[LRflex] Re: New, lower cost lenses, from Leica!

  • From: "Frank Filippone" <red735i@xxxxxxxxxxxxx>
  • To: <leicareflex@xxxxxxxxxxxxx>
  • Date: Sun, 12 Aug 2007 22:25:26 -0700

David... It is not the manufacturing cost reduction ( if there is one) that
is the driver for Leica's lower prices on the Summarits... 

They want to buy market share, expand into new owners, cut the re-purchase
of used lenses:  How can they do that with lenses that sell for $2500 and up
apiece?  They can't.  History tell us they have been unsuccessful.  The
market tells them they have been unsuccessful.  They need a lower priced
line to get new owners to pop for a M7 or M8 with 3-4 NEW lenses.

Optical glass is sold to everyone.... I think I read that 200 types of glass
covers 99% of the designs out there..... or something like that.  Yes,
volume purchase DOES affect price, but not sufficient to justify 10-25 times
the cost of the competition....based upon component cost only.  Labor is
more expensive in Germany than in China.  Again, enough to justify the cost
differential?  I don't; see it.

What they have done is to save a few bucks by limiting the max aperture to
2.5 from 2.0.  A big difference?  I am no optical design engineer, but my
suspicions are that the differences in the final design are small.  Yes,
insisting on NOT using ASPH elements cuts cost a bit.  Again, I think it is
a small % of the selling price.

Taking a hit on GM is the way they have done it.  And they get their reward
by selling lots more lenses, which they figure will recoup the individual
lens GM into a greater overall Margin.

Example... I worked for a company that sold a product at or really below
cost.  Why did they do this?  To keep the line operating at peak efficiency,
they could afford to lose a few bucks on a volume product, but to recapture
the loss by making other products that were more profitable to begin with at
a much higher profit.  It works.

I think your last paragraph is absolutely true....... see below....

What Leica has done is to establish a new way for potential used lens buyers
to purchase new lenses at the same cost.  I think it is brilliant.

Frank Filippone
red735i@xxxxxxxxxxxxx


As for the new Summarit's themselves,  only time will tell if they 
live up to traditional Leica standards.  But, I suspect that they 
will.  The big fear, then, is that the new Summarit's will steal 
sales from the Summicrons. But, if Leica  can sell a Summicron for 
E2250 and a Summarit for E1250, and make, say, 200 Euros on each one 
... it does not matter.  True, sales will decline, but profits will 
stay the same, or even increase - as more people will be able to 
afford the new lenses.  Those who truly "need" the f2 lenses will 
still buy them!
---

David Young,
Logan Lake, CANADA



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