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Author Topic: why is mfdb still so expensive?  (Read 17395 times)
dustblue
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« on: September 09, 2008, 12:17:10 PM »
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I heard (I believe thierry said so too) that nowdays a ccd costs only 1/10th the final price of a mfdb, so why is the mfdb still so expensive? just because R&D cost and small scale business? Or the mfdb makers have some secret agreement about the price?
Anyone have some ideas?
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bcooter
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« Reply #1 on: September 09, 2008, 12:53:11 PM »
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Anyone have some ideas?
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the dealer markup the high costs and the model of the complete medium format business.

there is not so much free choice when the user is buying.  most markets are controlled by one dealer and maybe some time two so the competition is small and the dealers get angry if someone from outside sells to their market.

they get more angry if you buy into other countries that may be less money.

the purpose of used cameras to go back to the maker and then recycled back into the dealers to compete at the low end.   this makes the low end even controlled.

the goal of medium format is not to only be a sale of the camera.  it is to be the sale of having the user buy all the system and then the shooter cannot get change to a different medium format without a big money loss.   so to not take the big money loss it costs less to make a upgrade to a new digital back from the same makers.  this keeps most all the used equipment with the makers and the makers dealers.

it is also the new way of complete camera and backs.  if you change from sinar to hasselblad you will have to change everything and this is very high in money loss.

it is also the reason that many of the makers will only build a contax mount at the very end after they make mounts for their own new cameras.   the makers want very much the contax and the older camera to go away so they can contol the complete front and back and if they do not go away then they will find ways to make it so.

this is why you see so few of the shooters change from one camera to the next camera.

if they do change it is usually to the canon or maybe soon to the new big nikon.

someday some maker will break free of this system and offer low prices and less markup.  then it will all be less in expense and other makers will have to be the same.

now every medium format maker works very hard to keep you living within their house.
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tom_l
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« Reply #2 on: September 09, 2008, 01:10:01 PM »
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it is also the reason that many of the makers will only build a contax mount at the very end after they make mounts for their own new cameras.   the makers want very much the contax and the older camera to go away so they can contol the complete front and back and if they do not go away then they will find ways to make it so.

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Hm, not sure about that,
The old V-Mount is often the first mount available from manufacturer for a new back.


Tom
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thsinar
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« Reply #3 on: September 09, 2008, 01:33:57 PM »
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Yes, there is a secret understanding among the manufacturers. Actually something JR had already revealed, a few months back, here on LL. During these meetings, hold twice a year each time at a different location, the prices are decided and agreed among them, with the very valuable help of some invited "guests" (read well-known photographers) who help them to find out what prices are still acceptable by the potential customers/endusers. The last meeting, as you might know, was just hold a couple of weeks ago (Photokina soon).

And on a more serious note:

There are dedicated people working in those companies, whose bread depends on the service they provide to their customers. I know personally some of them, daily fighting for the users to satisfy their needs and support them whenever they need it, outside their working hours. It is a bit sad, for all these committed and hard-working people, to read such non-sense sometimes. A business-orientated company has however some rules to function adequately and to be able to survive, one of it being to calculate the right and necessary margins to be able to pay its employees, the invoices and possibly also to make some profit to be able to invest in new projects. When prices are set, it is with having these rules in mind, certainly not to "milk-out" the customers. And yes, we are more than happy if we can keep a customer with us, investing in new equipment when he needs it, but it seems to me that this can be achieved only if one provides a prefect service and support to these customers.

Sorry for reacting may be a bit strongly, but I feel it necessary to be said, with the risk of being "countered" by some.

Best regards,
Thierry

PS - edited for addendum: the same applies to the dealers and distributors, who are mostly hard-working and knowledgeable people.
« Last Edit: September 09, 2008, 01:43:46 PM by thsinar » Logged

Thierry Hagenauer
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« Reply #4 on: September 09, 2008, 01:38:01 PM »
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I got into a really extended discussion about this with some guys at Leaf a few years ago, guys on the inside that I very much trust, and the bottom line is that the CCD is not that cheap.  Nowhere near 1/10th.  At that time, the CCD going into a 12K camera was about 7K, I think it was the Valeo 11 or something.  

Also as far as today's really big chips goes, when chips get bigger, the cost goes up geometrically because of the manufacturing process.  

Another thing is the silicon wafer market is very strictly controlled by the feds.  They are literally limited to what they can buy, so the DOD can get its mitts on chips...  the guys went off on that one for a bit too.
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Ted Dillard
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« Reply #5 on: September 09, 2008, 01:41:57 PM »
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You know how much you have to pay for these elves by the hour now.  
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dustblue
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« Reply #6 on: September 09, 2008, 02:18:00 PM »
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Actually you don't have to be so angry. Hard working guys like you always deserve respects, I think most profit is in the stockholders' pockets, whom decide everything.

I just want to know the components of the final price, like hardware 50%, R and D 50%, etc. And after we know that, we'll see if small scale is the main reason for the high mfdb price.

For example if the hardware:R&D is 3:7, then a 10 times bigger market will end up with roughly half the price; but if hardware:R&D is 7:3, then a 10 times bigger market just may reduce it's 20% price.



Quote
Yes, there is a secret understanding among the manufacturers. Actually something JR had already revealed, a few months back, here on LL. During these meetings, hold twice a year each time at a different location, the prices are decided and agreed among them, with the very valuable help of some invited "guests" (read well-known photographers) who help them to find out what prices are still acceptable by the potential customers/endusers. The last meeting, as you might know, was just hold a couple of weeks ago (Photokina soon).

And on a more serious note:

There are dedicated people working in those companies, whose bread depends on the service they provide to their customers. I know personally some of them, daily fighting for the users to satisfy their needs and support them whenever they need it, outside their working hours. It is a bit sad, for all these committed and hard-working people, to read such non-sense sometimes. A business-orientated company has however some rules to function adequately and to be able to survive, one of it being to calculate the right and necessary margins to be able to pay its employees, the invoices and possibly also to make some profit to be able to invest in new projects. When prices are set, it is with having these rules in mind, certainly not to "milk-out" the customers. And yes, we are more than happy if we can keep a customer with us, investing in new equipment when he needs it, but it seems to me that this can be achieved only if one provides a prefect service and support to these customers.

Sorry for reacting may be a bit strongly, but I feel it necessary to be said, with the risk of being "countered" by some.

Best regards,
Thierry

PS - edited for addendum: the same applies to the dealers and distributors, who are mostly hard-working and knowledgeable people.
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James R Russell
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« Reply #7 on: September 09, 2008, 02:24:02 PM »
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PS - edited for addendum: the same applies to the dealers and distributors, who are mostly hard-working and knowledgeable people.
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I don't think you have to look far at any segment of the professional photography industry and not understand very quickly that most people involved are hard working and well intentioned.

Medium format needs to be a less controlling and just plain easier to test, review, buy, use and sell.

JR
« Last Edit: September 09, 2008, 10:43:11 PM by James R Russell » Logged

dustblue
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« Reply #8 on: September 09, 2008, 03:26:57 PM »
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What about the services for used dbs? Anyone got a clue? If db makers want to sell more new backs or refurbished backs they have the reason to refuse to provide service for used backs, or charge unreasonable prices for repairing used backs.


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If you want to hear about depreciation for photo stuff, ask some service bureau owners about the $200K+ drum scanners they can't even give away now. There is a high premium on the high end, low volume industry gear. That hasn't changed and won't most likely. Just what the actual items will change.

Reports just a few years back were that the 22MP sensors purchased in bulk might have been $5K or more per sensor. When the entire MFDB industry only sells maybe 10K units a year, I wouldn't expect prices to follow the normal electronics trends of the last few decades. Canon and Nikon make millions of DSLRs a year. That affords them lower and lower sensor costs.

I don't know what back you want, but I see reasonably priced backs on the used market all the time. A P45+ going for $18K is a great price for the second buyer but has to hurt for the original one who spent $32K just in the last 2 years.

If you use a Mac, download GarageBuy to keep an eye on ebay searches for digital backs. Just make searches for any search phrases you can think of and weekly you'll see good deals from reputable sellers.

As more new backs come on the market, people will sell their previous gear directly to get more money than a trade-in. Take advantage of some good deals.
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thsinar
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« Reply #9 on: September 09, 2008, 10:44:12 PM »
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I found it funny too, James. That's why it is still in my mind and the reason why I mentioned it.

Thierry

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Also keep in mind the joke I made about meeting in an undisclosed location was a joke, one I think quite funny as thinking about Dick Cheny talking about medium format backs puts a smile on my face.

JR
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Thierry Hagenauer
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« Reply #10 on: September 09, 2008, 11:01:14 PM »
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Dustblue,

Am not angry at all.

These companies are profit-orientated companies, like in all business: if they make money to break-even (not writing down a loss) they survive, if they make money to have a little or big profit and they survive longer, if they loose money for years they shall disappear. This is true for ANY of the current MFDB manufacturers.

My point is: it happens more than often that these companies are presented as "thieves" with bad-intentioned people to get as much money as possible out of a customer. For having worked in this industry for nearly 20 years, I can say that there are other ethics governing our mind and behaviour when it comes to our customers. I know this from the company I am working for, and believe it to be true as well for others.

Best regards,
Thierry

Quote
Actually you don't have to be so angry. Hard working guys like you always deserve respects, I think most profit is in the stockholders' pockets, whom decide everything.

I just want to know the components of the final price, like hardware 50%, R and D 50%, etc. And after we know that, we'll see if small scale is the main reason for the high mfdb price.

For example if the hardware:R&D is 3:7, then a 10 times bigger market will end up with roughly half the price; but if hardware:R&D is 7:3, then a 10 times bigger market just may reduce it's 20% price.
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Thierry Hagenauer
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« Reply #11 on: September 10, 2008, 05:29:43 AM »
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Just wanted to chime in, in defense of dealers too, having lived in those shoes for a while...

To be an authorized dealer for any of these brands, you are required to buy a minimum of product as demo.  You do get a fairly good discount, and after a set time you may sell it as demo, but it is a staggering investment, especially for a small shop.  

Add to that the fact the the markup is very small, despite what you may believe, and the costs to finance this stuff (most small dealers have to buy this stuff on credit...)  and it boils down to, you have to sell a crap-ton of these $20+ K products to pay for the investment to be allowed to sell them in the first place.  

Like photographers and the manufacturers, the dealers are trying to stay in business, against some pretty tough odds...  keep that in the back of your mind.  

I also want to echo the praise of Leaf support, as well as Hasselblad.  Those guys are the best in the business (that business being imaging electronics...  I'm sure Phase and Sinar are right up there, but I have no personal experience.)

I think the Hasselblad (Imacon) guys are still shaking their heads at the mention of my name...  (the world's first digitally-modified Holga, using an Imacon Ixpress 96.)  But they still support it!

holy crap, I found the link: http://www.teddillard.com/2008/05/history-digital-holga.html
« Last Edit: September 10, 2008, 05:31:50 AM by teddillard » Logged

Ted Dillard
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« Reply #12 on: September 10, 2008, 05:52:52 AM »
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Hahaha Ted... i actually googled up your modified holga about a week ago. Talk about a small world =)

To be on topic though Ted is spot on here. The market for medium format have never been as large and i dare say will never be as large as the 35mm market. It was true with film when the difference in investment was less and it's definately true now.

For us who can't afford a new back and doesnt have the client base yet to lease one, there is always the used market. Its a very small market right now but it is there.

Me i think we wont see cheaper digital medium format cameras anytime soon since a lot of you buy in is investment in a service (or at least its going that way). And knowing that you will always have a camera to shoot a job with regardless if the studio blows up or not is worth quite a lot of money.

It can be frustrating however for us who do not want to rent it unless a client pays and do not wish to spent $1000 / month leasing one but STILL want to shoot medium format digitally and i believe those are often the once voicing their wish for cheaper backs. But as i said before, our way out is either to shoot film and scan or to get a older used digital back. In the end its the old supply & demand that comes into play again and demand is unfortunately very limited and so is actually supply, at least if you compare to a mass market like digital small format.

Personally i hope i can get my first digital back in a few days when my client pays the last invoices i sent out

/Henrik

Quote
Just wanted to chime in, in defense of dealers too, having lived in those shoes for a while...

To be an authorized dealer for any of these brands, you are required to buy a minimum of product as demo.  You do get a fairly good discount, and after a set time you may sell it as demo, but it is a staggering investment, especially for a small shop. 

Add to that the fact the the markup is very small, despite what you may believe, and the costs to finance this stuff (most small dealers have to buy this stuff on credit...)  and it boils down to, you have to sell a crap-ton of these $20+ K products to pay for the investment to be allowed to sell them in the first place. 

Like photographers and the manufacturers, the dealers are trying to stay in business, against some pretty tough odds...  keep that in the back of your mind. 

I also want to echo the praise of Leaf support, as well as Hasselblad.  Those guys are the best in the business (that business being imaging electronics...  I'm sure Phase and Sinar are right up there, but I have no personal experience.)

I think the Hasselblad (Imacon) guys are still shaking their heads at the mention of my name...  (the world's first digitally-modified Holga, using an Imacon Ixpress 96.)  But they still support it!

holy crap, I found the link: http://www.teddillard.com/2008/05/history-digital-holga.html
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Gigi
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« Reply #13 on: September 10, 2008, 06:39:05 AM »
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Yes, there is a secret understanding among the manufacturers. Actually something JR had already revealed, a few months back, here on LL. During these meetings, hold twice a year each time at a different location, the prices are decided and agreed among them, with the very valuable help of some invited "guests" (read well-known photographers) who help them to find out what prices are still acceptable by the potential customers/endusers. The last meeting, as you might know, was just hold a couple of weeks ago (Photokina soon).

And on a more serious note:

There are dedicated people working in those companies, whose bread depends on the service they provide to their customers. I know personally some of them, daily fighting for the users to satisfy their needs and support them whenever they need it, outside their working hours. It is a bit sad, for all these committed and hard-working people, to read such non-sense sometimes. A business-orientated company has however some rules to function adequately and to be able to survive, one of it being to calculate the right and necessary margins to be able to pay its employees, the invoices and possibly also to make some profit to be able to invest in new projects. When prices are set, it is with having these rules in mind, certainly not to "milk-out" the customers. And yes, we are more than happy if we can keep a customer with us, investing in new equipment when he needs it, but it seems to me that this can be achieved only if one provides a prefect service and support to these customers.

Sorry for reacting may be a bit strongly, but I feel it necessary to be said, with the risk of being "countered" by some.

Best regards,
Thierry

PS - edited for addendum: the same applies to the dealers and distributors, who are mostly hard-working and knowledgeable people.
[a href=\"index.php?act=findpost&pid=220398\"][{POST_SNAPBACK}][/a]

Thierry -

Just for the record, could you please confirm the first paragraph is meant to be sarcastic, and not to be taken seriously. Seems silly to ask this, but these are strange times we live in....

Geoff
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Geoff
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« Reply #14 on: September 10, 2008, 06:49:39 AM »
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Dear Geoff,

I was with the belief that my sentence "And on a more serious note" would make it clear.

Yes, I was sarcastic, confirmed. I can't even imagine how such "agreements" on prices between manufacturers could be possible, even less how someone could believe such does exist.

Best regards,
Thierry

Quote
Thierry -

Just for the record, could you please confirm the first paragraph is meant to be sarcastic, and not to be taken seriously. Seems silly to ask this, but these are strange times we live in....

Geoff
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Thierry Hagenauer
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« Reply #15 on: September 10, 2008, 07:58:42 AM »
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Yes if it were true it would  illegal and called price fixing

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Dear Geoff,

I was with the belief that my sentence "And on a more serious note" would make it clear.

Yes, I was sarcastic, confirmed. I can't even imagine how such "agreements" on prices between manufacturers could be possible, even less how someone could believe such does exist.

Best regards,
Thierry
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teddillard
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« Reply #16 on: September 10, 2008, 08:13:19 AM »
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...

Medium format needs to be a less controlling and just plain easier to test, review, buy, use and sell.

JR
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FWIW, and with a mild interest in self-promotion, I wanted to just drop the note now that one of the projects I'm working on right now is a new, and unique digital camera review site, one that includes detailed reviews of the big digital backs as well as shooting impressions.  

There's not a lot out there like what we're planning, and I hope it adresses just this issue.  

Updates when it goes live...
« Last Edit: September 10, 2008, 08:15:35 AM by teddillard » Logged

Ted Dillard
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« Reply #17 on: September 10, 2008, 08:50:27 AM »
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Ted. Need any reviewers?
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revaaron
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« Reply #18 on: September 10, 2008, 09:39:58 AM »
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easy: low demand to limited market on a high R&D product

1 CCD or CMOS is INSANELY expensive to make. the reason you see them as "cheap" is because replication is cheap.
$10 million to develop a sensor with a $200 per sensor to replicate is expensive if you are only making 10K of them.  make 10 million of them and the price drops to $201 per sensor.
« Last Edit: September 10, 2008, 09:42:50 AM by revaaron » Logged

teddillard
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« Reply #19 on: September 10, 2008, 10:12:44 AM »
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easy: low demand to limited market on a high R&D product

1 CCD or CMOS is INSANELY expensive to make. the reason you see them as "cheap" is because replication is cheap.
$10 million to develop a sensor with a $200 per sensor to replicate is expensive if you are only making 10K of them.  make 10 million of them and the price drops to $201 per sensor.
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...also there's the hard, plain math that is in play.  You make CCD's from a circular wafer.  Like cutting circles from plywood (the reverse geometry, but just as much a factor), a small increase in size can increase the waste, thus the cost, enormously.  Little tiny CCDs for little tiny cameras use the wafer real estate more efficiently.

For more than you ever wanted to know, check this site:
[a href=\"http://wfc3.gsfc.nasa.gov/MARCONI/manufacture.html]http://wfc3.gsfc.nasa.gov/MARCONI/manufacture.html[/url]
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Ted Dillard
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