[Blue]

Panasonic is a $100 billion company. Any comment about their corporate health may be totally irrelevant to their camera business which can only be a tiny portion of the overall enterprise.

I responded to that in a subsequent post. That is exactly the point, the camera portion is insignificant to those companies with the exception to Oly who is relying on Sony. However, if the Corporation gets into trouble, the smaller entities get "boned out" in the scrap yard. A good example is Kodak.

[gazonk]

Here again I think we're making the mistake that consumers of cameras all want the same thing. When has this ever been true? The OM-D is much smaller than an FF camera. And, even more important, the m4/3 lenses are much smaller as well. You can fit an m4/3 zoom lens in a pocket. What Nikon or Canon zoom lenses are pocketable?

Good point. I think the OM-D with those nice prime lenses appeal to many of the same people that are attracted to Pentax cameras with primes.

[jcdoss]

I think the OM-D with those nice prime lenses appeal to many of the same people that are attracted to Pentax cameras with primes.

I can vouch for this, since it's true for me. I just picked up a K30 in the past couple months, but I came very close to getting an OMD instead.

[Rondec]

I know that many people want smaller cameras and lenses. However, it is not clear to me how much savings in size four thirds truly has. If I understand correctly, the DA 40 and DA 70 are full frame lenses. They are quite small and at the same time faster (on full frame) than most Olympus lenses. Many of the four thirds lenses are small because they are slow.

[mecrox]

I seriously doubt that that's true. The margins on the high end stuff are almost always much greater than the low-end stuff. Companies make little, if any money selling kit lenses and entry level cameras. The margins are on the mid- and high-level stuff. It's fairly well acknowledged, for example, that Fuji is making money on their X series of cameras, particularly the pricey X-pro (along with the pricey X lenses). Olympus probably makes money on the E-M5; but I have seriuos doubts about their entry level Pens, some of which are being dumped on the market at prices below what compact P&S cameras sell for. In economics, there is theory known as "perfect competition," where all products are pretty much alike and no company enjoys special monopoly advantages. Under such a market, nobody makes profits. The low-end markets approach the conditions limned by the perfect competition theory. Competition is so intense that none of the smaller players can make any money in that market. So for example we find Pentax deciding to go without any entry level camera for the nonce. Why would they do this? Well, maybe their entry level cameras weren't making any money.

If I've left the impression that I'm writing of MILCs, then I've been misread. As a matter of fact, I regard m4/3 as a very promising format for those who want a compact system. I also have a lot of respect for the Fuji X system and the Ricoh GXR. I merely believe that predictions holding that compact MILCs will replace DSLRs are misguided. People who make such predictions are guilty of concentrating way too much on cameras, rather than the system (and particularly the lenses) that is built around the camera. While it is true that many consumers rather doltishly buy the camera first and then buy into the system later on, no real commitment to a brand takes place until the photographer begins investing into lenses, flashes, and other expensive accessories. And it's by having people commit to your brand (i.e.,buy a lot of expensive stuff that can't be used with other brands), that companies make the bulk of their profits. Nikon and Canon produce the best system camera; and that's why they're the most profitable brands. DSLRs are better system cameras than MILCs (it's not even close); and because larger cameras are needed to balance the larger lenses and powerful flashes favored by most serious photographers, DSLR systems are likely to be superior as systems to other formats for many years to come. Putting android in cameras is not going to change that. On the contrary, it strikes me as a rather desparate gesture on the part of companies who aren't making money on their products because they still haven't figured out how to make a great system camera.

My understanding is that the majority of buyers just want a camera and buy a max of one extra lens, if any, over the kit lens. They aren't buying into a system in that sense and almost all the stuff on here about systems, lenses, format wars, DR, sensor performance et al really isn't of any interest to them. The systems for the "serious photographer" with a deep pocketbook may be the most profitable part but it is the sheer volume of the rest, the "just a camera" buyers, which keeps the whole show on the road.

Again, I suspect folks on here wildly overestimate the numbers of "serious photographers" and big spenders compared to the overall market.

The objections which folks on here have against MILCs don't really apply to the majority of those who buy them. They work just fine and dandy for their intended market and increasingly fine for almost any market as MILCs mature and become more sophisticated. There's a bit of snobbery about MILCs from among The Serious.

In the meantime, the affair of Ricoh and Pentax looks more rum by the day. Interviews suggest Pentax are not interested in the MILC sector, for which a new mount would be pretty well unavoidable. At the same time, any commitment to an FF camera is pushed further and further into the future with non-commital comments of one kind or another. This leaves Pentax, at the moment, betting the farm on just one sector, the traditional APS-C DSLR, which is the same strategy they've had since before Hoya turned up. But time has moved on and the APS-C bet is being eaten at both ends by cheaper FFs and MILCs neither of which was on the horizon when the original bet was placed. While the traditional APS-C market is sure to be with us for a long while, it's hard to see how it alone will deliver the kind of growth which Ricoh say they are looking for. Improved on-sensor AF and better EVFs threaten more pressure on the traditional big box OVF camera over the next few years, too.

So why did Ricoh buy Pentax then?

I'll chuck in the rumour that Sony will have an FF NEX with lenses within 18 months. I just don't see how the Pentax impasse can continue with the landscape changing like this. We'd all like to them to do better than well but few on here seem to think that can happen with just a few APS-C DSLRs to carry the load. Rum, very rum.

[beholder3]

[deleted]

[the swede]

Easy now folks! All in time.

I dont have a single Pentax lens or camera left. My interest in the brand keeps me here, even though they dont get my money. Call me a deserter or anything you like.

Pentax will do good, just wait. They wont be Canon or Nikon, like many seem to want. They will stay Pentax, unique and niche and there will be buyers!

[mecrox]

I agre on the comments about the average buyer. Many forum users have problems differentiating between relative margins and absolute profits. Both are relevant but the last one is essential.

Selling 10 cameras / year with 50% margin of $1500 is $15000 profit. Selling 1000 cameras / year with 15% margin of $100 is $100000 profit. Guess where the meat is?

Then on the MILC market: Currently it simply is stagnant. It is not eating away into DSLR territory in a big way. That was the case in the past. Now: stagnant. Look at the official numbers. It is a significant market now but it's not really the big threat.

Same on the tiny FF market "eating away" at APSC. Yes it does, but incredibly slow. 5% of sales now and Nikon targeting 8,x % already forces them to throw out their stuff with huge drops in prices, because the demand is simply not there. No other camera failed it's starting price so massively like the D600 (3 months -25%). Trying to gain market share at all cost.

Then what are people buying: One 620 EUR DSLR per year with 1,5 lenses per year, the lens costing 290 EUR (new) - all average.
As sensors / chips get cheaper we will all slowly get more sensor area for a given currency unit, yes. But for any significant impact on the current APSC market FF cameras (rich with features as the APSCs are, not crippled ones with slow series and such) will need to get close to this 620 EUR price level. When do you think we will be there? Next year?

The above prices are based on German market only. That means the figures are based on a high price level market, where price figures in EUR usually correspond 1:1 to figures in USD.

A really useful post, thank you very much. Agree with all of what you say bar one aspect. I would guess that the presence of MILCs and cheaper FFs limits what traditional APS-C DSLRs can do with pricing? APS-C DSLRs can't be priced up any more because now they are competing against other things. A flagship APS-C DSLR meets a price barrier in the form of a cheap FF cam even if the FF cam is pretty dodgy. Same may apply with lenses: folks might look askance on paying as much or more for an APS-C lens than for an FF one. Wouldn't this affect profitability for a company like Pentax? Their room for manoeuvre is perhaps more limited than it was.

[IchabodCrane]

In the 15 years or so that digital photography has been mainstream, the digital camera market has done nothing but continue to diversify. Is there any evidence that trend will stop? In sensor size alone, there are four nominal sizes that are used for the "enthusiast" camera: 1/1.7", 1", APS-C, FF. Accordingly, I don't see how it's wise for any manufacturer to put all it's eggs into one basket -- the APS-C dSLR in Pentax's case.

[Kunzite]

Oh, but they aren't.
First, I'd say a better approach is to consider mounts/systems, not sensor sizes. Different sensor sizes (within some constraints) can be used for each system. And Pentax have 3:
- the K-mount, which currently accommodates APS-C sensors, but will probably be extended to FF as well. It definitely won't stay as it is.
- the 645 mount, now with a 44x33mm sensor, I expect some very interesting developments in this arena (already started, with the inclusion of SR).
- the Q, which is doing quite fine (at least) in Japan
There are also the compacts, but afaik those are losing money; and the Ricoh products.

[Blue]

In the 15 years or so that digital photography has been mainstream, the digital camera market has done nothing but continue to diversify. Is there any evidence that trend will stop? In sensor size alone, there are four nominal sizes that are used for the "enthusiast" camera: 1/1.7", 1", APS-C, FF. Accordingly, I don't see how it's wise for any manufacturer to put all it's eggs into one basket -- the APS-C dSLR in Pentax's case.

While it has been around that long, I wouldn't say it was mainstream until ~ 2002 and even then there was still a lot of film in use.

[IchabodCrane]

Oh, but they aren't.
First, I'd say a better approach is to consider mounts/systems, not sensor sizes. Different sensor sizes (within some constraints) can be used for each system. And Pentax have 3:
- the K-mount, which currently accommodates APS-C sensors, but will probably be extended to FF as well. It definitely won't stay as it is.
- the 645 mount, now with a 44x33mm sensor, I expect some very interesting developments in this arena (already started, with the inclusion of SR).
- the Q, which is doing quite fine (at least) in Japan
There are also the compacts, but afaik those are losing money; and the Ricoh products.

But only one of those three mount systems is really suited for what most people would call the enthusiast photographer market (sensor size of 1/1.7" - FF) and that's almost exclusively the market Pentax tries to serve on a global basis.

The more I think about it, the more I believe it was a waste of time and money for Pentax to develop a mount for what's now a basic P&S and mobile phone sensor. Think of where Pentax could be if that effort was put into a mount for a 1" sensor or something like that.

[ihasa]

If the K mount was originally designed for 35mm, why will it be less than optimal for full frame digital?

It may not be optimal for FF mirrorless if you reduce the registration distance, although I'm not technically up on these things and would be grateful if one of the tech-heads could confirm that. (In terms of having to buy new lenses it doesn't matter if the mount is wider than the K-mount, as a mirrorless camera must have a reduced registration distance to have a size advantage over a DSLR anyway, as we saw with the K-01. That means new lenses or using an adapter).

Perhaps things will go this way -

- The K mount will continue for DSLRs.
- A new mount will be provided if future MILCs are developed, to allow the option of FF mirrorless lenses if that's the way the market goes, but avoiding the deep registration distance of the K-01, which was way too big to capture any market share.
- As the new mount will be larger, and the registration distance shorter, there is no problem with providing an adapter for regular K-mount lenses.

I do not have an issue with using an adapter with K-mount lenses. That is exactly what I do with my Sony NEX, and I do not especially care about losing AF, but I am sure Pentax could design one with exif-transfer and auto aperture.

If Pentax made such a camera, I would buy it as it would have those little Pentax features which the NEX lacks, and would be more convenient to use with my favourite K-mount lenses. But I would probably buy a few of the new lenses as well, for the convenience of AF.

[Kunzite]

If you reduce the registration distance it won't be K-mount, and then you'd better do all sorts of modifications (larger diameter, full electric mount). But the K-mount itself is not less optimal than the F-mount...
- The K mount will continue for DSLRs. - yes, for sure; everything else is speculation, and won't happen in the near future.

But only one of those three mount systems is really suited for what most people would call the enthusiast photographer market (sensor size of 1/1.7" - FF) and that's almost exclusively the market Pentax tries to serve on a global basis.

The more I think about it, the more I believe it was a waste of time and money for Pentax to develop a mount for what's now a basic P&S and mobile phone sensor. Think of where Pentax could be if that effort was put into a mount for a 1" sensor or something like that.

I counted all of them because all generates money, on which Pentax survives and develops future products.
I don't care much about the Q, however I don't think it's such a bad idea. To make it probably costs much less than a "full fledged" system, and I'm including the lenses; and in Japan is selling very well, at prices similar to those of m4/3 cameras.

[northcoastgreg]

However, it is not clear to me how much savings in size four thirds truly has. If I understand correctly, the DA 40 and DA 70 are full frame lenses. They are quite small and at the same time faster (on full frame) than most Olympus lenses. Many of the four thirds lenses are small because they are slow.

If we're talking about primes, I think it's the other way around: the limiteds are small because they are "slow." Many of the m43 primes are pretty fast: 12/2, 20/1.7, 25/1.4, 45/1.8, 75/1.8. The fastest DA limited is 2.4. Granted, the differences in size between limiteds and M series primes on the one side and m43 primes is not really significant. The main advantage is with zooms. You can as easily carry three zooms covering FF equivalent range 18 through 300mm with one zoom on the camera in two zooms in the pocket. If you're traveling on foot, plane, train, subway that can be very convenient. It's no coincidence that the compact MILCs are doing well in Asia, where a lot of people live in crowded cities. The MILCs are urban cameras. I live in the western United States a scenic rural area. Hardly anyone around here owns an MILC. It's all DSLRs, FF for the few who can afford it, APS-C for the rest of us. Size is not a big problem. You just throw your gear in your car and drive to your destination.

Selling 10 cameras / year with 50% margin of $1500 is $15000 profit. Selling 1000 cameras / year with 15% margin of $100 is $100000 profit. Guess where the meat is?

But this assumes that the lower-end stuff has a 15% margin. If that were true, we would expect the camera divisions of Sony, Panasonic, and Olympus to turn a profit. They're not. Olympus probably made money on the E-M5, their most expensive m43 camera. Fuji made money on the pricey X-Pro. The competition is just too intense among the entry level stuff. It's driving margins to close to zero. And when companies have large overstock that has to be reduced to firesale prices, they lose money. The products that make money are those that have significant uniqueness which allows for higher margins. That's why Pentax talks about making a unique FF camera, something different from what Canon and Nikon are making. That's the only sort of FF that Pentax can hope to turn a profit on.

The rub is that not all unique products will make money. 4/3rds DSLRs were unique, but they didn't make it. A compact FF MILC would be unique, but Sony claims there isn't a market for such a product, and it's not clear that such a system makes sense, given that most photographers prefer zooms and FF zooms are too big to fit in a compact system.