Pentax: "Amateur" product means more value, less dealer margins?

[eronald]

By calling the 645D an "amateur" camera, Pentax allows box-pushers to sell it, and tells us we can employ standard computer costing. So 10K retail works out to around 7.5K dealer, and we get 5 K in gross margins with a camera whose assembly is factory costed at 2-2.5K, with even 3K possible. My impression is that the 645D is costed as a very good body, or one whose price can sink very substantially once the production has got going and profits can be made on lenses.

Taking the "Value Added Dealer" out of the equation certainly has its advantages in getting product out to the masses; being Pentax and being able to source decent screens for your back LCD may even make a difference for our readership here. Last, not least, writing straight to DNG moves software support costs out of house, while providing end-users with an interface they already know.

If Pentax use the factored-in margins to pay Fuji to make them a Cmos chip that can do Liveview, they may put the Phase, Leaf and Hassy "dealers" out of business. And probably only one of these European companies will survive - I bet on Hassy because they too will get access to any chip made by Fuji.

Oh, and why should Fuji be interested? Because they own the "marriage photography" market in Japan, with an emphasis on full-service to printing, and the time for film in this market is running out. Their customers want a "high status" camera with high DR which can image both the bride's white dress and the groom's black Tux.

Edmund

[David Watson]

Edmund

Very interesting and perceptive point of view and I certainly would not discount the scenario you describe coming true but (there always is one isn't there?) I think that you might be assuming that most Leaf/Phase/Hassy cameras are bought by hard headed pros who know the value of a buck/pound/euro.  Both of those assumptions are untrue to a degree.  Many (maybe most) high systems are not bought by pros but by high end amateurs who can afford to buy what they perceive is the best and/or most desirable.  What else can explain the sales of Leica M9's, S2's, Hasselblad H4D-60's, Alpa/P65's etc etc. some of which are on long or very long lead times.

What will dictate whether these companies can survive is not what Pentax is doing in the "middle" market but how well each of these businesses are managed.  As you know the only things that matter, if a business is to survive, are its profits and cash flow.

If I was a betting man I would say Leica should survive simply on the cache of its brand and its products.  I wouldn't discount one or other of Hasselblad or Phase One/Leaf either going out of business or being taken over by the other.  A Hasselblad H4 with a Phase One P65+ back fully integrated with one battery and a choice of Schneider and Hasselblad lenses.  Now you are talking!

[eronald]

I don't care about Leica in the above scenario, and actually I am discounting Hassy and Phase sales initially; the focus here is Pentax:

1. Pentax sells via channel, makes headway and profit competing with H4D/31 and also selling to amateurs, with lower dealer margin and more dealers.
2. Pentax upgrades product to $10K competing with $20K Phase/Hassy high end; reviews start saying "Pentax much better sensor".
3. Pros and more amateurs move over to Pentax, and they make more headway/profit.
4. One of Hassy or Phase is now outclassed, lacks development funds, goes the way of the dodo, the Contaflex and the Contarex.

This scenario is familiar to any observer of the Japan/Germany camera wars in the late 60's early 70's. The German camera makers got demolished.

Edmund

Edmund

Very interesting and perceptive point of view and I certainly would not discount the scenario you describe coming true but (there always is one isn't there?) I think that you might be assuming that most Leaf/Phase/Hassy cameras are bought by hard headed pros who know the value of a buck/pound/euro.  Both of those assumptions are untrue to a degree.  Many (maybe most) high systems are not bought by pros but by high end amateurs who can afford to buy what they perceive is the best and/or most desirable.  What else can explain the sales of Leica M9's, S2's, Hasselblad H4D-60's, Alpa/P65's etc etc. some of which are on long or very long lead times.

What will dictate whether these companies can survive is not what Pentax is doing in the "middle" market but how well each of these businesses are managed.  As you know the only things that matter, if a business is to survive, are its profits and cash flow.

If I was a betting man I would say Leica should survive simply on the cache of its brand and its products.  I wouldn't discount one or other of Hasselblad or Phase One/Leaf either going out of business or being taken over by the other.  A Hasselblad H4 with a Phase One P65+ back fully integrated with one battery and a choice of Schneider and Hasselblad lenses.  Now you are talking!

[David Watson]

 

Edmund I do not think that we are really disagreeing about this but Pentax will never be a Leica or a Prada or a Ferrari or a Hasselbald come to that.  What I did say is that whether one or both (Hasselblad & Phase One) survive will entirely depend on the quality of their management decisions given the actual and potential threats from Pentax's new 645 and other potential competitors.

In fact if Hasselblad's owners lose patience with the management in the face of this competition and their own blunders they may well go the way of Rollei (aka Dodo) or if Phase One's marketing skills wilt in the face of arguably an already better camera and potentially better sensor both may go which would be a shame - wouldn't it?

So you see I am fundamentally in agreement with your proposition but simply pointing out that the existing MF suppliers do have an opportunity to defend themselves if they are clever enough and if the threat comes to pass.

Interesting thread.

[Kumar]

Oh, and why should Fuji be interested? Because they own the "marriage photography" market in Japan, with an emphasis on full-service to printing
Edmund

Fuji sells frames as well. Full service, indeed!

Kumar

[BillOConnor]

What has to be factored in is the peculiar photographic culture of Pentax.
Both the Pentax 645 film camera and the Pentax 6x7 scared hell out of every medium format slr company out there until it became clear they
would not offer them with Polaroid backs. Despite the clamoring from working pros, they steadfastly refused.
The Polaroid back of digital is shooting tethered, less true with live view. If photographers can get it to shoot tethered with non-Pentax software,
which I'm sure they can, the point is somewhat moot.
The other issues are leaf-shutter lenses in focal lengths useful to people who use flash-fill outdoors and persuading Schneider--or Hartblei--to make
their 120 TS Makro in the Pentax mount. Their other TS lenses are offered for Canon, Nikon, Pentax, Sony, so why not Phase One and Pentax?
If they do this, they're highly competitive on many different levels, wedding/portrait, still-life studio, nature. My gut feel is that Pentax may not do
those things, and the photographer is forced to hope they offer leaf-shutter lenses and TS lenses sometime soon.
My experience is: if they don't offer them NOW, don't assume they will in time to do you any good.

[eronald]

David,

 We seem to agree about that the odds are that one of either Phase or Hassy may get to be Borg, but at least one will be Assimilated

Edmund

Edmund I do not think that we are really disagreeing about this but Pentax will never be a Leica or a Prada or a Ferrari or a Hasselbald come to that.  What I did say is that whether one or both (Hasselblad & Phase One) survive will entirely depend on the quality of their management decisions given the actual and potential threats from Pentax's new 645 and other potential competitors.

In fact if Hasselblad's owners lose patience with the management in the face of this competition and their own blunders they may well go the way of Rollei (aka Dodo) or if Phase One's marketing skills wilt in the face of arguably an already better camera and potentially better sensor both may go which would be a shame - wouldn't it?

So you see I am fundamentally in agreement with your proposition but simply pointing out that the existing MF suppliers do have an opportunity to defend themselves if they are clever enough and if the threat comes to pass.

Interesting thread.

[ErikKaffehr]

Hi,

Phase can do good business selling to retired businessmen working with both MF SLRs and large format stuff. A digital back gives a tremendous flexibility. The Pentax seems to offer a lot for the price. I'd say it's competitive with the Nikon D3X in price but has twice the pixels. Of course, we need to see the price for the whole kit.

I don't know if there is room for two MF makers. The Hasselblad is well established as an MF system and the Phase One backs seem also be well established and Phase is building a system.

Best regards
Erik

I don't care about Leica in the above scenario, and actually I am discounting Hassy and Phase sales initially; the focus here is Pentax:

1. Pentax sells via channel, makes headway and profit competing with H4D/31 and also selling to amateurs, with lower dealer margin and more dealers.
2. Pentax upgrades product to $10K competing with $20K Phase/Hassy high end; reviews start saying "Pentax much better sensor".
3. Pros and more amateurs move over to Pentax, and they make more headway/profit.
4. One of Hassy or Phase is now outclassed, lacks development funds, goes the way of the dodo, the Contaflex and the Contarex.

This scenario is familiar to any observer of the Japan/Germany camera wars in the late 60's early 70's. The German camera makers got demolished.

Edmund

[ziocan]

We all got a little less margin  on our business, lately.
We should not worry too much on some people business that were on borrowed time and had a reason to exist simply because the products they have been selling were: not working as advertised and should have been considered prototypes until last year.
Some of those products if they were in the car business (pardon the analogy, but considering the price...), could not have passed a road test.

[eronald]

In a way, amateur and box shifter products are always better, because low-margin high-volume retailers cannot tolerate high defect rates in a product. More than a couple of percent and the product won't get sold through that channel.

Edmund

Some of those products if they were in the car business (pardon the analogy, but considering the price...), could not have passed a road test.

[BrendanStewart]

Call me crazy here (I am a hassy owner after all)

But i don't see how you guys can discount Hassy or Phase so easily. They are both developing new competitive products at a 'decent' rate and they are surely going to react to this introduction to the market. In fact, i believe the H4D31 was a direct result of the Pentax being introduced.

Someone asked about the perceived 'threat' in the Hassy forums and here is what i said:

1. Hasselblad has some of the best lenses in the business. And a full line of modern lenses...
2. Phocus extends the system and is made to take advantage of the hardware.
3. Faster sync speed in most lenses
4. A full USA support network.
5. True Focus - Reliable  vs. outer focus points on pentax which are questionable by forum reports.
6. Upgrade paths and programs.
7. Rental Network.
8. HTS

I'm sure there are other things i'm missing...

The H4D31 is currently priced at $13k with 80 2.8 lens. The Pentax is rumored to be at $10k with no lenses.  As anyone who owns a hassy knows, their lenses sell at about 50% of retail on most models in the used market.

So i ask you, knowing of Hassy's full system, why would anyone go to Pentax? Weather sealing? Maybe, if it's that important to you. Why else? True Focus is proven and it works and works quite well. And their lenses are cheap on the used market.

.02

[Guy Mancuso]

Call me crazy here (I am a hassy owner after all)

But i don't see how you guys can discount Hassy or Phase so easily. They are both developing new competitive products at a 'decent' rate and they are surely going to react to this introduction to the market. In fact, i believe the H4D31 was a direct result of the Pentax being introduced.

Someone asked about the perceived 'threat' in the Hassy forums and here is what i said:

1. Hasselblad has some of the best lenses in the business. And a full line of modern lenses...
2. Phocus extends the system and is made to take advantage of the hardware.
3. Faster sync speed in most lenses
4. A full USA support network.
5. True Focus - Reliable  vs. outer focus points on pentax which are questionable by forum reports.
6. Upgrade paths and programs.
7. Rental Network.
8. HTS

I'm sure there are other things i'm missing...

The H4D31 is currently priced at $13k with 80 2.8 lens. The Pentax is rumored to be at $10k with no lenses.  As anyone who owns a hassy knows, their lenses sell at about 50% of retail on most models in the used market.

So i ask you, knowing of Hassy's full system, why would anyone go to Pentax? Weather sealing? Maybe, if it's that important to you. Why else? True Focus is proven and it works and works quite well. And their lenses are cheap on the used market.

.02

As a Phase owner i have to agree as well, neither one is sucking wind right now.Backlogs to get the HD-60 and P65+ and with Leaf coming out with a 80 mpx you know Phase is right behind them with announcements on maybe several back configs. with that sensor. Seriously and yes i am crazy if anything the Pentax will bring more 35mm shooters into the MF fold and they will eventually upgrade into the Hassy and Phase gear. This speculation is just as good as anything else, I own and teach workshops and folks are loaded for bear. So for OEM's falling to there knee caps which I believe will never happen is not realistic. What may happen if anything is just less dealers but the companies i don't see them falling apart they survived this long which says only one thing they have a load of money backing them up. Perception is one thing maybe coming from us Pro's as business has dwindled but this does NOT effect the hobbyist at all. Photography is a really cheap hobby compared to boats , racing vehicles and things of this nature which costs run into the hundred thousands.

Okay I'm a optimist so sue me. LOL


I should add here if the hobbyists are keeping this alive than more power to them. It just brings new technology going forward for us Pros to utilize. After 35 years since I have been doing this and going through many economic downturns it has survived and flourished.

[John R Smith]

I should add here if the hobbyists are keeping this alive than more power to them. It just brings new technology going forward for us Pros to utilize. After 35 years since I have been doing this and going through many economic downturns it has survived and flourished.

I think Guy is right. After all, back in the days of the 500 and 200 Hasselblads, it was usually reckoned that the company was kept afloat by dentists and lawyers.

John

[Rob C]

I think Guy is right. After all, back in the days of the 500 and 200 Hasselblads, it was usually reckoned that the company was kept afloat by dentists and lawyers.

John

Well that's a new one on me, John. I never saw another 'blad with anybody other than a pro photographer; it might well be how the 500 and 200 series are seen today, but not the view I knew about them during my tenure.

Rob C

[ndevlin]

Let me put my cat amongst the pigeons.

1.The margins on the Pentax are no better than on the other systems. Indeed, there is much more 'fat' in the price on Phase and Hassy, I suspect.

2. The 645D was brought to market on a 'let's hope we at least break even' basis to generate sales to make Pentax look more attractive to potential buyers as Hoya continues to try to sell it.

3. Hassy is fine because they have such a strong hold on the pro market. For people who need what they offer, they are a compelling solution.  That said, I can't imagine ever using their gear in its present form because (i) the camera's still a POS; (ii) the lenses are insanely large and heavy; and (iii) Phocus is a Phucking nightmare to me. (Their lenses are no better or worse than any others in the MF market - just much bigger).

4. The USA and EU have very little to do with whether MF makers survive. It's all about the BRIC.  Especially the "C" part of that. Brand perceptions will have a lot to do with that.

5. Rich people, of dubious and variable photographic ability, already are what sustain the digital MF market, and will remain so.

6. No one really knows whether today's 16 year-old ipod/ipad/ieverything kid will have the slightest interest in MF digital cameras. More likely he will look at them as being in the same realm as VHS players.

As the old curse goes, may you live in niteresting times....

- N.

[BJL]

What has to be factored in is the peculiar photographic culture of Pentax.
Both the Pentax 645 film camera and the Pentax 6x7 scared hell out of every medium format slr company out there until it became clear they would not offer them with Polaroid backs. ... The Polaroid back of digital is shooting tethered, less true with live view.

The 645D had HDMI output "for high-resolution image data output", to quote the Pentax press release. Can this provide an image on a remote screen that substitutes adequately for the "polaroid preview" aspect of MF back tethering?

[David Watson]

3. Hassy is fine because they have such a strong hold on the pro market. For people who need what they offer, they are a compelling solution.  That said, I can't imagine ever using their gear in its present form because (i) the camera's still a POS; (ii) the lenses are insanely large and heavy; and (iii) Phocus is a Phucking nightmare to me. (Their lenses are no better or worse than any others in the MF market - just much bigger).
5. Rich people, of dubious and variable photographic ability, already are what sustain the digital MF market, and will remain so.

At the risk of saying something that might be construed as offensive the Hasselblad H camera is not in your words a POS!!!  I don't know where you are coming from but in the context of its MF competition it stands head and shoulders above anything else currently available including the Pentax and the Mamiya/Phase One. 

Okay let me be possibly offensive again.  Being a Pro does not necessarily make you a good photographer and being rich enough to own a Hasselblad as an amateur does not necessarily imply that you have dubious photographic ability.

Let's just say that there are many fine photographers who just happen not to need to earn a living from their photography and that there are many professional photographers who would earn a darn sight more money if they were better photographers.

Nuff said I think.

[BernardLanguillier]

So i ask you, knowing of Hassy's full system, why would anyone go to Pentax? Weather sealing? Maybe, if it's that important to you. Why else? True Focus is proven and it works and works quite well. And their lenses are cheap on the used market.

The issue here is the targeted application. Pentax is clearly targeting landscapers with the 645D, and the question there is more "why would anyone go with the Hassy" since it offers a lot less for a lot more money.

One example, if you shoot in really cold weather there is even no question, the Pentax is so superior in terms of battery life that it is not even close.

Cheers,
Bernard

[BrendanStewart]

since it offers a lot less for a lot more money.

Qualify this statement please. The H4D31 is 13k with lens. The Pentax is slated to be around 10k. with no lens.

One example, if you shoot in really cold weather there is even no question, the Pentax is so superior in terms of battery life that it is not even close.

Batteries are cheap.

[BernardLanguillier]

Qualify this statement please. The H4D31 is 13k with lens. The Pentax is slated to be around 10k. with no lens.

Batteries are cheap.

Well, I would say that you answer might or might not be applicable depending on your applications.

- How much is a H4D battery again?
- How many images does it hold at -15C? As a reference point my former Mamiya ZD did max 10 (yes ten) images per fresh warm battery charge below -10C,
- Have you ever managed a 3 days camping trip in cold weather away from any power source?
- Have you ever slept with batteries stored in your sleeping bag/the pockets of your fleece/jacket?
- Have you ever shot pano with DoF stacking requiring 30 to 100 shots per final image in cold conditions?
- How do you manage the logistics and weight of having to carry potentially tens of batteries in these conditions?
- Are you certain when you purchase a camera that you will never want to do these things?

Thks. Considering that about 5 of my 10 best images of 2009/2010 were shot in such conditions, I know my answers to these questions and I believe that the 645D is a much better option. For landscape work away from the road accross seasons, I see zero rational reasons to consider the Hassy 40MP. You could argue that the 60MP backs are superior... but how good is a great sensor without battery?

Cheers,
Bernard