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03-21-2012, 09:16 AM - 1 Like   #511
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QuoteOriginally posted by Aristophanes Quote
This is a bit dated, but someone at Canon had the decency to explain both the technical and economic issues:

http://www.robgalbraith.com/public_files/Canon_Full-Frame_CMOS_White_Paper.pdf
Translation: These partial truths will hopefully allow you to justify the purchase of our flagship FF cameras! We're practically losing money on each one due to these ENORMOUS sensor costs, and will be lucky to make payroll next quarter because of these stifling sensor economics we're sharing with you now. If you don't take advantage of us, you will kick yourself.



That paper has been discounted even in Canon-land for a while now - it's purpose is largely price-position justification, a marketing tactic disguised as a technical resource. It does contain some factual information, but sensor cost was dubious then and almost completely out of scope today.


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Last edited by jsherman999; 03-21-2012 at 09:45 AM.
03-21-2012, 11:05 AM   #512
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QuoteOriginally posted by jsherman999 Quote
Translation: These partial truths will hopefully allow you to justify the purchase of our flagship FF cameras! We're practically losing money on each one due to these ENORMOUS sensor costs, and will be lucky to make payroll next quarter because of these stifling sensor economics we're sharing with you now. If you don't take advantage of us, you will kick yourself.



That paper has been discounted even in Canon-land for a while now - it's purpose is largely price-position justification, a marketing tactic disguised as a technical resource. It does contain some factual information, but sensor cost was dubious then and almost completely out of scope today.


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The sensor suppliers list and fab costs were accurate and now that lost of CMOS suppliers has been dramatically consolidated.

And since then, FF camera prices have gone UP! Not down. Clearly Sony's over $1 billion investment in CMOS sensors alone says something about the costs and the overall investment profile necessary for sensor manufacture. There's not lots of small design shops and a few foundries; there's Sony, Canon, and everyone else....maybe.

If Sony is making it all for Nikon, no room for Pentax. Find $200 million elsewhere.
03-21-2012, 11:19 AM   #513
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QuoteOriginally posted by Aristophanes Quote
The sensor suppliers list and fab costs were accurate and now that lost of CMOS suppliers has been dramatically consolidated.

And since then, FF camera prices have gone UP! Not down. Clearly Sony's over $1 billion investment in CMOS sensors alone says something about the costs and the overall investment profile necessary for sensor manufacture. There's not lots of small design shops and a few foundries; there's Sony, Canon, and everyone else....maybe.

If Sony is making it all for Nikon, no room for Pentax. Find $200 million elsewhere.
APS-C's cost is increasing too: just take a look at nex-7 and fuji x-pro !
03-21-2012, 11:22 AM   #514
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QuoteOriginally posted by eddie1960 Quote
Apple's Computer market share is really the least successful part of their business. and the iPad is driving huge change in the computer market. For what a huge percentage of people (including at the corporate level) use laptops and computers for the iPad is rapidly encroaching on that territory. I'd say Tablets but the current reality is Apple pretty much owns the market and defines where it is going. everyone else is always in catch up mode. The iPhone is killing the Blackberry now that apple has solved security issues to government standards, and the iPad will do the same.

I don't always think they make the best product but they have really become marketing geniuses since the dawn of the original iPod (which pretty much saved the company)

We are finally caving and Picking up an iPad despite the fact that we have both a laptop and a desktop that are relatively new and powerful

If i can find the outboard hard drive i can load from an sd slot and then edit when traveling from the ipad while keeping the file on the hard drive the laptop will become a doorstop (as long as the screen isn't green like the one Falk posted)
I think that illustrates what I was trying to say. My boss just told me to get an iPad and stop printing bound presentations in color on 24lb paper. That'll be fun to use in an investment committee meeting,

If Apple decides to enter the interchangeable lens camera market rather than merely making obsolete the compact PnS they can most likely own it at will. If they introduce a new product that obsoletes interchangeable lenses they'll own it at will (Lytro?). I think the only thing protecting us is the (relatively) small number of potential units of ILC's to replace compared to the ubiquitous installed base of Walkman's, Cell Phones, laptops (plus green field adopters) and televisons globally. Interchangebale lens cameras are just to small a potential market to be worthy of exploitation.

03-21-2012, 11:40 AM   #515
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QuoteOriginally posted by Aristophanes Quote

And since then, FF camera prices have gone UP! Not down.
Goes to show you how the tier has become even more lucrative, then, since FF sensor costs have gone down since that paper was released!

It's well past time that Pentax gets in. Pentax-standalone didn't like the risk/cost in 2007, Pentax-Hoya was just a prep-for-sale, Pentax-Ricoh has the cash and the ability and (I suspect) the willingness to compete.

Nikon's 'throttling' of D800's at 30,000 per month probably has more to do with their ability to put cameras together and get through their QA regimen, and possibly their desire to keep the price at premium through 'scarcity' than it does Sony's inability to crank out the wafers for them.


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03-21-2012, 12:14 PM   #516
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QuoteOriginally posted by Aristophanes Quote
the pro sector will pay for what it wants when it needs it at full price.

I don't think most pro photographers' businesses are nearly as well-off as you make them seem.
03-21-2012, 12:43 PM   #517
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QuoteOriginally posted by ElJamoquio Quote
I don't think most pro photographers' businesses are nearly as well-off as you make them seem.
depends on the sector. Bear in mind that many pro's actually lease their bodies but buy the lenses (though they can be leased as well and bought out at lease end at very low cost)
03-21-2012, 03:54 PM   #518
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QuoteOriginally posted by eddie1960 Quote
depends on the sector. Bear in mind that many pro's actually lease their bodies but buy the lenses (though they can be leased as well and bought out at lease end at very low cost)
This business factoid still astonishes me every time you post it Eddie. Good gracious - leasing a camera. Must be a tax strategy.

03-21-2012, 04:17 PM   #519
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QuoteOriginally posted by jsherman999 Quote
Goes to show you how the tier has become even more lucrative, then, since FF sensor costs have gone down since that paper was released!

It's well past time that Pentax gets in. Pentax-standalone didn't like the risk/cost in 2007, Pentax-Hoya was just a prep-for-sale, Pentax-Ricoh has the cash and the ability and (I suspect) the willingness to compete.

Nikon's 'throttling' of D800's at 30,000 per month probably has more to do with their ability to put cameras together and get through their QA regimen, and possibly their desire to keep the price at premium through 'scarcity' than it does Sony's inability to crank out the wafers for them.
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We don't know that FF sensor costs have gone down by anywhere near as much as APS-C. Going from end-price of cameras, probably not by much, and new sensors still chew up R&D.

Pentax cannot just "get in". They would need to pre-purchase a supply of FF sensors from Sony at staggering cost, maybe more than the entire cost of Pentax to Ricoh.

Is there an ROI on that?

Sony has struggled to meet supply. Toshiba cold not do it and sold facilities to Sony. Sony had to refurbish and now needs high-margin FF to help pay the bill.
03-21-2012, 04:30 PM   #520
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3000 units/month * 36 months * 2500 $/camera = $270 million.

6000 units/month * 36 months * 800 $/lens = $170 million.

Looks like there's a bit of a budget to work with there.
03-21-2012, 05:08 PM - 1 Like   #521
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QuoteOriginally posted by ElJamoquio Quote
3000 units/month * 36 months * 2500 $/camera = $270 million.

6000 units/month * 36 months * 800 $/lens = $170 million.

Looks like there's a bit of a budget to work with there.
OK, OK, I have had enough of these FF threads, and just to stop the bickering, I'll make everyone the K-mount FF camera they have been clamoring for. No problem. I just need a little advance to get things started.

Say, 10%?
03-21-2012, 06:31 PM   #522
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QuoteOriginally posted by ElJamoquio Quote
3000 units/month * 36 months * 2500 $/camera = $270 million.

6000 units/month * 36 months * 800 $/lens = $170 million.

Looks like there's a bit of a budget to work with there.
Revenue is not profit. Many a company has posted impressive revenue numbers on the way to Delaware Chancery Court.
03-21-2012, 07:13 PM   #523
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QuoteOriginally posted by Aristophanes Quote
Well, that's why I said it is dated ;-)

There are now less that 3 suppliers of CMOS capable of supplying Pentax FF aspirations: Sony, Canon, and maybe Samsung. It's hard to tell about Aptina, but they have not made much in the way of sales for reasons that are likely technical. Sony has built up a substantial lead through acquisition, sales, and quality.
This is not a realistic claim . A number of imaging sensor suppliers who could provide a FF sized CMOS imaging sensor in their current catalogue or have announced upcoming availability such as STMicroelectronics and CMOSIS. I believe Aptina has FF designs also.
03-21-2012, 07:55 PM   #524
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QuoteOriginally posted by Aristophanes Quote
Is there an ROI on that?
Aristophanes, I see what you try to say and you certainly have a point. But IMHO, you push it over the edge.

E.g., your 1 billion $ fab investment by Sony (and IIRC, this wasn't by year) for 50,000 extra wafers/month translate into $1670 per wafer. That's a small figure compared to the cost per wafer which I already assumed anyway. It's more an argument that sensors are cheaper than we think.

And then your attitude to treat sensors as a rare good almost nobody except a few can buy. That's ridiculous. It isn't the way the market works. A CMOS imaging sensor is a product. It isn't contract work. It has a part number and a price per thousand. There may be a few extra deals like the ones between Apple and Intel for early access to new processors. The 36MP sensor seems to have such a deal too. But sensors are a readily available product, in any size.

The reasons Pentax or Olympus aren't entering the market (yet) is IMHO their fear to compete in the $2000+ markets.

While I can understand that fear, my worry is that it will be too late for Pentax to cope with FF when it drops well below the $2000 limit.

And you say FF got more expensive. This isn't how it is perceived by those going to buy one. In the past, FF was either crippled or unaffordable. You had a choice of bad AF (5D), bad resolution (D700) or insane price (the D3 or 1D variants). Now, both 5DmkIII and D800 have changed that and represent a massive price drop from the (now unprotected except for frame rate) 1D or D4. It will push the D700 below $2000 (as soon as production can cope with the demand again) and the entire APSC market in turn. The important test case will be the D400.

Last edited by falconeye; 03-21-2012 at 08:08 PM.
03-21-2012, 08:02 PM   #525
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QuoteOriginally posted by Aristophanes Quote

Pentax cannot just "get in". They would need to pre-purchase a supply of FF sensors from Sony at staggering cost, maybe more than the entire cost of Pentax to Ricoh.

Is there an ROI on that?

You're asking where is the ROI in a parts purchase? Each sensor bought by Ricoh is going to show a slight markup when delivered with camera, so I'm not sure how that becomes a difficult ROI schedule, or really how it even applies - ROI usually gets applied to things like factory construction, or R&D. If you're implying that Sony would require advance payment on say a year's worth of sensors, which would be delivered in monthly batches, it's not going to be anywhere near "the entire cost of Pentax to Ricoh."

It's extremely unlikely Sony would have to spin up an entirely new fab for Pentax's volume. So let's say Sony charges Ricoh $600 per sensor - probably 30 to 40% more than they're charging Nikon, and probably more than twice what the sensors cost Sony to manufacture. Ricoh figures that they may sell up to 10,000 FF cameras the first month, maybe 6000 the second month, and maybe between 2500 and 3000 each month after that... So they agree to pay up front for 46,000 sensors. At $600 a pop, that's a $27,600,000 outlay - which will be paid for in 12 months, when the last of the cameras go out the door. (Ricoh paid $124 Million for Pentax - $27mil != $124 Mil.) And that's assuming Sony would require advance payment for 12 months, and not payment on delivery.

Where Ricoh would need to worry about ROI is in things like the AF R&D, maybe the SR R&D, The body-sensor integration and testing, lens design R&D, and the relatively large cost of procuring raw materials and starting up additional assembly lines (in existing factories) for the new lenses.

Even if Pentax only made $500 profit on each $2500 FF body (probably low,) that's about $22 Million profit on the bodies alone in the first year, which would go toward the FF spin-up costs on an ROI schedule (not the 'sensor ROI' - that's already covered.) The lenses would have their own ROI schedule, and would pay for themselves handsomely.

Last edited by jsherman999; 03-21-2012 at 08:08 PM.
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