IQ5 rumors

[Paul Spinnler]

I wouldn't fault private equity for the decision to disinvest in the medium format digital camera system business. A PE firm, Silverfleet, acquired 60% of Phase in 2014. The XF camera system was intro in 2015 and my sense is that it has been a debacle in terms of ROI, and who knows how much of the considerable R&D was written off. Phase was sold to another PE investor in 2019, three years after Fuji and Hasselblad upended the market. Phase was left without a competitive offeringand the very high end of the market became an extremely difficult sell. After watching what happened with the XF, the idea of investing major capital to try to compete with Fuji and Hasselblad just did not make good sense. Phase management likely agreed.

I disagree:

When Silverfleet handed the business to Accel, Phase One had just launched the IQ4 and XT, and the photo business was thriving. This growth story prompted me to invest heavily, acquiring the IQ4, XT, and later the XF with the excellent 80 MK II lens. The 2018/19 period marked a high point for the company.

However, the new investors faced immediate challenges with the onset of COVID-19 in 2020. They lacked the foresight / willingness to invest in mirrorless technology, as Steve suggested, and gradually shifted focus towards aerospatial and cultural heritage sectors as it was seen as the most profitable thing to do at the time. Accel's management decisions, including inventory relocation, dismantling of direct sales representatives, and significant price hikes, led to a deteriorating customer experience for the high-touch P1 photo clientele and were classic PE profit engineering moves. Spinning off C1 led to internal at arm's length invoicing, so no more development for IQ4 ... because C1 was re-positioned as Lightroom competitor with all resources flowing into features of little primary concern for IQ4 owners leading to an unsatisfying wireless tethering solution to this day, as well as broken promises around the usefulness of metadata recording in C1 post-processing for XT files – I partially invested in XT to finally get rid of color cast management in post, at least it was insinuated that this was coming.

The XT tilt upgrade lens issue particularly irked customers, exemplifying the photo division's mismanagement and unmasking the XT as an unfinished product which was rushed to market while negotiations between the PE players were ongoing. Ie it is really, really not smart to release a system with a non-Copal compliant shutter height and exclude tilt from the design spec in order to get it out onto the market. The early XT customers are those suffering from these conceptual system design flaws which were remedied only over many years as management couldn't ignore the market's feedback on tilt being essential.

Accel's mistake was not investing enough in the business during recent years and seeing it primarily as a decreasing cash cow business in terms of capital allocation; even an IQ4+ would have been a viable stopgap. The product manager likely had limited resources compared to other business units, and the aggressive XT strategy nearly bankrupted Alpa, a key ecosystem partner (Alpa was acquired by a new owner in the meantime who saved the business).

Fortunately, Phase One's B2B business remains strong. The company's efforts to address XT problems, release the XC, and develop the IQ5 offer hope for their continued presence in photography. Phase One's legendary brand value in the industry is a significant asset they should leverage.

To regain trust and boost sales, Phase One needs to offer competitive deals on new products, especially for older IQ owners looking to upgrade. Pricing above USD 25k with trade-in won't be viable, so they need to watch out on the pricing strategy, and they must address the XT lens debacle to repair customer relationships.

One source (besides changing market) of these issues lies with private equity investors' overly strong focus on short-term metrics, overlooking the long-term impacts of their decisions. Starving the Photo Division may have yielded immediate results but has had unforeseen negative effects on the core customer base, compounded by competition and a radically different environment for commercial photographers.

Despite these challenges, I'm eagerly anticipating the IQ5 and hope to upgrade all my equipment if Phase One addresses key issues and reinvests in their photographic line. One key thing they should really do to not miss out on the mirrorless train is at least add a sensible EVF solution for the next gen - that would make the 23 and 40 XC at least half way useable.

I do expect some goodwill on the XT tilt lens upgrade front, paying 13k for a gen 1 90 XT tilt means I do not want to spend more than 3k to get it to a tiltable variant. I am sure other XT lens owners also would like to upgrade, but find the current trade in policies inacceptable – they need to fix this.

 

[hcubell]

I disagree:

When Silverfleet handed the business to Accel, Phase One had just launched the IQ4 and XT, and the photo business was thriving. This growth story prompted me to invest heavily, acquiring the IQ4, XT, and later the XF with the excellent 80 MK II lens. The 2018/19 period marked a high point for the company.

However, the new investors faced immediate challenges with the onset of COVID-19 in 2020. They lacked the foresight / willingness to invest in mirrorless technology, as Steve suggested, and gradually shifted focus towards aerospatial and cultural heritage sectors as it was seen as the most profitable thing to do at the time. Accel's management decisions, including inventory relocation, dismantling of direct sales representatives, and significant price hikes, led to a deteriorating customer experience for the high-touch P1 photo clientele and were classic PE profit engineering moves. Spinning off C1 led to internal at arm's length invoicing, so no more development for IQ4 ... because C1 was re-positioned as Lightroom competitor with all resources flowing into features of little primary concern for IQ4 owners leading to an unsatisfying wireless tethering solution to this day, as well as broken promises around the usefulness of metadata recording in C1 post-processing for XT files – I partially invested in XT to finally get rid of color cast management in post, at least it was insinuated that this was coming.

The XT tilt upgrade lens issue particularly irked customers, exemplifying the photo division's mismanagement and unmasking the XT as an unfinished product which was rushed to market while negotiations between the PE players were ongoing. Ie it is really, really not smart to release a system with a non-Copal compliant shutter diameter and exclude tilt from the design spec in order to get it out onto the market. The early XT customers are those suffering from these conceptual system design flaws which were remedied only over many years as management couldn't ignore the market's feedback on tilt being essential.

Accel's mistake was not investing enough in the business during recent years and see it as a decreasing cash cow business; even an IQ4+ would have been a viable stopgap. The product manager likely had limited resources compared to other business units, and the aggressive XT strategy nearly bankrupted Alpa, a key ecosystem partner (Alpa was acquired by a new owner in the meantime who saved the business).

Fortunately, Phase One's B2B business remains strong. The company's efforts to address XT problems, release the XC, and develop the IQ5 offer hope for their continued presence in photography. Phase One's legendary brand value in the industry is a significant asset they should leverage.

To regain trust and boost sales, Phase One needs to offer competitive deals on new products, especially for older IQ owners looking to upgrade. Pricing above USD 25k with trade-in won't be viable, so they need to watch out on the pricing strategy, and they must address the XT lens debacle to repair customer relationships.

One source (besides changing market) of these issues lies with private equity investors' overly strong focus on short-term metrics, overlooking the long-term impacts of their decisions. Starving the Photo Division may have yielded immediate results but has had unforeseen negative effects on the core customer base, compounded by competition and a radically different environment for commercial photographers.

Despite these challenges, I'm eagerly anticipating the IQ5 and hope to upgrade all my equipment if Phase One addresses key issues and reinvests in their photographic line. One key thing they should really do to not miss out on the mirrorless train is at least add a sensible EVF solution for the next gen - that would make the 23 and 40 XC at least half way useable.

I do expect some goodwill on the XT tilt lens upgrade front, paying 13k for a gen 1 90 XT tilt means I do not want to spend more than 3k to get it to a tiltable variant. I am sure other XT lens owners also would like to upgrade, but find the current trade in policies inacceptable – they need to fix this.

Your description of the role of the private equity investors in the decline of Phase's consumer photography hardware business relies upon a tired old playbook about the evils of private equity. I think you are confusing your own priorities with respect to product development and pricing with the priorities of those who own/manage the business. I expect that they understand their business and the competitive environment in which it operates far better than you do. Moreover, private equity investors do not micromanage a business and decide things like how much to charge for a tilt upgrade. They rely upon the talents of capable management. If the management proves not to be capable, the role of private equity investor is to assist in finding new managers. Phase has had very capable management, and I think they continued to own 40% of the business after Silverfleet acquired control in 2014. That management team had always focused on positioning Phase's hardware business at the very top end of the market, and it worked well for many years. However, the medium format digital photography market has changed radically in the last 8 years and the very top end of the market became a very tiny niche area for them. It's probably crazy from a ROI perspective to invest any material amount of capital in that segment. Looking at the pace and type of product introductions, Phase apparently reached that conclusion. Developing tech cameras and $50,000 digital backs for them and for a large, heavy DSLR is not a good business model today.
Was their decision not to develop a competitive mirrorless camera body and line of lenses back in 2016-2020 a mistake in retrospect? Who can say? What we can say that is that Phase had just introduced a new DSLR after investing what we have to assume was millions of dollars. I think they also saw (and hoped that) the software side of the business would be the future engine of growth. The demise of MaMiya, Contax, and Bronica, and the fact that Hasselblad was on life support, were well known and object lessons for any company in the same space.

 

[georgecleansman]

It would have been good for all photographers if DJI or Accel or a third private equity investor had bought Phase One and Hasselblad and merged them.

P1 and Hasselblad partly serve different markets and have different strengths.

I think it would have been a good solution for customers in terms of safeguarding the photographic offering.

The eternal bickering between Phase One and Hasselblad is just silly and doesn't help.

 

[ThdeDude]

an IQ4+ would have been a viable stopgap.

Or even an endpoint for many!

 

[georgecleansman]

My assessment is that we should not expect a new IQ5 with a new sensor from Phase One in the near future. Sony wants a lot of money for the new chip, so a new IQ5 would be even more expensive. In addition, the advantages for photography applications are not so decisive from a technical point of view with 250 MP. The area of the sensor will be smaller and the aperture will have to be opened even wider due to diffraction at the expense of depth of field. Hasselblad is currently constantly renewing its product portfolio at reasonable prices. And if Hasselblad can solve the banding problem with the CFV-100c with a software update, we will have an excellent alternative to the old IQ4 from 2018.

 

[Paul Spinnler]

I have inofficial (meaning not publicly quotable, but confirmed otherwise) confirmation from industry sources that it is coming. Its a new chip, so challenges around IQ and dynamic range need to be worked out via hardware implementation etc., but it will come.

It'll be the same price range as before, roundabout. Ie could be 50k or 52k list, 25-30k with trade-in. Even if it is 5k more, it still speaks to the same high end clientele, so chances are it does not matter for the remaining customers they have.

People still will want it – there's always a bunch of people globally who want and can afford the best.

The good thing: Buying a used IQ4 up to 24k is more or less a safe investment if down the road you want to upgrade as you won't lose money anymore (assuming you want to stay in).

 

[jduncan]

Interesting that they recently released a smaller version of their CH series camera, the iXH 100MP.
What´s the story here, do even the CH guy´s don´t have the money these day for the top end?
Btw, I also wonder why this part is considered the non plu ultra for repro work, you can not do focus
stacking with this clumsy stand and the 72mm SK lens is certainly good but i am 100% sure that my
setup with my IQ3 100, Novoflex Castel Micro and my macro lens is better.

Hi,
It's funny because they are using the 43.9 x 32.9mm sensor, yes, the one they talked so much about
They really shot everybody on the foot, including themselves, by ensuring they are out of the most lucrative market.
The perils of being destructive, instead of competing on a constructive way like Hasselblad, Fuji, Nikon, Canon, Sony and Leica.

Best regards,

 

[Paul Spinnler]

What are you talking about. It doesnt make sense to compete with Hasselblad and Fuji if they are not primarily a photo business.

They sell industrial products for photo use nowadays as a side business. That's different from driving a mass market camera business.

If they sell a 50k system with 30k profit and Hasselblad sells 10 cameras for the same profit and needs more overhead and logistics - that's just a different business.

Phase One photo is super small nowadays and they're ok selling just a few items.

It makes total sense to be honest.

Their main business is geospatial - not photo!

 

[jduncan]

It would have been good for all photographers if DJI or Accel or a third private equity investor had bought Phase One and Hasselblad and merged them.

P1 and Hasselblad partly serve different markets and have different strengths.

I think it would have been a good solution for customers in terms of safeguarding the photographic offering.

The eternal bickering between Phase One and Hasselblad is just silly and doesn't help.

Hi,

The ones that all a little bit on this forum know this was a recurrent conversation for ages.
For me the start of Phase was the software. It's an economic engine. The last "match style" tool is quiete something.
The hardware side is more difficult to justify massive investment. I believe hcubell is spot on, and they need to invest in back but see the cameras as a niche
product like Large format. Something that has a bunch of lovers that are willing to put the effort to use the tool they love.

Backs build themselves, cameras are complicated.

Best regards,