren't the only costs, nor are SG&A expenses. Cameras are largely assembled by hand, of supplied sub-assemblies and components. If volume declines 50%, assemblers can decline 50%; assembler payroll is a variable cost. People are expensive. We don't know what proportion of unit cost is represented by fixed expense, but a 50% unit volume reduction clearly does not require a100% retail price increase to maintain nominal profit.

[monochrome]

The Dow broke 20k for first time.

A post-election of 10% rally is a no-brainer. Of all the Stock Trader's Almanac tradeable cycles, the post-election rally is as close to guaranteed as it gets. Ask me this question again in a year.

[MarkJerling]

In electronic goods, raw material costs is typically somewhere between 32 and 50% of retail price. We don't of course know how Ricoh's pricing structures work.

[biz-engineer]

Does Pentax actually have the capability to produce a D500 level camera? I suspect not, personally.

I don't think so.

The D500 is the result of at least 10 years of high performance camera development. I bet Pentax could cut that to 5 if they tried. "D

Surprisingly; I believe that Pentax did not yet do a D500 AF level camera because of the financial aspect of it. Technically, you hire a couple of engineers specialized in servo (servo know how is used in many fields; it's an old science) and chip designers. But financially , developing a new AF module is more expansive than developing a complete new camera model from scratch. The reason is that for a high performance AF like the one of the D500 you need to have most of the control performed very fast in hardware and real time software that runs independently from the OS that's on the mother board, which means that you have to spent the cost of design, prototyping and manufacturing of an ASIC + several iterations if it has to be tweaked with actual lenses; which development cost not shared with the remaining players of the industry. I believe the current Pentax AF servo is a very old chip, and the AFC tracking is done in software running on the camera OS itself; which explains why AFS is good, but AFC tracking is one of the worst you can find. In the D500, you can have both good AFC tracking and high FPS because, I believe there is a main processing unit on the mother board and a separate application processor for the AF tracking. I don't think Pentax has much proprietary silicon in their cameras. But I believe that Canon and Nikon have sufficient market share to have developed some application specific hardware for better performance.

[surfar]

Ask me this question again in a year.

Its in the diary!...ha ha

[RGlasel]

how do we know a 50% retail price increase (marked up from the factory price) doesn't work backward to the same net Profit?

That would be true only if distributors and retailers increased their markup percentages. What actually happens is that the players in the distribution channel are happy to make the same percentage from a larger per unit dollar value and shrinking unit volumes because of a shrinking market tends to lead to smaller markup percentages (to hang onto market share) until one of the distribution players fold and leave the game. It used to be that channel margins would recover once the weakest player dropped out, but retail markets are changing too fast for that to apply anymore.

Funny, I'm surfing here to take my mind off the grind of communicating a price increase to my customers and I end up posting about pricing strategies. Better get back to work!

[Rondec]

That might very well be, but the competition is moving too... If you compare the KP to the XT-20 - both one step below top-level, though presumably so in the case of the Pentax - the value proposition is very different than it was when I bought my K-3, and it was K-3 vrs XT-1. At that time, the K-3 clearly outgunned the XT-1 for waaaay less money, in my opinion. Now, some years later, KP vrs XT-20 isn't so clear anymore. They're both 24MP now, but fairly different cams. There's WR and IBIS on the Pentax side, but on the other side there's 4k, touchscreen, faster bursts with deeper buffer, a much lighter body, possibly better AF and arguably nicer JPG engine for the Fuji. Fuji is also coming out with some nice reasonably inexpensive primes which address the issue of expensive lenses. And the KP is launching $200 above the XT-20. Some people dislike x-trans, and EVF vrs OVF can be a religious issue, but my point is the comparison isn't the same kind of ass-whuppin' that the K-3 dealt to the XT-1, value-wise, when I went with the K-3... On the other hand, Pentax bodies tend to go down in price much more than Fuji bodies, so maybe in six months the equation will be very different. For myself, I think I'll try to soldier on with the K-3 for now. Still one heck of a nice camera.

Hard to say overall.

To me, Pentax still has an early adopter fee on their mid and lower tiered cameras and if you wait six month, you will probably be able to get this camera for 850 or 900. Fuji cameras don't usually drop that much and certainly Pentax's upper cameras like the K-1 have had a tendency to stay pretty constant from release price.

I think the biggest reason to choose Pentax at this point is the fact that they do offer full frame and if you have that in the back of your mind, then Pentax is the way to go. Fuji may offer medium format, but that is a red herring, as none of the lenses for the x mount will transfer to the new GFX.

Anyway, at this point, I choose Pentax because I have a bunch of lenses and I'm not interested in selling all of those and starting fresh, even if I could do so without the outlay of too much money. If someone is already invested in Fuji, Nikon or Canon, the equation would be completely different. This is why Pentax needs at least one cheaper k mount model to get folks in the door so hopefully as they move up, they continue to purchase Pentax cameras.

[caliscouser]

$1100 is the early adopter price. It will fairly quickly be sub one thousand whereupon it starts becoming a more compelling proposition for many.

[surfar]

Pentax still has an early adopter fee

Yes, pretty substantial too.$899 is a reasonable ask(in my mind) as compared to what else is available.Six months and itll maybe come into consideration?

[Ptitboul]

Surprisingly; I believe that Pentax did not yet do a D500 AF level camera because of the financial aspect of it. Technically, you hire a couple of engineers specialized in servo (servo know how is used in many fields; it's an old science) and chip designers. But financially , developing a new AF module is more expansive than developing a complete new camera model from scratch. The reason is that for a high performance AF like the one of the D500 you need to have most of the control performed very fast in hardware and real time software that runs independently from the OS that's on the mother board, which means that you have to spent the cost of design, prototyping and manufacturing of an ASIC + several iterations if it has to be tweaked with actual lenses; which development cost not shared with the remaining players of the industry. I believe the current Pentax AF servo is a very old chip, and the AFC tracking is done in software running on the camera OS itself; which explains why AFS is good, but AFC tracking is one of the worst you can find. In the D500, you can have both good AFC tracking and high FPS because, I believe there is a main processing unit on the mother board and a separate application processor for the AF tracking. I don't think Pentax has much proprietary silicon in their cameras. But I believe that Canon and Nikon have sufficient market share to have developed some application specific hardware for better performance.

It is not only software development. You need also a lot of fine tuning.

Subject tracking needs to starts with subject recognition. Pentax advertises the use of deep learning techniques (the Real-time Scene Analysis System) but these can only work after some training is done. I don't know how much manpower Nikon has put into this, but the only efficient way of doing this is to train the system with the most frequent scenes where subject tracking is needed: birding, sport shooting, kids and pets, etc.

One drawback of the Real-time Scene Analysis System (at least the way it is described on Ricoh's website) is that its only input is the 86k RGB sensor. Having access to the distance of the various elements of the scene helps to do scene recognition (by the way, this information is easier to get from PDAF systems than from CDAF systems, because the lens can transmit the focusing distance, and the PDAF system can approximately compute the distance to the plane in focus.
To my knowledge, even recent Pentax lenses don't transmit precise focusing distance.

[jlstrawman]

I think the two factors here that most folks aren't considering are the yen to dollar/Euro exchange right now and the decreased number of camera sales as a whole. Pentax continues to have four to five percent of the market, but it is a shrinking market and that probably means that yesterdays 800 dollar camera is now 1000 dollars.

It sucks, but it probably is the new reality. (Sad when for awhile it seemed like new cameras came out with higher specs and priced the same or even slightly cheaper then previous generation cameras).

+1. One of the most sensible postings in this thread.

[biz-engineer]

But, the problem is that the rumored price here seems to be €1,130, while we can buy the K-3 II, from respectable retailers, for around €750...

That means the K-3II is going to be discontinued soon.

---------- Post added 26-01-17 at 23:16 ----------

It is not only software development. You need also a lot of fine tuning.

I agree.

[rawr]

I don't think Pentax has much proprietary silicon in their cameras.

They have about the same as Nikon. Pentax and Nikon both use Milbeaut image processors at their core, after all.

Ricoh has their own chip designers, BTW. Ricoh developed their own 86k RGB sensor for the K-3 and onwards, for example, and it was a big step up from the 77 segment previous metering sensor. If they wanted to make dramatic changes to their AF hardware, including a new PDAF sensor array and a dedicated AF data processing chip, I'm sure they could do it.

But it's not just the hardware. What you see in Nikon and Canon AF represents a long history of incremental hardware and software improvements. Including a lot of real-world field experience with sporting and other pros that has been fed into the development of Canikon AF, from tracking algorithms to face detection to menu options.

All of the above is doable by Pentax, but Pentax has not made 'sports' AF improvements like AF.C tracking a priority. But to be fair, for some time now, Pentax have done better than Nikon and Canon in other important areas of AF, like the -3EV low-light sensitivity Pentax AF has had since K-5II, but which many a Canikosony still lack.

[mecrox]

$1100 is the early adopter price. It will fairly quickly be sub one thousand whereupon it starts becoming a more compelling proposition for many.

I've already received an email from my dealer offering a special trade-in inducement together with some free swag by way of cards, etc. Yes, deals and discounts are on the way.