It costs a certain amount to develop a digital camera (or any new product). Then you have to figure out at what point you want to recoup that cost. Say you budget it at a million units. If you never sell a million units you lose money on every camera you sell.
But once you reach that point the cameras only cost is overhead, materials, and distribution, so you are in the money making phase of the business. In that phase you have three choices 1. you can continue along making big profits, if your completion will let you. 2. You can lower your prices keep the same profit, and hurt your completion. 3. You can make several models of basically the same camera at different price points. The cheapest hurts your competition but makes you little or no profit. The main stream makes good profit and is what you depend upon. Then if you can you produce a deluxe model that makes big profits but in smaller volume.
Where does Canon sit right now? Well the D60 probably paid for the R&D. The 10D is basically the current mainstream camera. The Rebel is the lost leader. All three of these cameras are basically the same camera (electronically) with mostly software differences. The 10D and the Rebel probably cost within $100 of each other to produce.
Unfortunately for the competition they have not recovered R&D, Nikon is probably near, Pentax will be a long time yet, so they are setting the market price. And Canon is stealing market share with its supposedly much cheaper digital Rebel and making money hand over fist with the 10D.
All of this is common to new markets. Mature markets are pretty much a level playing field as everyone still in have recovered basic R&D and new models come out pretty even across the board, but it is costly for a newcomer to break into the field.
---
Boris Liberman wrote:
Hi!
On Tue, 28 Oct 2003 08:50:14 +0100 Sylwester Pietrzyk <[EMAIL PROTECTED]> wrote:
on 28.10.03 3:19, J. C. O'Connell at [EMAIL PROTECTED] wrote:
Why not? Analog EOS-300V (EOS Rebel Ti) costs about 200$ and it has far moreI still dont believe that camera has a sensor that cost CANON $700 if thats what your trying to say.....
built-in mechanics than its digital sibbling. Electronics other than CCD in
DSLRs should be rather cheap.
-- Best Regards Sylwek
Pardon my intrusion, but I seem to miss something here. Let me try to explain why I think RebelD costs whatever it costs...
Canon (or any other similar company for that matter) has market presense in most if not all market segments. So they seem to know what are the specs the market favors and how much market is willing to pay for it.
So they just produce the camera that is as close to the favorite specs of given market segment as they can get within their own time frame. Then they charge maximal (perhaps minus little delta) amount of money for the outcome...
I really think it is that simple. Of course there're technical details, such as production and/or research costs, and so on. But one techinicalities are done with, and somehow I am sure Canon can be quite done with technical part of the game, it is not that difficult to set up a price for the product.
I suppose that charging maximal explains why when eventually prices go down, the product is still produced and sold, normally with profit!
Let the light be with you...
Boris
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