Maggie,
I agree with that. The issue becomes one of "what else have you got" type of approach. It is not hard for Leica to remain very much the top for the RF market, and what folks think of when they think about Leica cameras. The harder part comes when folks that are drawn into Leica, like many of us, do have needs beyond the RF capabilities. If Leica wants to be ONLY a RF builder, that is fine, but then the overall market is limited, revenues are going to be limited, and they still need to spend on updating and maintaining the line. Without a steady cash inflow, that becomes difficult. The point of the digicams is to capitalize on the brand and generate cash flow from a larger base. That is what Nikon, Canon and the rest do. Their huge profits are not made from the DSLRs, though that may be changing a bit more as those sales really ramp up more, but the association of what great images those cameras capture. The world has changed a lot since Leica ruled the film camera roost for a while. DSLRs displaced them then and are not giving up any ground today. If Leica does not play in that area also, being noted as a premier glass and camera maker, they will go quietly into the night. More M cameras will be fine, but if there is nothing else to really offer that folks will buy, and that may generate a lot more cash flow, they get stuck. The DSLR is still a tool of choice by most photographers. The MF and RF market segments are very small and specialized in comparison. The MF segment has seen tremendous change recently, but still will only attract a very limited number of professional and very demanding other shooters that have the means to buy into it. The M8 and its successors are not really in that same sort of realm. The camera takes outstanding images, but its further utility is limited at best. Leica needs to preserve it for sure, but it also needs to figure out how to sustain itself in the market beyond just the rangefinders.
One option is to seriously start making glass for everybody else's DSLRs, sort of what Sigma and others do, but that is a huge "catch me if you can" game on the part of Nikon and Canon. That comes back to producing their own body that uses their outstanding optics to their maximum potential. I think the DMR was a very good concept, and a similar approach is not bad for the R10, but instead of making the DMR module swap with film, make it swap with electronics. Update the lens line to handle AF effectively and go from there.
No matter what, Leica's is in a bit of a tough spot. Keeping the M as the flagship for recognition is fine, but they need something else to allow growth into the overall camera market. The Digilux is a step on a rather limited sensor platform. The R is going to face tough competition for sure, but that is the nature of this business today.
LJ