Marketing vs. reality

[ErikKaffehr]

Hi,

Just a small reflection...

Before retiring I worked with nuclear power plant simulations. A few years ago, we were depending on cutting edge technology. We didn't need the most extreme performance like in meteorology or CFD (Computational Fluid Dynamics) but we needed a lot of computer power.

So, I worked with computer vendors who were technology leaders at that time. Sun Microsystems, Alliant and Silicon Graphics to name a few. Those companies offered high performance at reasonable prices.

But, like 15 years ago the competitive landscape shifted. When I started in the business, we were buying 3M$US systems from Encore Computer, which I showed we could replace with 0.3M$US systems from SUN and the cheaper systems outperformed the old systems widely.


So, going from Encore to Sun, saved us 90% of the money and gave us 10X the performance.

At that time, we didn't really care about the price, but we needed the performance, so we passed on Sun and went with Silicon Graphics (SGI).

But, five years later humble PC technology cached up with Silicon Graphics. Now SGI still had some impressing stuff, but they were to expensive. At this stage, companies resort to marketing.

It started being more and more difficult to argue that SGI had advantages to compensate for 10X the costs. I could argue that their CCnuma architecture may be superior for certain workloads.

But, even I had great difficulty motivating that we would pay 12k$US for a DVD drive, when a company like DELL was selling the exactly same DVD drive for 1.2 k$US.

So, my experience is that:

• You compete on performance.
• You focus on marketing.
• You die.

Best regards
Erik

 

[Jorgen Udvang]

It happens to most industries I suppose. The very high-end, bleeding edge manufacturers will have to understand when time has come to become mainstream, simply because mainstream has become good enough for most or all purposes. Moore's law is becoming irrelevant. I use a 2009 Mac Pro and a 2015 MacBook Pro. They do what I need them to do, even editing 4K video. 8K video? I don't need that. I still only publish 1080. 8K is the 21st century Silicon Graphics. The total bleeding edge that nobody, or at least very few, needs.

The hi-fi industry went through this a few decades ago. Great hi-fi from back in the eighties mostly sound more musical than what is offered today, but few bother when they can buy a great sounding Chinese gadget that fits in your pocket for $300.

As for cameras, notice how most cameras (except medium format) have stopped at around 24MP. Anything higher is mostly for specialist use and pixel peepers. And for marketing. Mostly for marketing. Nokia launched the 41MP 808 model nearly a decade ago. Then they died... more or less. Fuji GFX 100? I dunno... Phase is clearly dying, Hasselblad survives on great design and miniaturisation.

Only if you survive long anough to become really irrelevant but still alive, an antique still in production so to say, you'll survive with obsolete, high end products. Like Rolex, Rolls Royce and Louis Vuitton... and Leica. Leica has even survived past that, and become modern again, while still making antiques :thumbs:

 

[drevil]

I dont see Fuji dying any time soon, Phase yes, Hasselblad maybe, though they made a good move with the X series, but we need to see how much longer money from DJI will come in case the X system doesn't perform as expected.

but its clear to see, when you look at history, that successful companies rest too much on their success, and that is CLEARLY the case with Phase One, clearly.
Just look at interviews with the CEO, arrogant as....you know. They are drunk on success that they think they don't make wrong decisions and loose the connection to the user base. history repeats itself. always has always will

 

[PeterA]

Camera market is now segmented into MP market. 25|50|100 ( oh and Phase gets to keep the 150MP for now)
Differentiation has shifted to how good delivery of the MP offer is - which is all about size/weight/total lens ecosystem/DR/ISO/IBIS/Autofocus etc etc ie user experience AND Dual purposing VIDEO + Stills.
The industry is basically commodified for all intents and purposes - eg what is the difference between 4/3rds and APSC - not much, what is the difference between APSC and so called full format - well FF offers up to 64MP via Sony and others offer around 50MP and APSC offers 26 - different segments - but APSC @25Mp is pretty much equivalent to FF at 25MP...FF @25MP is dying...except for very specialist cameras like 1 series Canon and Nikon and fast shutter speed for sports type cameras.

So as in any basically commodified industry - competition inevitably becomes a battle of volume and price. This is a game the Japanese manufacturers understand very well.

Oh but but what about differentiated products - surely they can charge a premium and live happily in a niche? Of course they can - Leica is expert at that game.

Phase is in a different boat though - their product offer sans the extra (50MP) is a relative underperformer compared to the disruptor in Fuji. Hasselblad is in the same boat as Phase One with its H series - but it has an X model which is rather nice.

Party time is over as far as easy margins at the 'top end' - Fuji has no intention of going away the market is telling them 'please stay' - no one really cares about chip size - except people flogging it as a differentiator and those who have bought into it.

In order for HAsselblad and Phase One to survive they will have to offer products with similar specs to Fuji at similar prices - or kid themselves that they can continue with what they've been doing for a couple of decades now - good luck with that.

 

[Pelorus]

If you have links to those interviews I'd be keen to see them...

[snip]
Just look at interviews with the CEO, arrogant as....you know. [snip]

 

[Jorgen Udvang]

If you have links to those interviews I'd be keen to see them...

I don't have any links to interviews, but here's a link to the press release from their new owner, Axcel. Notice that they mention software development before "image capture". They also call themselves "ultra-high-end", which is fair enough. That does however send a strong signal that they are not for everyone, and do not intend to be. With the increasing price gap between "traditional" medium format solutions and the type of cameras Fuji and Hasselblad are now making, it would probably make more sense for Phase 1 to profile their products stronger towards industrial markets, which are less price sensitive.

But what if Fuji comes out with a $5,000 100MP back with pixel shift?

http://www.axcel.se/nyheter/pressmeddelanden/axcel-invests-in-phase-one/

 

[Pelorus]

Thanks Jorgen,

The most interesting thing for me in that presser is this:

Today, the majority of growth and profitability comes from sales of software solutions, where the company has managed to grow by ~40% p.a. in revenue in the last four years and also expects significant growth in 2019.​

Maybe that profit comes from selling dot releases as major upgrades Whatever the case it probably also says something about priorities - if software is the major source of growth and profitability it will probably have first call on resources if there is a competition.

I don't have any links to interviews, but here's a link to the press release from their new owner, Axcel. Notice that they mention software development before "image capture". They also call themselves "ultra-high-end", which is fair enough. That does however send a strong signal that they are not for everyone, and do not intend to be. With the increasing price gap between "traditional" medium format solutions and the type of cameras Fuji and Hasselblad are now making, it would probably make more sense for Phase 1 to profile their products stronger towards industrial markets, which are less price sensitive.

But what if Fuji comes out with a $5,000 100MP back with pixel shift?

http://www.axcel.se/nyheter/pressmeddelanden/axcel-invests-in-phase-one/

 

[PeterA]

Thanks Jorgen,

The most interesting thing for me in that presser is this:

Today, the majority of growth and profitability comes from sales of software solutions, where the company has managed to grow by ~40% p.a. in revenue in the last four years and also expects significant growth in 2019.​

Maybe that profit comes from selling dot releases as major upgrades Whatever the case it probably also says something about priorities - if software is the major source of growth and profitability it will probably have first call on resources if there is a competition.

Including the FUJI GFX50/100 as a supported MF camera would have encouraged a lot of Fuji users (like me) to move over from LR - like I have...teh software division has been used as a protective 'cover' for their hardware camera division - classic error in my books Not surprised that they have grown faster now - and if they opened it to Hasselblad - would grow even more I suspect..

 

[Pemihan]

Today, the majority of growth and profitability comes from sales of software solutions, where the company has managed to grow by ~40% p.a. in revenue in the last four years and also expects significant growth in 2019.​

IMO much of that increase in revenue comes from a highly increased focus on the industrial sector under the management of Silverfleet Capital. https://industrial.phaseone.com/

 

[MrSmith]

In order for HAsselblad and Phase One to survive they will have to offer products with similar specs to Fuji at similar prices - or kid themselves that they can continue with what they've been doing for a couple of decades now - good luck with that.

They both have an angle that might help them. HB just look ‘right’ they press all the tactile buttons with their newer cameras that make potential buyers who are guided more by sentiment than fact stick their hands in their pockets. They look desirable without the Leica price or old man collector aura. They have dropped their prices to be competitive but not to bargain basement levels.

Phase are an ugly duckling behemoth that wins the top trumps* megapixel war and their pricing is firmly in. Rental/high net worth/institutional budget territory. The dozen or so users I know are now all out the phase1 game, rent or are using 10 year old gear (and a Sony) specialist tools that will always have a market just a very small one.

I don’t agree with the doomsday predictions though, I still think they will be around in 5-10 years time selling cameras.

*80’s card game with car data/points scoring to ‘trump your oponent’

 

[PeterA]

They both have an angle that might help them. HB just look ‘right’ they press all the tactile buttons with their newer cameras that make potential buyers who are guided more by sentiment than fact stick their hands in their pockets. They look desirable without the Leica price or old man collector aura. They have dropped their prices to be competitive but not to bargain basement levels.

Phase are an ugly duckling behemoth that wins the top trumps* megapixel war and their pricing is firmly in. Rental/high net worth/institutional budget territory. The dozen or so users I know are now all out the phase1 game, rent or are using 10 year old gear (and a Sony) specialist tools that will always have a market just a very small one.

I don’t agree with the doomsday predictions though, I still think they will be around in 5-10 years time selling cameras.

*80’s card game with car data/points scoring to ‘trump your oponent’

hahah we play a game down here called 500 - a form of whist/bridge but simpler - 10 no trumps is the highest bid.

Time will tell I guess - I exited MF years ago and only came back in because of Fuji - I know that they will be around unlike both Leaf and Sinar who went bust and left me with unsupported dead systems - not as confident about the other two as you - but I hope all companies survive and prosper.

 

[gandolfi]

!!

 

[TheDude]

HB just look ‘right’ they press all the tactile buttons with their newer cameras that make potential buyers who are guided more by sentiment than fact stick their hands in their pockets.

But the HB CVF-50c is also the only digital back available new other than 645-format offerings from HB and P1.

(Flange focal distance issues limit the usefulness of Fuji GFX cameras on a technical camera for tilt-shift or stitching. There are only a few short focal length lenses (must be retrofocus) that would work.)

 

[TheDude]

So, my experience is that:

• You compete on performance.
• You focus on marketing.
• You die.

Best regards
Erik

There is a lot of truth & wisdom in that statement!

 

[TheDude]

But what if Fuji comes out with a $5,000 100MP back with pixel shift

You surely meant "when" not "if"! :grin:

 

[TheDude]

Probably only a question of time.

P1 exited the 44x33mm sensor market, and I wonder whether HB's H-system will be around much longer. Should the H-system retire, then P1 and HB would be no longer direct competitors, and opening up Capture One to HB would therefore no longer support a direct competitor.

 

[Jorgen Udvang]

You surely meant "when" not "if"! :grin:

It wouldn't be a first :

 

[TheDude]

It wouldn't be a first :

Learning something new every day! Didn't knew that this camera even ever existed.

 

[Jorgen Udvang]

Learning something new every day! Didn't knew that this camera even ever existed.

The camera, Fuji GX680, was designed for film, 6 x 8, with masks available for 6 x 7, 6 x 6 and 6 x 4.5. It's fully electronic and very heavy. Front standard has all movements, focusing by bellows and there are leaf shutters in all lenses. The first model was launched as late as 1987, and the final III/IIIs versions were in production from 1998-2007. With the 50mm f/5.6 wide angle plus film holder, AE finder and batteries, it weighs around 5 kg.

The digital back (Fujifilm DBP) was made in small numbers and only sold in Japan. They are almost impossible to find. Because the sensor size was so much smaller than the film size it was design for, all wide angle options disappeared when using it (50mm is the widest original lens), so really only good for portrait photography. The DBP was a Fujifilm "Super CCD", same consept as in Fuji S3 and S5, and it had 20 plus 20 million pixels. If it works like the S3/S5, the real resolutions is probably somewhere inbetween, around 30MP, which was pretty decent for the time (2003). Maximum ISO was 200.

Some use them with other digital backs. With Sinar or Hasselblad backs, they work seamlessly. With other backs, an interface box from Kapture Group is needed, and I believe they are out of business.

These are extremely fascinating cameras with all kinds of interesting features. I currently use one for industrial photography, but originally bought it for portrait work.

 

[TheDude]

The camera, Fuji GX680, was designed for film, 6 x 8, with masks available for 6 x 7, 6 x 6 and 6 x 4.5. It's fully electronic and very heavy.

Very interesting write-up. Thank you for the effort.

I can now see how Fuji had the experience & expertise to design and built a camera like the GFX 100.

A brute yet sophisticated tour de force of what is currently possible. Assume needs little or no marketing to sell.