Recent L Price Reductions: Thoughts?

[ajperk]

Hey everyone,

It's exciting to see L lens prices move downward, though I'm not currently in the market for any of them at the moment. I was curious what people think as to these price reductions. What do you think motivated them? And why now?

Personally, I wonder if the latest third-party options (I'm thinking of Sigma in particular) have taken a noticeable bite out of their sales of particular lenses, and they want to move some of their other L lenses before competing third party models of some of those are released. I admit, though, this doesn't necessarily explain the price reductions for more specialty items such as the TS lenses.

Anyway, interested to hear other's thoughts on this.

Take care!

 

[jdramirez]

Did they reduce the price of the 50L? I just checked, they reduced the 50L by $70. And they didn't reduce the 35L at all.

I suppose they could have reduced the prices of a bunch of lenses to mask that they are trying to make the 50L more competitive, but that doesn't seem right.

Then maybe increase the rest of the lenses back up periodically and leave the 50L where it is... but I don't see that.

I have no clue about their decision, but it is september (so christmas is not too far off)... and they did offer instant rebates in years past... maybe this is their way of having instant rebates without going back on their mail in rebate policy lately.

 

[tomscott]

I hope the UK gets the price reductions too. Currently the prices of the lenses are the same numerically in the US and UK yet the dollar is 60cent to the pound at the moment therefore prices in the UK are 1/3 more. BS. Makes no sense to buy in UK when places like DR offer same prices and a 1 year warranty, and free postage with a turn around of 3 days from HK to UK. My 70-200mm MKII lens I bought from DR had a problem recently, they got me to send it to my nearest CPS centre had it repaired and refunded me the postage. Great service, so IMO grey market isn't an issue any more.

But why Canon has announced the reduction, all new lenses have been 20-30% more expensive than the previous gen and 3rd partys are taking advantage of it, being almost 50% less in some cases. Especially now these companies are getting around the issues of AFMA etc etc

They are also pushing the boundaries and not being scared to change it up a little which is exciting. Barely any excitement coming out of either Canon or Nikon that is affordable to the masses. The most interesting lens I think canon has produced in the last 3 years is the 200-400mm. Now others are making 1.8 zoom lenses, lenses with over 500mm range. Competition is good and this is the start hopefully.

 

[neuroanatomist]

Business reasons, most likely having nothing to do with Sigma or other third-party lens makers. Prices have gone up over the last few years, as the value of the yen increased. The yen fell a while back, they've extracted a fair bit of profit from that, and now need to boost sales to maintain further profit. Choice of which lenses get price drops is likely driven by inventory levels. If you have a significant quantity of a certain lens on hand, those are sunk costs...dropping the price can help recover them,

 

[ajperk]

I hadn't been aware of the changes in the value of the yen. If the yen was stronger before, then wouldn't that make the dollar relatively less valuable and lead to less profit per lens sold in the US at that time once repatriated back to Japan? Or am I thinking about this incorrectly?

 

[Mt Spokane Photography]

As noted, the US and the Canadian dollar is quite strong against the yen, so the price needed to be dropped to offset gray market sales. Due to the stronger dollar, companies can purchase camera inventory overseas for less and sell it in the US at deep discounts and still pocked a lot of profit.

The British pound is strong against the yen, but any price changes will be decided by Canon Europe. The same issue of gray market imports should force the price down.

Those $250 "M" cameras are a good example of the weaker yen plus poor sales.

 

[jdramirez]

As noted, the US and the Canadian dollar is quite strong against the yen, so the price needed to be dropped to offset gray market sales. Due to the stronger dollar, companies can purchase camera inventory overseas for less and sell it in the US at deep discounts and still pocked a lot of profit.

The British pound is strong against the yen, but any price changes will be decided by Canon Europe. The same issue of gray market imports should force the price down.

Those $250 "M" cameras are a good example of the weaker yen plus poor sales.

That's a really good point, but the consumer still wins... so I guess that means this mostly helps the retailers within their respective markets... seems fair.

 

[neuroanatomist]

I hadn't been aware of the changes in the value of the yen. If the yen was stronger before, then wouldn't that make the dollar relatively less valuable and lead to less profit per lens sold in the US at that time once repatriated back to Japan?

Exactly, and that's why there were a couple of significant price hikes on lenses starting about 3 years ago. For example, take the MkII supertele lenses that just dropped $1K. When they were announced, the suggested retail pricing was actually around the prices today, after yesterday's drop. Between announcement and launch (which was a long delay, close to 18 months), the yen increased in value, and Canon raised the supertele prices by $500-1000.

 

[unfocused]

Oops, I posted this under a parallel thread and should have done it here:

Keep in mind that the "price drops" largely match rebate pricing. I don't think we should assume too much until we see if rebates return with even lower prices.

For the past few years, Canon (and others) have pretty much had a constant cycle of never-ending rebates. Perhaps their marketing research has show that rebates are no longer effective and permanent price drops are a better approach. (With the price "drop" actually being about the same as rebate pricing in most cases)

I also wonder about the impact on the MAP system. Rebate periods were used to enforce MAP. Yet, MAP has proven to be virtually unenforceable no matter what manufacturers try. If Canon permanently lowers prices and then no longer uses rebates to enforce MAP, they may be throwing in the towel and effectively giving retailers more flexibility on pricing. From Canon's perspective, MAP was done as a favor to retailers and had no impact on the company's profits. Perhaps they just decided that it's not worth the hassle to try to swim against the current and try to enforce prices that retailers refuse to charge anyway.