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Author Topic: Pricing of Full Frame Digital cameras  (Read 2608 times)
jd1566
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« on: September 30, 2005, 01:13:34 AM »
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Ok, here are the mathematics...
5D with 13mpixel full frame chip going for $3300
1V film body $1600

Surely 1V film body (the basic chassis of the 1D series) + cost of full frame sensor must be less than the sum of those two! i.e. 3300$+$1600 = $ 4900 (Right about where Nikon is sitting with it's D2X).
Ok people, I realise it's not quite as linear as that, but for me Canon has a HUGE profit margin on their full frame 1D's, enough of a margin to allow other players to start offering similar cameras.. or enough of a margin to start dropping prices a bit more.  The 1DsII is now $7600 at B&H.. thanks for the micro discount Canon, but you can do better than that!
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Giedo
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« Reply #1 on: September 30, 2005, 01:33:29 AM »
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There is no fixed cost price for a given sensor. It has a lot to do with volumes. When Canon starts selling (and thus producing) a lot FF sensors (probably now with the 5D)prices will come down. So you just cannot compare the two...
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Giedo
jd1566
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« Reply #2 on: September 30, 2005, 06:50:32 AM »
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I wasn't trying to compare the two.. just add them up! Yes, there are alot of factors involved, such as first to market advantage (and conseguent premium on the price of the product) volume of units produced, and the fact that as production increases, yields do as well (fewer defects etc).  However, given all of these "excuses", it still seems to me that Canon is milking the full frame game for all it's worth (as is their right), and that Reichmann's assertion that in 2 years we may have FF bodies for $1700 sound more plausible than it may initially appear.  
All this has nothing to do with the art of photography however.. just the cost of getting a decent camera with a decent viewfinder!
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madmanchan
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« Reply #3 on: September 30, 2005, 07:31:54 AM »
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Canon charges as much as they do for their flagship 1Ds II because they can.  While there are alternative tools to choose from, this camera does not yet have a direct competitor.

Eric
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BJL
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« Reply #4 on: September 30, 2005, 03:27:56 PM »
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Quote
... for me Canon has a HUGE profit margin on their full frame 1D's ...
In short, those big 24x36mm sensors are expensive to make. They are about three or more time larger than even the biggest, fanciest, most expensive CPU chips and such, and that unusually large size makes their fabrication rather expensive.

Kodak seemed to cut prices desperately on its Film Format (24x36mm) DSLRs before giving up, getting the price down to US$3,500 after rebate. And those cameras had no low-pass (AA) filter, which apparently saved Kodak some hundreds of dollars on the manufacturing cost. And surprisinlgly, those DSLR aparently sold more units than the 1Ds series (but at lower revenues and profit margins, I am sure), so Kodak had better economies of scale than the 1Ds, but less good that Canon is planning for the 5D.

Since I severely doubt that Kodak was making a high profit margin on those cameras at $3,500, I similarly doubt that Canon is planning to make big margins on the 5D at $3,300.

From what I have read from sources such as Thom Hogan, it is quite likely that the planned 5D production levels will be about enough to occupy a chip fabrication line full time at full capacity, maxing out one of the main cost advantages of higher volumes: optimal utilization of those very expensive fab. lines.

On the other hand, Canon's stated 1Ds production levels of 2,000/month are maybe only about one quarter of full fab. line capacity for a chip of that size, so there is potentially a significant cost of underutilization of fab. lines, raising unit costs.

I imagine that Canon hopes eventualy to use its several 24x36mm products to maximize fab. utilization across the board. It should help if they move to using a single sensor for the "EOS-1 D" product line, instead of the current two separate ones for the 1D and 1Ds.
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howard smith
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« Reply #5 on: September 30, 2005, 04:21:37 PM »
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Profit is the name of the game. Canon doesn't make cameras so you and I can have one. They do it to make money for Canon and Canon stockholders.

Canon doesn't have a right to milk it for all its worth, they have an obligation to their stockholders.

Profit is units times margin. A big margin is a good thing. A company can then give up some margin to increase sales, increase market share or fight off competition.  Drop the price way down (by reducing margin) and you can sell a lot more units.  But if that is more units than you can make, you are losing profits.  You are "giving away the farm."

There is no bigger potential cash cow than a niche market. The company has the only game in town. Canon has a niche market. I have no data, but I would guess that all things considered, hat niche is pretty small. Just because everyone on LL wants a FF, it would do much for Canon if we all tried to buy one. Canon probably is selling all they can make and they really don't care who buys them, as long as someone does. If no one did and, like Kodak, Canon bowed out of FF, I don't think that would put the stock in the can.
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