[UncleVanya]

Canon will launch a new $1600 FF mirrorless on Feb 14. And Sony answers with a $200 price drop on the Sony A7III - sonyalpharumors

---------- Post added 02-02-19 at 02:50 PM ----------

My impression is that a ff price war is about to break out.

[BigMackCam]

And so it begins...

[biz-engineer]

It's a rumor. In any case, evaluating system cost (camera and lenses included) is a better way. Considering camera price only can lead to making the wrong decision overall.

[UncleVanya]

And so it begins...

With Canon predicting a 50% market contraction, I see them being the aggressor even well beyond this.

[biz-engineer]

With Canon predicting a 50% market contraction, I see them being the aggressor even well beyond this.

There is a risk involved in cutting prices, if the increase of quantities sold doesn't compensate for the price drop. But if the price cut of the market share leader works, that's something hard to counter attack for smaller players.

[UncleVanya]

There is a risk involved in cutting prices, if the increase of quantities sold doesn't compensate for the price drop. But if the price cut of the market share leader works, that's something hard to counter attack for smaller players.

Even if sales remain flat the leaders can starve out the weaker players if they take profit away from their weaker competition.

[BigMackCam]

Even if sales remain flat the leaders can starve out the weaker players if they take profit away from their weaker competition.

True. That strikes me as a dangerous tactic, though... When they finally feel they've done enough damage and hike the prices a bit to start raking in (better) profits, that's going to meet with some resistance. Unless, of course, they can find a way to make those cameras so cheaply that they can sell them consistently at the lower prices and make them profitable, or sell enough lenses that the bodies are almost loss-leaders...

[NZ_Ross]

True. That strikes me as a dangerous tactic, though... When they finally feel they've done enough damage and hike the prices a bit to start raking in (better) profits, that's going to meet with some resistance. Unless, of course, they can find a way to make those cameras so cheaply that they can sell them consistently at the lower prices and make them profitable, or sell enough lenses that the bodies are almost loss-leaders...

The old gateway drug theory...

[disconnekt]

The Canon Eos R is already a striped down version of the 5D4 (aka a 5D4 lite) which they've gotten alot of flak for it, and as I see it a more striped down version of the Eos R isnt going to go good for them IF its true.

[biz-engineer]

Canon have the specific problem that they own their sensor manufacturing lines. That means Canon have additional fixed cost to run the camera business compared to every other camera maker. Fixed cost as the advantage that unit cost goes down when volumes go up (so it is an advantage to have a fixed cost model with the market is growing), but when the market shrinks it's the other way around: fixed cost in downturns is a major disadvantage because unit cost goes up as volumes fall. What that means is, either Canon camera business has to drop camera prices in order to achieve the quantities that offset the fixed costs, or Canon cannot sustain the fixed cost model any more and they would have to write off the sensor plant assets and buy the sensors to Sony... which is very likely to happen in the future: Canon starts by dropping their prices to gain volumes in the short term. But the problem is Canon already having a lot of market share, it's going to be hard to get more market share. So I predict Canon may drop prices, realize it's insufficient to recover camera volumes required by their sensor fabs, and them sell the sensor fab to another company and then source their sensor externally.