Is video raising cost of bodies? Is it wasted for many shooters?

[HurtinMinorKey]

Seriously, do some reading on supply and demand curves if you don't understand why removing video will not lower price.

You first. Removing video will shift the demand curve down. Equilibrium price will be lower. That being said, the video on the 5D3 isn't that great, so I'm not sure how big of a shift you'd actually get.

[elflord]

well I expect Canon will have to do some studying of supply and demand curves soon. Once the initial demand for the 5D3 is fulfilled, they will have to lower the price quickly below the D800. I believe it will already happen in the pre-christmas season this year (2012).

Yes, of course -- in early production supply is limited, so they can price it higher. They will probably lower the price once they can make them fast enough to get them on the shelves.

[elflord]

Seriously, do some reading on supply and demand curves if you don't understand why removing video will not lower price.

You first. Removing video will shift the demand curve down. Equilibrium price will be lower. That being said, the video on the 5D3 isn't that great, so I'm not sure how big of a shift you'd actually get.

The supply curve is more or less flat, slightly downward sloping (more units shipped reduces price per unit). The reason that the supply curve behaves like this has already been discussed in this thread (it basically boils down to the fact that R&D costs don't depend on number of units shipped, and at least in the long run production capacity is not pushed anywhere near the limits)

The demand curve is of course downward sloping. So when you shift the demand curve up, the curves cross further along the x axis (= more sales). Because the supply curve is more or less flat (or slightly downward sloping), the new crossing point is at the same point or further down on the y axis (lower price). The reverse happens when you shift the demand curve down.

If the supply curve was steadily upward sloping (e.g. production capacity or availability of raw materials is limited), your analysis would work. Where it breaks down is that the supply curve does not go up steeply.

[DB]

I think you should all stop speculating and/or guessing and read Canon Inc.'s latest annual report & accounts:

http://www.canon.com/ir/annual/2011/report2011.pdf

Of $17.4 billion in Total Operating Expenses in FY 2011 a total of $4bn was spent on R&D (actually $3,946 million) across all 3 major divisions: Office, Consumer (DSLR incl.) and Industrial, but if you read p.48 on R&D, most was spent on non-Consumer stuff. Total 2011 R&D was 8.7% of Net Sales

Last year Canon spent > $1 billion on 'Advertising' alone. Further 'Selling, Marketing and Administrative' expenses totaled another $12 billion. Of the 3 major components of cost identified by Canon:- Labour, R&D, and Marketing/Advertising, Research & Development is less than one quarter.

R&D is dwarfed by Selling/Marketing/Advertising budget. Same goes for all major multinational corporations (e.g. 'Big-Pharma' spend one-tenth on R&D as they do on Marketing & Advertising).

The only mention on Consumer Business Unit R&D was the reduced need to make prototypes and the declining costs.

On the other hand, some 56% of Canon's US$4.8 billion 2011 Op profit came from Consumer (includes DSLR) business, yet that strategic business unit accounts for just 36% of sales. So selling Cameras is more profitable than selling other products in their other two divisions.

R&D has fallen in recent years e.g. in 2009 was 9.5% of Net Sales, the following year 2010 it fell to 8.5%.

Finally, read the key pages in the annual report, and you will see a clear trend. Fewer prototypes in Consumer Business, more R&D directed at Office & Industrial, boost the number of Marketing Subsidiaries (see page 101 - Marketing totally dominates, especially R&D), more products using overlapping technology (e.g. same sensor or same AF, same battery etc.), plus most of the sales growth in Non-Japan Asia and Emerging Markets (ie. not the Americas or Europe), so basic thrust is to sell more of existing technology to boost revenues.

Look at pages 51-52 where they discuss the apparent demand for higher MP in DSLR but instead emphasize the imperative to boost sales support in developing markets as the main priority etc ad nauseam ....

[HurtinMinorKey]

Elflord, you're thinking of perfect competition. At worst this is oligopoly. Equilibrium is where Marginal Cost=Marginal revenue: Draw down to the x-axis to get Q, up to the demand curve to get P.

If you don't believe me, here is a simple analytical example:

Assume supply is flat (just like you said): Cost(Q)=10Q

Assume original linear demand: P=100-Q

New linear demand (after adding video): P=200-Q

Equilibrium price in the first case is 45

Equilibrium price in the second case is 105

That's monopoly, but it will be true in all cases where firms have pricing power(AKA: not perfect competition)

[Richard8971]

Here is an easy way to explain how and WHY my camera loses performance/features BECAUSE of video.

Let's go and buy a car...

You have 10 grand to spend and car "X" is 10 grand.

Car "X" is perfect in every way exept the color, you want the color changed/upgraded.

The sales manager explains that they cannot upgrade the color because it has 2 grand worth of stereo equipment installed and the color you want costs 2 grand.

You do not wish to have said stereo and will NEVER use it. Sales manager wishes he could change it but ALL cars come with the 2 grand stereo outfit and because of it they cannot give you a better color.

So you accept this and try to live with the fact that you hate and will never use the stereo and are stuck wishing for a better color.

I WANT a better "color" for my camera. Get it? The R/D and electronics/programming for video takes AWAY from better/upgraded hardware/better features because those options cost money, nothing more, nothing less. Canon chose to spend part of my hard earned money on VIDEO and not better features/upgraded hardware, something I did not ask for.

I was VERY happy with my XTi and 40D that DID NOT have video. Awesome cameras. I would have bought my 7D and 5D2 even if they never shot video. And based on what I just posted, I believe that my newest cameras suffer in features/hardware because of video. Nothing personal but video COSTS MONEY! MY money that could have been spent on better features.

Again, Canon please leave the DSLR alone. Just make a good video camera and a good still camera. People WILL buy what they want/need.

D

[wickidwombat]

A good analogy, however the REAL issue is not of cost but of compromised features to accomodate video
eg the stronger AA filter which sacrifices still sharpness to gain improved moire perfomance in video

[briansquibb]

A good analogy, however the REAL issue is not of cost but of compromised features to accomodate video
eg the stronger AA filter which sacrifices still sharpness to gain improved moire perfomance in video

Taking your life in your hands there Wicked - I got thoroughly beaten up suggesting that before 

[wickidwombat]

A good analogy, however the REAL issue is not of cost but of compromised features to accomodate video
eg the stronger AA filter which sacrifices still sharpness to gain improved moire perfomance in video

Taking your life in your hands there Wicked - I got thoroughly beaten up suggesting that before 

HaHa but there is no more smitey smitey anymore mwahahahahahaha

[briansquibb]

A good analogy, however the REAL issue is not of cost but of compromised features to accomodate video
eg the stronger AA filter which sacrifices still sharpness to gain improved moire perfomance in video

Taking your life in your hands there Wicked - I got thoroughly beaten up suggesting that before 

HaHa but there is no more smitey smitey anymore mwahahahahahaha

  You mean I can be outspoken again without having to sit on the naughty chair 

[dilbert]

...
Look at pages 51-52 where they discuss the apparent demand for higher MP in DSLR but instead emphasize the imperative to boost sales support in developing markets as the main priority etc ad nauseam ....

Interesting. The 5D3 won't give them that boost in developing markets.

What their stated goal means is that they want to go into markets where they don't have a presence and capture new customers (sensible.) Those markets will need lower cost cameras.

Here is an easy way to explain how and WHY my camera loses performance/features BECAUSE of video.

Let's go and buy a car...
...

Bad analogy.

A better analogy might be that they've developed an AWD/4WD car and no longer make 2WD cars because they're no longer considered attractive by the market. Now considered that every car manufacturer now only makes AWD cars and you want Ford to make you a 2WD car because you want a cheaper car, only drive in the city and don't need AWD. Now whilst there might be a small cadre of people that will want a 2WD car, there aren't enough to warrant a different product, not to mention that when it comes time to trade in or sell that car, the 2WD version will always be a "lesser" vehicle and be worth less than the AWD version.

There are problems with that analogy, but it is better than the stereo/$10k version.

The video capability isn't just software, it is hardware and it is part of the camera in a way that makes it impossible for you to elect for it to not be there.

[bycostello]

total waste for me.... 

[elflord]

Elflord, you're thinking of perfect competition. At worst this is oligopoly. Equilibrium is where Marginal Cost=Marginal revenue: Draw down to the x-axis to get Q, up to the demand curve to get P.

If you don't believe me, here is a simple analytical example:

Assume supply is flat (just like you said): Cost(Q)=10Q

Assume original linear demand: P=100-Q

New linear demand (after adding video): P=200-Q

Equilibrium price in the first case is 45

Equilibrium price in the second case is 105

That's monopoly, but it will be true in all cases where firms have pricing power(AKA: not perfect competition)

I'm not following this at all. If supply is flat  (not linear and certainly not linear with a slope of 10), then Cost(Q) = 10 (not 10Q)   So in the first example P = 100-Q, the curves cross where 10=100-Q, so Q = 90 and P = 10. Second example they cross at, P=200-Q = 10 = Cost(Q), so   Q=190 and P = 10 (more sales, same price)

[paul13walnut5]

Bored now.

[AG]

Bored now.

I was bored 11 pages ago.