Cripple the new PowerShot to protect DSLR sales???
October 11, 2006 10:00 AM Subscribe
Disappointingly what it doesn't have is a raw mode, which appears to have been completely dropped by Canon for its compact models - presumably to protect the sales of entry-level digital SLRs. WTF? Crippling your new products? I can maybe understand (don't agree tho) the reasoning of record companies for DRM, but in a corporation like Canon this is just insane (it's not that people will download exact copies of your cameras from the Internet). To my eyes this looks like a dumb selfdefeating business model, but I'm no MBA. So the question is, why do they do this crap? Does it really "protect" their other lines or is it simply a selfinflicted wound? Don't engineers fight the suits for stuff like this, removing features from a good camera kicking users in the teeth? thanks!
Does it really "protect" their other lines or is it simply a selfinflicted wound?
Yeah, it will, just as long as someone else isn't selling a competitive camera with the raw feature enabled at the same price point. Even then, I imagine Canon has built up a lot of brand loyalty and some people will stick with what they know.
posted by grouse at 10:20 AM on October 11, 2006
Yeah, it will, just as long as someone else isn't selling a competitive camera with the raw feature enabled at the same price point. Even then, I imagine Canon has built up a lot of brand loyalty and some people will stick with what they know.
posted by grouse at 10:20 AM on October 11, 2006
Canon is betting that:
1) People who want this camera but don't need RAW are willing to pay $500.
2) People who want this camera but need RAW will move up to the DSLR for $800.
3) People who need RAW in this camera and won't upgrade to a DSLR are lost sales, but that's ok because the DSLR upgrades made up for it.
If you're in group 3, this sucks, but that doesn't mean it's bad business sense. It does rely on having enough clout to pull off the sales to group 2 without getting defections.
posted by smackfu at 10:20 AM on October 11, 2006
1) People who want this camera but don't need RAW are willing to pay $500.
2) People who want this camera but need RAW will move up to the DSLR for $800.
3) People who need RAW in this camera and won't upgrade to a DSLR are lost sales, but that's ok because the DSLR upgrades made up for it.
If you're in group 3, this sucks, but that doesn't mean it's bad business sense. It does rely on having enough clout to pull off the sales to group 2 without getting defections.
posted by smackfu at 10:20 AM on October 11, 2006
Or should I say this:
They make $10 on each entry level dslr (D1). They make $25 on higher level dslr.
They may have sales of 100 on D1 and 50 on D2. Say 80% of the users never need the raw feature when they use D1. This is a non issue. 15% will just upgrade to the D2 as they were thinking about the D2 and this is what will break the camel's back. 5% will switch to another brand or not buy it at all.
So before you have a profit of 100*10 + 50*25. That's $2250 profit for the company. With the change they will have 80*10 and 65*25. That's $2425.
Put those numbers in the millions and you'll see why it makes sense. What this tells you is that the camera industry is far from a commodity and there is quite a bit of brand loyalty, so much so that people will act against pure economic reasons and pay a premium for a product.
posted by geoff. at 10:23 AM on October 11, 2006
They make $10 on each entry level dslr (D1). They make $25 on higher level dslr.
They may have sales of 100 on D1 and 50 on D2. Say 80% of the users never need the raw feature when they use D1. This is a non issue. 15% will just upgrade to the D2 as they were thinking about the D2 and this is what will break the camel's back. 5% will switch to another brand or not buy it at all.
So before you have a profit of 100*10 + 50*25. That's $2250 profit for the company. With the change they will have 80*10 and 65*25. That's $2425.
Put those numbers in the millions and you'll see why it makes sense. What this tells you is that the camera industry is far from a commodity and there is quite a bit of brand loyalty, so much so that people will act against pure economic reasons and pay a premium for a product.
posted by geoff. at 10:23 AM on October 11, 2006
Alternately, there may be patents they have licensed relating to creating images in RAW mode. By removing the feature in their high-volume consumer camera lines, they may be saving a lot of money in patent licensing costs. But that's just speculation.
posted by GuyZero at 10:34 AM on October 11, 2006
posted by GuyZero at 10:34 AM on October 11, 2006
Having the RAW feature was one of the reasons why I bought the G1. It worked great for me for quite a few years and led to pick my current Panasonic Lumix P&S. I chose to go for the Panasonic for many great features such as RAW shooting, small size, 16x9 shooting mode, small size, decent low-light ability, and its small size.
The one other feature that I adored about the G1 was the flip screen. It appears they did away with that on the G7 as well. It's like this camera has almost nothing worthwhile going for it. Too bad.
posted by JJ86 at 10:35 AM on October 11, 2006
The one other feature that I adored about the G1 was the flip screen. It appears they did away with that on the G7 as well. It's like this camera has almost nothing worthwhile going for it. Too bad.
posted by JJ86 at 10:35 AM on October 11, 2006
GuyZero, the new DNG format is open source and fully supported.
posted by JJ86 at 10:37 AM on October 11, 2006
posted by JJ86 at 10:37 AM on October 11, 2006
An open source format doesn't mean they haven't licensed technology to create Raw images. I don't know what "fully supported" means.
posted by grouse at 10:43 AM on October 11, 2006
posted by grouse at 10:43 AM on October 11, 2006
JJ86, what model Panasonic is that? It sounds pretty good.
posted by Flashman at 10:45 AM on October 11, 2006
posted by Flashman at 10:45 AM on October 11, 2006
It appears Canon has its own Camera RAW format so that might discount the licencing argument.
posted by docgonzo at 10:46 AM on October 11, 2006
posted by docgonzo at 10:46 AM on October 11, 2006
Best answer: The other part of this is they're interested in expanding their user base.
When you buy a point and shoot, all in one, camera, you're just buying the camera. When it comes time to buy a new P&S you might buy the same brand, but you might not.
When you're buying an SLR, it's an entirely different game. You (should) make the choice of which body to buy based on the overall camera system.
Are the lenses that you're going to need made by either the lens manufacturer or a third party? What about other accessories? Is there a logical upgrade path on the bodies? Etc. Etc.
If Canon talks more people into buying Digital Rebels, then they're locking in a larger percentage of the camera-buying population. Those users are going to be vastly more likely to buy future cameras that are compatible with their current lenses, and any lenses they buy will obviously have to fit on their bodies.
So, even if they were making less money on an entry level DSLR than their point and shoots, it probably makes more sense for them to try and sell more DSLRs.
To ramble further: this is going to be more and more critical for camera manufacturers in the next couple of years. Some of the smaller players are pushing hard into the DSLR market. Pentax (Samsung), Sony, and Olympus all want to increase their market share, and since the overall yearly sales of DSLRs isn't likely to grow that much, Nikon and Canon (the two largest camera manufacturers by far) are aggresively guarding their market share by offering excellent cameras at astonishingly low prices.
Even so, there are some new cameras coming out that are going to be very very appealing to new DSLR buyers, especially the Pentax K100d and K10d.
The four-thirds lineup has some big names behind it, but the cameras I've tried that use that mount are pretty craptacular. They have terrible viewfinders, slow start up times (ultrasonic cleaning on startup? what were they thinking?), jaw-droppingly expensive lenses, a strange aspect ratio (4:3 instead of 3:2 (yes, I know, this is optional, but still)), and unreasonable amounts of noise.
I don't see four-thirds increasing their share very much, but Pentax has a serious shot, as long as their noise levels are decent, their vibration reduction works, and their lens lineup continues to expand.
A wildcard in all this is the rumor that Sony will be introducing a full-frame sensor in the next year or so. Currently everyone is on APS-sized sensors, except for part of the Canon line. I don't have a lot of faith in Sony's ability to put out a professional-level SLR, but a full-frame sensor would go a long way in assuring potential customers that they're serious about supporting their Alpha-line.
posted by bshort at 11:18 AM on October 11, 2006
When you buy a point and shoot, all in one, camera, you're just buying the camera. When it comes time to buy a new P&S you might buy the same brand, but you might not.
When you're buying an SLR, it's an entirely different game. You (should) make the choice of which body to buy based on the overall camera system.
Are the lenses that you're going to need made by either the lens manufacturer or a third party? What about other accessories? Is there a logical upgrade path on the bodies? Etc. Etc.
If Canon talks more people into buying Digital Rebels, then they're locking in a larger percentage of the camera-buying population. Those users are going to be vastly more likely to buy future cameras that are compatible with their current lenses, and any lenses they buy will obviously have to fit on their bodies.
So, even if they were making less money on an entry level DSLR than their point and shoots, it probably makes more sense for them to try and sell more DSLRs.
To ramble further: this is going to be more and more critical for camera manufacturers in the next couple of years. Some of the smaller players are pushing hard into the DSLR market. Pentax (Samsung), Sony, and Olympus all want to increase their market share, and since the overall yearly sales of DSLRs isn't likely to grow that much, Nikon and Canon (the two largest camera manufacturers by far) are aggresively guarding their market share by offering excellent cameras at astonishingly low prices.
Even so, there are some new cameras coming out that are going to be very very appealing to new DSLR buyers, especially the Pentax K100d and K10d.
The four-thirds lineup has some big names behind it, but the cameras I've tried that use that mount are pretty craptacular. They have terrible viewfinders, slow start up times (ultrasonic cleaning on startup? what were they thinking?), jaw-droppingly expensive lenses, a strange aspect ratio (4:3 instead of 3:2 (yes, I know, this is optional, but still)), and unreasonable amounts of noise.
I don't see four-thirds increasing their share very much, but Pentax has a serious shot, as long as their noise levels are decent, their vibration reduction works, and their lens lineup continues to expand.
A wildcard in all this is the rumor that Sony will be introducing a full-frame sensor in the next year or so. Currently everyone is on APS-sized sensors, except for part of the Canon line. I don't have a lot of faith in Sony's ability to put out a professional-level SLR, but a full-frame sensor would go a long way in assuring potential customers that they're serious about supporting their Alpha-line.
posted by bshort at 11:18 AM on October 11, 2006
Best answer: It's called price discrimination. It's an interesting economic idea. Basically as a company, you want people to pay whatever they are willing to to buy your product. You want to be able to sell to frugal customers at a low price and at the same time be able to sell to customers with money to burn at a high price. But how do you keep the customers with money to burn from buying at the low price? Usually this involves introducing some external disadvantage or inconvenience to the low price. Examples abound:
Coupons and sales for stores: Allow people with less money to buy at a lower price, but only at possibly inconvenient times, or by spending a lot of time searching through the newspaper for coupons.
TKTS booth in Times Square: Lets you get cheap tickets to otherwise expensive Broadway shows, but makes you stand in line to wait.
Restaraunts with a back room: The front room is usually cheaper, but often has (intentionally) rude waitstaff, or not as nice decor.
Auctions: This is pretty much the driving premise behind auctions, especially silent auctions.
Even intentionally crippling your products: I remember the example in economics class being printers. There was a printer line that artificially reduced the print speed and charged less for that line of printers, when they could have provided faster printers at the same price. The same principle seems to be working here.
This is in fact why companies have product lines at all, instead of making just one quality product with full functionality. It enables them to reach out to a broader customer base. As an engineer, this bothers me a lot on principle, but it does make good economic sense. Either way, kind of frustrating when you are in the demographic that wants a feature but doesn't want to pay extra for it.
posted by SBMike at 11:19 AM on October 11, 2006 [2 favorites]
Coupons and sales for stores: Allow people with less money to buy at a lower price, but only at possibly inconvenient times, or by spending a lot of time searching through the newspaper for coupons.
TKTS booth in Times Square: Lets you get cheap tickets to otherwise expensive Broadway shows, but makes you stand in line to wait.
Restaraunts with a back room: The front room is usually cheaper, but often has (intentionally) rude waitstaff, or not as nice decor.
Auctions: This is pretty much the driving premise behind auctions, especially silent auctions.
Even intentionally crippling your products: I remember the example in economics class being printers. There was a printer line that artificially reduced the print speed and charged less for that line of printers, when they could have provided faster printers at the same price. The same principle seems to be working here.
This is in fact why companies have product lines at all, instead of making just one quality product with full functionality. It enables them to reach out to a broader customer base. As an engineer, this bothers me a lot on principle, but it does make good economic sense. Either way, kind of frustrating when you are in the demographic that wants a feature but doesn't want to pay extra for it.
posted by SBMike at 11:19 AM on October 11, 2006 [2 favorites]
Flashman, I have the Panasonic Lumix LX1 which has a RAW format supported by Photoshop. I've been shooting with it for almost a year and am very happy with Panasonic's quality.
posted by JJ86 at 11:20 AM on October 11, 2006
posted by JJ86 at 11:20 AM on October 11, 2006
Computer chips are a perfect example of this. Intel sold their slower Celeron line for a lot less than the pentiums. From what I read, it actually cost Intel more to make the Celerons, because the process for making them required an additional step - they took a regular PIII chip and disabled half of the cache.
By artificially limiting the speed of one, they created a high-end and low-end market and made more money.
posted by chrisamiller at 11:34 AM on October 11, 2006
By artificially limiting the speed of one, they created a high-end and low-end market and made more money.
posted by chrisamiller at 11:34 AM on October 11, 2006
The split marketing (consumer/prosumer/pro) line is ridiculous with this sort of thing, though -- many pros want a smaller camera that doesn't involve lugging around their camera bag that they use for quick pictures. I can't think of many people I know who have a DSLR who do not also have a smaller, cheaper camera.
It could be argued that the quality is lower on these cameras so you're going to be able to pull less out of RAW, but that ignores a lot of post-processing things that can fairly easily be done now with programs like Adobe's Lightroom or Apple's Aperture.
Could it be a speed issue? Newer smaller cameras seem to be bragging up the continuous shooting numbers, and larger files take longer to write to a memory card in lieu of internal memory as a buffer.
posted by mikeh at 11:55 AM on October 11, 2006
It could be argued that the quality is lower on these cameras so you're going to be able to pull less out of RAW, but that ignores a lot of post-processing things that can fairly easily be done now with programs like Adobe's Lightroom or Apple's Aperture.
Could it be a speed issue? Newer smaller cameras seem to be bragging up the continuous shooting numbers, and larger files take longer to write to a memory card in lieu of internal memory as a buffer.
posted by mikeh at 11:55 AM on October 11, 2006
Canon does this throughout their line. Until the 30D came out you had to spend three grand to get a digital SLR with spot metering -- neither the Digital Rebel nor the next step up (10D/20D) had the feature. The original Digital Rebel (300D) used essentially the same firmware as the 10D (the then-current prosumer DSLR) with several features disabled; enterprising hackers found a way to reactivate the disabled functions (Canon didn't bother disabling them in the successor, the 350D). And so on. Annoying, but they know what they're doing.
posted by kindall at 12:13 PM on October 11, 2006
posted by kindall at 12:13 PM on October 11, 2006
GuyZero writes "there may be patents they have licensed relating to creating images in RAW mode. By removing the feature in their high-volume consumer camera lines, they may be saving a lot of money in patent licensing costs."
Or they can make a cheaper chip(s) if they leave off raw output.
chrisamiller writes "Computer chips are a perfect example of this. Intel sold their slower Celeron line for a lot less than the pentiums. From what I read, it actually cost Intel more to make the Celerons, because the process for making them required an additional step - they took a regular PIII chip and disabled half of the cache."
Or the 386SX. Originally a way to sell a 386 with a defective math coprocessor, Intel eventually needed to burn a hole in the co-pro on a working chip with a laser when yields went up and demand didn't drop.
posted by Mitheral at 12:29 PM on October 11, 2006
Or they can make a cheaper chip(s) if they leave off raw output.
chrisamiller writes "Computer chips are a perfect example of this. Intel sold their slower Celeron line for a lot less than the pentiums. From what I read, it actually cost Intel more to make the Celerons, because the process for making them required an additional step - they took a regular PIII chip and disabled half of the cache."
Or the 386SX. Originally a way to sell a 386 with a defective math coprocessor, Intel eventually needed to burn a hole in the co-pro on a working chip with a laser when yields went up and demand didn't drop.
posted by Mitheral at 12:29 PM on October 11, 2006
Apple are also past masters at price discrimination. There have been Macs woefully crippled for no other reason that to protect margins on high-end models. They get really nuanced with it too: the MacBook Pro and MacBook share the same processor, so it's subtle differences that go into making one $1000 more than the other
posted by bonaldi at 4:03 PM on October 11, 2006
posted by bonaldi at 4:03 PM on October 11, 2006
This is where over-clocking originated - the same CPU chips where being sold as chips of different clockspeed for different prices. (Tolerances entered into it, but I'm simplifying). People caught on and started buying the cheap chips and running them at the expensive clockspeeds. Chip-makers responded by building more agressive cripples into the chips to prevent this.
The cost savings of mass production means it's often cheaper to produce both a high and a low performance device by consolidating both production lines into one, and then crippling some of the high-performance ones, instead of building a seperate line of low performance ones.
Also - this is part of the appeal of stuff like "make" magazine and hacking - you join the crowd that can buy the cheap stuff and turn it back into the good stuff. Of course, the time spent doing so could probably have earned the cost difference if it was put into overtime instead of tinkering, but tinkering is generally more fun than overtime :)
posted by -harlequin- at 4:39 PM on October 11, 2006
The cost savings of mass production means it's often cheaper to produce both a high and a low performance device by consolidating both production lines into one, and then crippling some of the high-performance ones, instead of building a seperate line of low performance ones.
Also - this is part of the appeal of stuff like "make" magazine and hacking - you join the crowd that can buy the cheap stuff and turn it back into the good stuff. Of course, the time spent doing so could probably have earned the cost difference if it was put into overtime instead of tinkering, but tinkering is generally more fun than overtime :)
posted by -harlequin- at 4:39 PM on October 11, 2006
Speaking as an ex-engineer: yes, we do fight the suits about crap like this. It's exceedingly painful to design hardware capable of doing super-nifty things and then have some bastard bean-counter demand that those features be turned off because his spreadsheet says it's a good idea.
Unfortunately, more companies are run by bean-counters than by engineers. This is probably because engineers know more about RAW mode than about making pots of money.
A company I once worked for once sold two different models of network server, one that would support 20 simultaneous connections and one that would support 96. The 96-user model was about $1000 more expensive than the 20-user model. The difference: literally one byte on the boot drive. I hated this kind of crap. That company drifted more and more toward total marketroid domination, and eventually I couldn't stand it any more and jumped ship.
posted by flabdablet at 5:18 PM on October 11, 2006
Unfortunately, more companies are run by bean-counters than by engineers. This is probably because engineers know more about RAW mode than about making pots of money.
A company I once worked for once sold two different models of network server, one that would support 20 simultaneous connections and one that would support 96. The 96-user model was about $1000 more expensive than the 20-user model. The difference: literally one byte on the boot drive. I hated this kind of crap. That company drifted more and more toward total marketroid domination, and eventually I couldn't stand it any more and jumped ship.
posted by flabdablet at 5:18 PM on October 11, 2006
The difference: literally one byte on the boot drive.
I cannot find a reference for it now, but the story that I once read was that IBM shipped a series of mainframes (or perhaps minicomputers, but anyway) that were, in truth, all exactly the same.
If you wanted to upgrade to the next model up, a tech came out and physically removed a jumper. You literally had less machine than before and it was significantly better. Again, it comes back to simplifying manufacturing.
posted by GuyZero at 8:14 AM on October 12, 2006
I cannot find a reference for it now, but the story that I once read was that IBM shipped a series of mainframes (or perhaps minicomputers, but anyway) that were, in truth, all exactly the same.
If you wanted to upgrade to the next model up, a tech came out and physically removed a jumper. You literally had less machine than before and it was significantly better. Again, it comes back to simplifying manufacturing.
posted by GuyZero at 8:14 AM on October 12, 2006
IBM have gone one further than that now and done away with the jumpers: customers get the same machine -- they just pay for how much of it they use. Say the box has 64 processors in it. If they want 32 processors, they pay for 32 processors and that's all the system will use. If they use more, they pay more.
posted by bonaldi at 9:52 AM on October 12, 2006
posted by bonaldi at 9:52 AM on October 12, 2006
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It is hard to say exactly the strategy without market data, their own data, industry data and more knowledge of their individual product operating margins.
posted by geoff. at 10:18 AM on October 11, 2006