Tuesday, May 26, 2015

THE LEICA S AND THE PROFESSIONAL CAMERA MARKET






As soon as the Leica S2 appeared on the market in December of 2009, people began to question the wisdom of entering a market where Leica had never been a competitor.  Leica has always been known as a manufacturer of 35mm cameras and digital versions of those cameras.  They never entered the medium format market until the appearance of the S2.  This is a market that for years was the domain of Hasselblad, Rollei and Mamiya.  With the advent of digital photography this market has changed some.  Rollei unfortunately disappeared, in spite of their awesome cameras.  But there are newcomers, mainly Phase One, and until the appearance of the Leica S2, the professional medium format market was covered by Hasselblad, Phase One and Mamiya.  How is the Leica S line doing in this market?

Forbes Magazine published an interview in 2013 with Stephan Schulz, the Head of Professional Photo at Leica Camera AG.  He explained that Leica had a long history with professional photographers, mainly photo journalists.  But in the 21st century the market changed.  Photo journalists are no longer as well paid as in previous generations.  Leica needed a product that could appeal to the kind of professional photographers who are able to afford a professional camera. Today, these photographers predominantly work in fashion and commercial photography. They need a different type of camera than photojournalists who use the Leica M.  Fashion and advertising photographers tend to be committed medium-format users.

This is the market of Hasselblad, Phase One and Mamiya.  Leica realized that in order to compete in this market, they had to come up with an exceptional camera.  According to Stephan Schulz, Leica set out to develop a medium format camera that could not only compete with them, but that would be ten years ahead of what they are able to deliver.  The Leica S-System was conceived from the ground up as a purely digital camera system and was built with the precise needs of professional photographers in mind.

 
 Hasselblad

Phase One

Mamiya DM33
Mamiya

Leica had the advantage that their competitor systems originated from analog, and as a result, the digital versions of their cameras had some natural limitations.  Part of that is that their cameras are relatively large.  Instead Leica wanted to offer the best of two worlds: the size and operation of a 35mm camera with the image quality of medium format.

That of course brings up the fact that the Leica S system has a smaller sensor than their medium format competitors.  Leica addressed that issue by designing the Leica S line of lenses such that they would compensate for that.  The Leica S-System clearly outperforms the 40 megapixel Hasselblad model, and the 50 megapixel Hasselblad model is more expensive and doesn’t perform any better.

While all of that is rather impressive, the question is, how Leica fares on this market, is the Leica S finding enough acceptance to be a viable competitor?  There are no industry-wide figures, but the core medium format market is roughly 6000 units per year, worldwide, for all brands. Leica is not yet the market leader, Phase One currently has 40-45% market share, but Leica has already a 25% share only 5 years after introduction.
Leica has historically succeeded not by copying a market but by reinventing it. They did it in 1953 with the M, and they are doing it now with the S-System.

Leica S System



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12 comments:

  1. Good summary, but where is the new S (007)? It was said to be launched Q2 2015, which ends June, the month we are in...

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    1. I have no information on that. But until the end of June there is enough time left for it to appear.

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    2. What calendar are you using? According to mine there are almost 5 weeks left in Q2.

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  2. Phil Melia wrote elsewhere: Interesting article, as a commercial industrial photographer I've been using medium format digital for approximately thirteen years (Contax 645 with Leaf digital backs). The analysis of the market in terms of competitors systems originating from analogue design is spot on. I tried an S2 approximately three years ago, I loved the camera but wasn't convinced about the sensor, I much prefer CMOS sensors for my type of work. I think they have a great product in the new S cameras but they only seem to have done half the job. In my opinion they haven't even scratched the surface in promotion and advertising, especially if you look at the marketing profile of Hasselblad in this market. They really need to improve awareness and marketing of the system in order for it to grow and survive. Great product from my perspective.

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    1. Excellent insight. I agree that Leica could do a lot better as far as advertising the S line of cameras go.

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  3. You neglect to mention Pentax, which also is competing at a much lower price point than Phase, Hasselblad, etc.

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    1. One reason I did so is because I was unable to find any information about the market share of Pentax. If you have any information about that, I will gladly add this to the article.

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    2. I wondered how you got the numbers you cited; Leica, for instance, does not publish numbers, as far as I know. Strange not to even mention Pentax, given the price point compared to Leica, as opposed to Phase and Hasselblad. Plus, they've received a lot of press for the quality of their recent MF offerings.

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    3. I got the information from an article that specifically dealt with medium format digital cameras. I don't recall at the moment where I did find it. You have to forgive me for not mentioning Pentax, but considering that it is only a minor player in this field, and considering that this is a Leica specific blog, I am sure you will understand that Pentax as a whole is not too high on the list of priorities of my readers.

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  4. I found a similar quote in this Schultz interview with Forbes…..http://www.forbes.com/sites/marcbabej/2013/05/08/how-leica-camera-is-reinventing-the-medium-format-market-on-its-own-terms/2/

    No vested interest on my part regarding Pentax….I'm a Leica customer these days. Pentax (now with Ricoh) is trying to recapture the MF market share it had in the film days. I found an article that states that 1.5% of pros shot MF film, while that percentage now is under one eighth of one percent….it's all a blip, not just Pentax.

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    Replies
    1. Here...http://www.cnet.com/news/pentax-seeks-turnaround-with-tiny-q-giant-645-cameras/

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  5. Thank you for this discussion, I wish more readers would take the time to do so.

    I do recall the Schultz interview with Forbes. I doubt that any digital medium format camera manufacturer will ever gain the market shares as they had in the film days. Today's digital medium format cameras are too expensive for that. Accordingly, the total market shares are substantially smaller than what was the case during the film days. Subsequently it is also quite difficult to gain at least enough of a market share to sustain the manufacture of such cameras. A good example is the Rollei Hy 6 which was alo sold under the Sinar label. It was probably the most sophisticated medium format digital camera at the time, but they unfortunately did not succeed.

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