Herb,
Whilst a lot of what you say makes sense from a marketing perspective,
your financial analysis is much less convincing.
I have a small client with branches around the UK. The smallest branch,
in Scotland, lost £30,000 last year. (Not big money, but it's the
principle that matters!)
The immediate reaction in the boardroom was to close the branch, until I
pointed out that although they had made a loss, the branch had nonetheless
contributed £80,000 towards overheads. If the branch hadn't existed, the
company would have been £50k worse off.
It's probably much the same with Pentax. You and I have no idea how the
internal financial arrangements work, but it is highly likely that closing
the imaging division would have disastrous consequences for the cost
structure of the company generally.
Not to mention the marketing synergy from a brand name that is still
widely known, and is associated with cameras.
As you have pointed out, Pentax as a company makes money. I don't believe
they can viably get out of photography without hurting the rest of the
company, and therefore they will stay in it.
In the past couple of years they have had to revise their imaging division
forecasts downwards several times. In such circumstances, it is not
perhaps surprising that they are now forecasting rather more
conservatively.
They have said they will bring out three new models a year. That's a big
increase on the present situation. It is unlikely that they are all going
to be low-end models, and an *ist D Mk II without IS but with a much
bigger buffer and better RAW files would be easy and cheap to produce.
I've no idea where they are with a sensor for a larger pixel count, but no
doubt it's part of the plan.
As for IS, who knows? I'm sure it's on the cards because I think it's
something that people now expect in a camera range, whether or not they
need it themselves. It'll come, because it has to.
Pentax lost a huge amount of ground when they had to abandon their FF
DSLR. They ARE catching up, but the fact that their figures look a bit
ropey meanwhile is hardly surprising. Thankfully, they have the support
of their other divisions during this period.
For those who haven't studied the actual figures, but prefer to simply
regurgitate the outpourings of journalists and "analysts", Pentax's sales
for the last full financial year were flat, but margins IMPROVED.
However, the effect was offset by higher marketing costs. Personally, I
am glad that Pentax is spending more on marketing. Let's hope there's
some market research going on, too!
Herb, as you still have Pentax gear, you would surely be much better
employed trying to build Pentax up again, rather than continually trying
to undermine it.
John
PS: I don't know which John you were referring to, but I have owned
Pentax gear since 1973. Thirteen film cameras, and two DSLRs. After 32
years, I'm prepared to give them a little longer. If you can't afford to
wait, that's fair enough.
On Wed, 20 Jul 2005 01:34:04 +0100, Herb Chong <[EMAIL PROTECTED]> wrote:
as i see it, there are five market segments for Pentax DSLRs:
1) new SLR buyers who have never owned any SLR before - i think this
market is negligible, even though John recently bought one this way and
found his way here
2) Pentax film SLR owners who want to go digital - most of us here,
especially because many in this group have a large investment in Pentax
lenses they want to continue to use.
3) non-Pentax film SLR owners who are interested in going digital and
have no requirement to be compatible with their older equipment - Canon
and Nikon have mindshare and Pentax doesn't. it takes really
knowledgeable sales people and buyers with an open mind to move them to
a Pentax DSLR.
4) current Pentax DSLR owners who want an upgrade to a more capable body
because they know that they need the capability and that other vendors
offer it, so it exists somewhere. that's me, Rob, and some others here.
5) non-Pentax DSLR owners who want a Pentax instead - sorry, but i think
Godfrey is probably the only such person that will ever exist.
Pentax offers the entry level *istDL and *istDS to groups 1 and 3, and
some of 2. the *istD covers most of group 2. according to Pål, the
Pentax 645D meets the needs of group 4 and some of group 2.
the *istDL and *istDS are the bottom of the food chain and both sell for
very little and make very little. of the three groups that buy these
two, most come from group 2 and not 1 and 3. posing the 645D as the
answer to group 4 is a non-starter. if someone has to replace all their
lenses, buying a body that will cost at best the same as a Canon 1DsMk2
and probably over 10K, what is the advantage? the difference between 16
and 18 megapixels isn't worth mentioning, especially because the well
sizes are not too different in size. i can use 645 lenses on my *istD,
but what is the point? if i have to have two mostly incompatible camera
systems, why stay with Pentax? if you already have a raft of 645 lenses,
there isn't much choice, but there aren't going to be a lot of people
like that left in another year's time.
it's about time Pentax realizes that most of its market is current
Pentax SLR owners, many with film bodies that they have used for years,
and covering the entire range from casual to pro. the entry level DSLR
bodies cover the bottom third. the *istD sort of covers the middle, but
it's starting to get long in the tooth and most certainly doesn't have
certain capabilities like a bigger frame buffer and smarter RAW handling
that even the lower end bodies have. otherwise, it's a capable mid-range
camera. Pentax doesn't have a K-mount higher end camera, something in
the $3-5K range. without one, people from the film side of things
shooting at the upper end of the requirements and the ones who bought
the *istD because it was the only game in town have no place to go.
we're talking 10-14 megapixels, higher frame rate (by a little), larger
buffer (by a lot), and something like antishake or IS. yet those people
and that body are the things that influence other purchasers, even if
they are only loyal Pentax users, to stay with Pentax and buy into the
system because they know that there is a future and there is an upgrade
if they need it.
Pentax has not signaled in any way that it has a coherent, even if
hidden, picture of the future of its camera lineup. announcing the 645D
to me was representing a huge diversion of effort for a company not
making much money and knowing that developing such a system is not
cheap, even if only one more lens needs to be designed. then they
announce early retirement incentives for 150 people this year, then an
additional 150 next year, then that they feel the imaging products
division is too large and transfer 100 people from the imaging products
division to the other divisions.
as a company, the health care and optical components divisions are quite
healthy. they are the ones making money and subsidizing the imaging
products division's continuing losses. that's OK if the losses are
forecast for the short term as the company invests in some
infrastructure to bring about a turnaround, but Pentax continues to
forecast losses for the division that don't decrease, and that total
sales will not increase either. also, because of the losses, there isn't
a lot of money to invest in infrastructure in the first place. the only
way to bring about profits is to substantially cut costs, and even in
Japan, that means layoffs and cutting back, or continuing with losses
year after year because pride means that it's not possible to shut the
camera business down, or giving up and closing down the division or
selling it off. Pentax is a business, whether anyone here admits it or
not, and at some point, hanging on to something that lowers the bottom
line without an end in sight is something to get rid of. there's no
quick fix, only hard choices, and Pentax seems to think it is playing a
game with no time limit.
Herb...
----- Original Message ----- From: "Tom C" <[EMAIL PROTECTED]>
To: <[email protected]>
Sent: Tuesday, July 19, 2005 2:06 PM
Subject: Re: Pentax Profits Fall 42%
I personally don't know. I do know for myself, having two Pentax P&S
in the family is plenty, and that I'm not in the least interested in
any DSLR that's a step down from the D. So Pentax can either attract
new first time customers with low prices, or retain an existing user
base by releasing 'improved' higher end models. Maybe they should have
been doing some of both.
When an arguably smaller player in the field sees their profits decline
by almost half, when they have been persuing a business plan that was
*designed* to *make* money, when they are apparently just now reaching
a conclusion that many of us had reached earlier, it makes us little
guys wonder about the wisom of future "investments" in the system and
the long or even short term viability of the brand. It also can effect
availability of third party products. For instance, do I purchase a
$1000 50-500 Sigma zoom in Pentax mount or do I choose the opportunity
to try a differnet brand?
I don't think Herb (or myself) is saying the sky is falling. We're
simpy looking up and wondering how long it can keep hanging up there.
--
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