I posted this over on LL, but thought it was of interest here, too:
There is a lot of focus on the downside for Leica with the "strategic alliance" being called off, but I think that a lot of people don't realize what this may mean for Phase One. Leica is/was their single largest C1 customer. Every D-Lux 4, D-Lux 4 Titanium, M8, and M8.2 ships with a licensed copy of C1. If we figure ~100,000 D-Lux 4s and ~35,000 M8/M8.2s (over the last 2 years), I'm sure that the amount Leica pays Phase for ~135,000 (or more) s/w licensees is not insignificant. This is additional revenue that could disappear in the future. I don't know the details of this deal or the "strategic alliance" that got canceled, but these things work both ways.
Leica's advantage is that the S2, just like the DMR and M8 before it, shoot in the non-proprietary DNG format. This allows almost any RAW processing s/w to work with S2 files off the shelf today. As to what Leica has planned for included s/w is anybody's guess right now. Back at PMA, there was already some discussion of working with Adobe or possibly developing something in-house, so I think Leica has known this relationship with Phase One wasn't really going to work out for some time now. Even back at Photokina in September, the S2 files were being demoed in Lightroom. For the LFI shoot in Germany a few months later, the photographer used Aperture to process his S2 files.
While we may never know all the reasons behind 1) the announcement at Photokina and 2) calling it off some months later, some things are clear.
Phase wanted Leica glass for their Phamiya system. This wasn't going to happen (Leica even said so back at Photokina). Why give away your greatest competitive edge?
Phase wanted to be able to sell the S2 through its sales channels. Again, since Photokina, Leica said that wasn't going to happen either. At PMA in March, the S2 product manager went on record with me that the S2 would only be sold and supported through Leica dealers.
Phase said that they were deeply involved with development of sensor, firmware, etc. on the S2. Leica refuted this 100% the day it was said. The information coming from Phase just wasn't jiving with Leica's reality.
With the S2 being in direct competition with Phase, there were concerns at Leica as to whether Phase would allow C1 to give optimal results for S2 files, or whether they might cripple it in some way.
On the Phase side of things, they don't want to help a clear competitor. Hasselblad, Sinar, and (until the the recent Phase/Leaf deal materializes) Leaf are unsupported in C1 for this reason. With the ZD, an agreement was struck with Mamiya that Phase dealers would have a one-month head start selling the new AFDIII ahead of Mamiya dealers, in exchange for C1 support. They would also be able to brand it for their own use. Clearly, the ZD, with older technology, was not a threat, so adding support for it in C1 was no big deal. The S2 is a different story. Incidentally, before that deal was struck between Mamiya and Phase, the ZD shipped with Lightroom bundled.
Look, C1 is great software. I use it for most of my files. It is missing the Digital Asset Management abilities found Aperture and Lightroom, but I live with that limitation because I really like (and prefer) the quality of the files. If another solution will give me equal quality files, with the added benefit of DAM, I'll be a happy camper. We'll have to see what Leica announces in the coming weeks, but I for one am not surprised by the news. I'm only surprised it was not announced earlier.