Hasselblad significantly drops prices.

[Jack]

Just got this directly from Hassy:

What does the new pricing strategy entail?

Simply put, it means lower prices on all Hasselblad digital products. The new, lower price level is based on two primary cornerstones. Firstly, most new high-tech products begin with a high price point, and high-end digital camera products have been no exception. Over time, increased volume and improved production techniques eventually allow lower prices and more accessible products. This is now happening in our industry. We can now produce our cameras at a lower cost and we can pass the savings on to photographers.

Secondly, by significantly lowering the retail price we are able to remove the necessity of a trade-up program, which means that even lower pricing is possible. The end result is a simple and straightforward pricing model which allows us to bring the full range of H3DII cameras, from the entry level H3DII-31 to the new H3DII-50 and upcoming H3DII-60, to photographers at a dramatically lower price. And in addition, as the proud owner of a Hasselblad H3D camera, this means that in the future you will be able to purchase new Hasselblad cameras at a lower cost, and be able to keep your previous camera as a back-up.

For most discerning photographers the only reason not to have a Hasselblad has been that they couldn't afford one. We hope that our new pricing will enable a whole new generation of photographers to experience these amazing cameras.

As I read it I think they've finally realized they need a larger installed base to support any kind of viable business model. And gee, that's such a novel concept; lower prices to sell more units!

Interesting to note that taking in old backs at a discount has apparently meant all this time the cost of the discount was simply pre-added into the retail price of the newest backs, and obviously done in an effort to corner the market --- ZING! However, now that they eliminated that foolishness, coupled with lower manufacturing costs, they're going to keep the prices of the top-end models high (read even larger profit margins) and let the secondhand market determine the price of older backs as they age --- isn't that just what the DSLR manufacturers have been doing all along?

In the end, it is the right move for them to make. However, all of us who bought in at the controlled-entry and artificially-inflated prices -- only to now lose out on future trade-in value -- will no doubt be left with a bad taste in our mouths for a very long time to come...

 

[Guy Mancuso]

This calls for a nap. LOL

 

[Jack]

Guy, I think the point is that *IF* one is considering an upgrade to a larger back, and *IF* their current manufacturer is not Hassy, then they might want to consider doing that upgrade right now...

 

[PeterA]

Jack - the perverse outcome of this move - will be that they sell less in the short term as people wait to see what the competition does with their pricing..then it becomes a game of chicken amongst the competitors - as they all see volumes decline and they start to sweat..teh economic conditions dont help either.

Just noticed Yair's past re Sinar?Leaf 'co-operation'.

The pennies are dropping clunk clunk clunk - mergers and consolidations underway. WOW - people will now just get more confused as levels of distrust of marketing BS explode. There is no certainty about who is going to be left standing or what the product ranges will end up looking like - and who is going to end up supporting what....

gentlemen - Caveat Emptor.

 

[woodyspedden]

Jack - the perverse outcome of this move - will be that they sell less in the short term as people wait to see what the competition does with their pricing..then it becomes a game of chicken amongst the competitors - as they all see volumes decline and they start to sweat..teh economic conditions dont help either.

Just noticed Yair's past re Sinar?Leaf 'co-operation'.

The pennies are dropping clunk clunk clunk - mergers and consolidations underway. WOW - people will now just get more confused as levels of distrust of marketing BS explode. There is no certainty about who is going to be left standing or what the product ranges will end up looking like - and who is going to end up supporting what....

gentlemen - Caveat Emptor.

Peter

I agree (mostly) but sometimes I think it is Caveat Pre-Emptor! LOL) Sorry for the silly but I could not resist

Best

Woody

 

[dfarkas]

Off the record, I talked to a guy at the show who is a national ditributor for a country in the EU (let's leave it at that) about the price drops. Many in the distibution network are not in favor of this move. All it does is erode revenue and margin. High end gear like this has low margins to begin with (contrary to what end-users believe). In order to maintain the same margins at Hassy they don't need to double their sales - they need to triple them at the new prices!

Ouch. That means, in order to pull ahead profit wise, Hassy needs to sell 4 times as many cameras as they are now. That is a lot of sales growth. As this gentleman put it, if the demand curve isn't elastic, they are screwed. Economics 101. He wasn't sure how Hassy was financing the deal, as this requires a large cash outlay that they just don't have.

Bottom line: this is an extremely risky move on Hassy's part. And current users who recently bought systems like Woody are left holding the depreciation.

David

 

[PeterA]

Oh well maybe they will force Hasselblad uses to trade up in order to be able to use a bunch of new lenses specifically made for the larger chips - it kinda worked with the 28 maybe it will work again. Lots of maybes.

There is one certainty - I wont be 'upgrading from teh 39 megapixel camera I have now - and I am relaxed enough to write off my back when it stops working and sell my lenses then for whatever they are worth. I dont need to buy any new fangled lens for any new fangled chip - that one wont work on me again.

The S2 is looking better all the time delivers focal plane and Leaf shutter - the H3D11-39 should last a year....the Phase back will go on Mamiya/ Alpa and any view camera. So i am relaxed. and will now enjoy the Hasselblad show from the sidelines -

 

[Jack]

Indeed. "Fool me once, shame on you. Fool me twice...."

 

[robmac]

Something (and no, it wasn't the specter of the S2..;>) prompted Hasselblad/Imacon (and their holding company) to precipitate a MFDB price war. Over the the next x months we'll see a press release from someone that will drop in like the key piece in a jigsaw puzzle.

 

[EH21]

I wonder if that's really true? Because their marketing and development costs (software and firmware is not cheap) are fixed. Also some of the tooling and manufacturing costs are as well. Even the per unit costs such as sensor chips can scale quite a bit depending on volume. I'll bet that Hasselblad has forseen uncertain economy and wagered that this was the time to gain market dominance and was in good enough financial position to do it. Certainly the price drops have made me think twice about switching from Rollei to H.

Off the record, I talked to a guy at the show who is a national ditributor for a country in the EU (let's leave it at that) about the price drops. Many in the distibution network are not in favor of this move. All it does is erode revenue and margin. High end gear like this has low margins to begin with (contrary to what end-users believe). In order to maintain the same margins at Hassy they don't need to double their sales - they need to triple them at the new prices!

Ouch. That means, in order to pull ahead profit wise, Hassy needs to sell 4 times as many cameras as they are now. That is a lot of sales growth. As this gentleman put it, if the demand curve isn't elastic, they are screwed. Economics 101. He wasn't sure how Hassy was financing the deal, as this requires a large cash outlay that they just don't have.

Bottom line: this is an extremely risky move on Hassy's part. And current users who recently bought systems like Woody are left holding the depreciation.

David

 

[pcunite]

Something (and no, it wasn't the specter of the S2..;>) prompted Hasselblad/Imacon (and their holding company) to precipitate a MFDB price war. Over the the next x months we'll see a press release from someone that will drop in like the key piece in a jigsaw puzzle.

Yes... Canon or Nikon wants to join the picnic...

 

[Jack]

Another thought is maybe Hassy has decided to abandon their closed system approach? That might explain a desire to "clear out" existing inventory...

 

[robmac]

The move away from a closed system would be interesting - and cause a hell of a stir to say the least. There is also the possibility they want to change the form factor of all or part of the H3 line..

 

[carstenw]

Indeed. "Fool me once, shame on you. Fool me twice...."

can't get fooled again!

 

[carstenw]

Something (and no, it wasn't the specter of the S2..;>) prompted Hasselblad/Imacon (and their holding company) to precipitate a MFDB price war. Over the the next x months we'll see a press release from someone that will drop in like the key piece in a jigsaw puzzle.

Why don't you think that the 21MP 1Ds3, the $3000 A900 and 5D2, and the entry of Sinar/Rollei/Leaf into the MF market is to blame? They could hardly have expected Leica's entry, but if they had, trying to squeeze them with a price drop would also make sense.

 

[carstenw]

A price signal of 40% is a pretty big signal in competitive markets - this is a declaration of war amongst the manufacturers - and recent purchasers are just suffering some collateral damage. Sure we will benefit from lower pricing for teh next purchase...ahem assuming there will be a next purchase .:ROTFL:

Hasselblad has made a really strange move here. Perhaps they are sitting pretty financially, and are making a pre-emptive strike against Rollei/Sinar/Leaf/Leica/Canikon. I am sceptical, however.

Putting price pressure on others also means pressure from below from second-hand equipment. By abandoning the trade-up strategy, they are letting the second-hand equipment market flourish, and since these backs are made to last, they will be around for a long time (like Leica's old M lenses). They could try to kill this market by dropping support and/or reducing parts availability, but that would make them even more unpopular. Phase backs would look a lot more attractive in that scenario, which would mean that Hasselblad would not sell any more H3s.

And adding value to new backs could be hard. Given that each pro photographer has specific needs, and a certain budget, the existence of 39MP backs on the second-hand market could seriously put a damper on anyone's need/desire to upgrade to 50. I mean, how much extra resolution is that anyway, <10% linear? What premium will anyone want to pay on that? How many people will choose 39MP as their final stop?


I personally think that one thing will come back to haunt Hasselblad: they are probably the least favorite manufacturer at the moment, due to the H1->H2->H3 transitions, going proprietary after people bought into their system, and then giving photographers who know better a line of B.S. about "optimizing" the 28mm in software being a good thing (Leica will let the air out of that particular balloon, thankfully), and now giving massive price-drops with no warning, and no recourse for recent purchasers of gear. In other words, if the switch from one manufacturer to another becomes easier due to lower prices overall, Hasselblad is probably the first company which will lose.

 

[robmac]

In an earlier post I mentioned it was a competitive move against Phamiya, Sinar,etc, - but also to keep the gap between the ever plunging price/performance gap of uber-DSLRs (with the advent of the $2500 21MP FF body) and at least entry level MFDBs from getting to large.

As for the S2 - putting pricing pressure on Leica this early is nothing but a pleasant side-effect from Hassy's perspective. The S2 is ONLY a competitor when it is out there and selling - were almost a year away from that happening. A year in DSLR (and now MFDB) land is a lifetime from a competitive aspect.

In addition, despite the S2's tech strengths, the biggest threat it faces to gaining any traction with pros (vs. just well-healed gearheads) and thus posing ANY threat isn't Hassy, Phamiya, etc - it's Leica and what it does or doesn't do re: S&S, teething problems, etc.

Success for the S2 is it being mentioned in the same breath as an option by Hassy, Sinar and Phamiya buyers. Failure is it being relegated to discussion on Leica-centric gear forums only.

tech strengths aside, they can't afford the S2 becoming positioned in the market like another M8 or DMR (small production, niche brand-loyal customers). If they pull-it off in the pro market (NOT just x units sold to Leicaphiles) it will remake Leica. If they drop the ball....

The big questions between now and summer of '10 are when will CanNikon enter the 'tweener market and how much damage will they do to the S2's price/performance curve -- and MFDB pricing?

Also, does Hassy have something cooking that compelled them to lose some inventory that could change the game once again - or do they know of a threat coming that we don't?

Like a bloody soap opera.

Why don't you think that the 21MP 1Ds3, the $3000 A900 and 5D2, and the entry of Sinar/Rollei/Leaf into the MF market is to blame? They could hardly have expected Leica's entry, but if they had, trying to squeeze them with a price drop would also make sense.

 

[robmac]

As for the impact on buyers of late from the Hassy drops, I feel for folks like Woody, etc.

Given the $$$ involved and drama of the move in a staid market like MF, some sort of protection for ambushed buyers, at least at the start of what is the MFDB segment's slide into DSLR market dynamics would go a long way to retain customer loyalty.

Welcome to the world of teh 1Ds3 in MFDB land. Buy it for $8000 now and have the rug pulled out from under your resale value shortly thereafter with a $2500 competitor - from the same company.

No trade-in program, no credit towards squat, no apologies and no 1/2 bottle of Pinot Noir beforehand.

The more pros that opt for or consider uber-DSLRs due to price vs. MFDB and/or clamor for more DSLR-like features in their MF kit, the more they are forcing folks like Hassy, etc to start treating MFDB like honkin' DSLRs: fast model churn, stepwise price drops, startling depreciation in the used market, limited trade-up programs, etc. Wait until the #$%^ engineering creep starts and they saddle your back with 101 useless 'neat' features.

 

[Ben Rubinstein]

Given the potential market for the S2 and these price drops which are sure to precipitate a price war, what is there to pursuade Canon or Nikon to enter such a tiny market? Once Nikon get's the D3x out why wouldn't the big two concentrate on their current product lines with perhaps improvements to noise, DR, etc rather than tooling up an entire product line for sales which are in the magnitude of thousands worldwide rather than the probable 100,000's which the 5D mkII/1Ds mkIII or D700/D3x market, selling to a current user base with an investment in lenses. Given the current (relatively) tiny MFDB market and even tinier 'tweener' market, I just don't see them bothering. Canon may want to sell more megapixels in the 1Ds mkVI but selling a new lens line isn't going to do it IMO, people buy a Canon for the convenience and cost over a MF solution.

 

[Guy Mancuso]

Actually Canon and Nikon should honestly stay out of it. they have the market tied up in 35mm , making a expansion above that size is a major investment and actually more competition from Hassy, Phase and Sinar in that market plus let's add Leica to that now. BUT Canon and NIKON are huge companies that can spare the millions to do it, so they may try it if they feel there losing market share in 35mm. It's all about market share and what the can get from the competition and how to make share holders happy. Bottom line it is a three word answer ( Share Holder Value)