200-400 f4 and the "new" 100-400 zoom

[woollybear]

I have a couple of questions...

1. How much do you think the 200-400 actually costs to manufacture? It seems to me that even allowing for a hefty markup and amortizing development costs across the number of lenses they are likely to sell (at +10k a pop) the retail price is out of line with costs. I'm not asking if this is what the market can bear and all that, just trying to get a feel for cost vs. price.

I don't know, maybe their manufacuring costs were doubled by the tsunami (building the factory twice...)

2. How much of the lens (hardware such as the glass, electronics, or manufacturing equipment needed to produce the lens) would be transferable to the "new" 100-400? And is this where they are going? A metaphor might be commercial aviation, the 200-400 is business class and the 100-400 is coach. One pays the overhead and they other marginal costs.

 

[Don Haines]

First 200-400.... probably about $50,000,000 to build...
second 200-400, probably about $5000 to build...and canon probably makes around $2500 profit per lens
To make their money back they have to sell 20,000 lenses.... a tough target to hit.

First 100-400.... probably about $20,000,000 to build...
second 100-400, probably about $200 to build and canon probably makes $500 profit per lens.
To make their money back they have to sell 100,000 lenses.... an easy target to hit.

 

[infared]

First 200-400.... probably about $50,000,000 to build...
second 200-400, probably about $5000 to build...and canon probably makes around $2500 profit per lens
To make their money back they have to sell 20,000 lenses.... a tough target to hit.

First 100-400.... probably about $20,000,000 to build...
second 100-400, probably about $200 to build and canon probably makes $500 profit per lens.
To make their money back they have to sell 100,000 lenses.... an easy target to hit.

Do you mean $50,000,000 to research, develop and design????

Do you mean $50,000,000 to research, develop and design????

 

[Zv]

To be honest I don't think this lens is over-priced. Consider how much a 400 f/2.8 lens costs and then think what this lens can do. Also prices may drop a little after the initial release. 12k for a supertele zoom is a lot of money but reltive to other supertele's I think it is priced accordingly.

It obviously doesn't cost 12k to make it but think about the R&D that went into it. I assume also this lens will be like the other supertele's in that it is hand made. Maybe some training or specialized skills were involved as it's a new design.

Yes, the earthquake / tsunami certainly mucked up business for a while so perhaps some of that cost is in there. Prob not a huge factor though unless they had plants in Fukushima. (I think Utsunomiya was closest, not affected trust me I lived through the earthquake in Fukushima and have first hand experience).

Then the Yen was strong for a while hampering exports and further messing up the economy. Overall it's been a horrible few years for businesses.

Now look at what Roger at LR says about it. The Imastat results speak for themselves. This lens is shaaaaarp!

Is it worth it. I think for professionals - bottom line - hell yes.

 

[viggen61]

I have a couple of questions...

1. How much do you think the 200-400 actually costs to manufacture? It seems to me that even allowing for a hefty markup and amortizing development costs across the number of lenses they are likely to sell (at +10k a pop) the retail price is out of line with costs. I'm not asking if this is what the market can bear and all that, just trying to get a feel for cost vs. price.

Typical retail markup can be as high as 100%, so figure no more than $5,000-$6,000 cost to Canon...

2. How much of the lens (hardware such as the glass, electronics, or manufacturing equipment needed to produce the lens) would be transferable to the "new" 100-400? And is this where they are going? A metaphor might be commercial aviation, the 200-400 is business class and the 100-400 is coach. One pays the overhead and they other marginal costs.

I'm sure Canon re-uses a lot of electronics, but there will also be other differentiating costs, like programming.

I think the analogy would be more like Gulfstream V (luxurious, fast, etc.) to Beechcraft King Air (serviceable, slower, workhorse)...

 

[Dylan777]

I have a couple of questions...

1. How much do you think the 200-400 actually costs to manufacture? It seems to me that even allowing for a hefty markup and amortizing development costs across the number of lenses they are likely to sell (at +10k a pop) the retail price is out of line with costs. I'm not asking if this is what the market can bear and all that, just trying to get a feel for cost vs. price.

Typical retail markup can be as high as 100%, so figure no more than $5,000-$6,000 cost to Canon...

2. How much of the lens (hardware such as the glass, electronics, or manufacturing equipment needed to produce the lens) would be transferable to the "new" 100-400? And is this where they are going? A metaphor might be commercial aviation, the 200-400 is business class and the 100-400 is coach. One pays the overhead and they other marginal costs.

min x2.5 @ cost. Don't forget warranty service, advertising, promotions etc...Yes, we the buyers are helping Canon pays all that :'(

 

[RGF]

I have a couple of questions...

1. How much do you think the 200-400 actually costs to manufacture? It seems to me that even allowing for a hefty markup and amortizing development costs across the number of lenses they are likely to sell (at +10k a pop) the retail price is out of line with costs. I'm not asking if this is what the market can bear and all that, just trying to get a feel for cost vs. price.

Typical retail markup can be as high as 100%, so figure no more than $5,000-$6,000 cost to Canon...

2. How much of the lens (hardware such as the glass, electronics, or manufacturing equipment needed to produce the lens) would be transferable to the "new" 100-400? And is this where they are going? A metaphor might be commercial aviation, the 200-400 is business class and the 100-400 is coach. One pays the overhead and they other marginal costs.

min x2.5 @ cost. Don't forget warranty service, advertising, promotions etc...Yes, we the buyers are helping Canon pays all that :'(

Cost are not relevant except that Canon needs to earn enough $ to keep the lights on. That is, to stay in business - if they sold lens and bodies are marginal cost or even below marginal costs, we would all be happy until we realized that there would be no more and our investment had no future.

The question is what is the lens worth to the consumer .. the market place will determine its price. Too high and volumes will be low and Canon will be forced to lower the price or add more goods / services to their bundle. Too high and in the short term we benefit but they will eventually raise the price - either on the current item or a future item.

 

[woollybear]

I'm not asking if this is what the market can bear and all that

The question is what is the lens worth to the consumer .. the market place will determine its price.

???

 

[Mt Spokane Photography]

The development costs on the lens were pretty high, its unlikely that Canon will see any profit in 5-7 years.
Selling price is $11,800. Dealers get about 10% discount off the selling price, so Canon might get $10,600.

As far as direct costs to manufacture and assemble the lens, it likely costs $6500 - 7500. The rest is amortization of tooling, development costs, advertising, shipping, profit, warranty and repair, things like that that are expenses but not included in direct costs by accountants.
Market does not really play a big factor in prices, Canon controls the quantity available and is able to keep prices up. However, if sales are better than forecast, and the development costs are amortized sooner, than there is room to lower the price.
Assuming tooling and development cost was $15,000,000, and amortized over 10,000 units, that would be 1500 dollars per lens, which sounds about right.
No one but Canon knows, of course, but the numbers but it in the ball park range of $7000 to build.

 

[woollybear]

The development costs on the lens were pretty high, its unlikely that Canon will see any profit in 5-7 years.
Selling price is $11,800. Dealers get about 10% discount off the selling price, so Canon might get $10,600.

As far as direct costs to manufacture and assemble the lens, it likely costs $6500 - 7500. The rest is amortization of tooling, development costs, advertising, shipping, profit, warranty and repair, things like that that are expenses but not included in direct costs by accountants.
Market does not really play a big factor in prices, Canon controls the quantity available and is able to keep prices up. However, if sales are better than forecast, and the development costs are amortized sooner, than there is room to lower the price.
Assuming tooling and development cost was $15,000,000, and amortized over 10,000 units, that would be 1500 dollars per lens, which sounds about right.
No one but Canon knows, of course, but the numbers but it in the ball park range of $7000 to build.

Interesting, higher than I would have thought.

What would be your guess on how much of the lens can be used in a "new" 100-400?

Also, I am still trying to understand how similarly sized lenses (200-400 vs. 100-400) could be that different in price. I am guessing the "new" 100-400 would be in the 3k range, so 3x or 4x more for the 200-400. I would think that the primary driver of cost would be the speed and focal length on the long end, and that a zoom tele of x-400 f4 would be a little closer to a y-400 f4. Am I wrong to think this?

 

[Loswr]

What would be your guess on how much of the lens can be used in a "new" 100-400?

Likely almost none, per se. The new coatings used on all lenses would be applied to the 100-400, of course. The designs are very different (extending vs. non-extending zoom, variable vs. constant aperture, built-in TC, etc.).

Also, I am still trying to understand how similarly sized lenses (200-400 vs. 100-400) could be that different in price. I am guessing the "new" 100-400 would be in the 3k range, so 3x or 4x more for the 200-400. I would think that the primary driver of cost would be the speed and focal length on the long end, and that a zoom tele of x-400 f4 would be a little closer to a y-400 f4. Am I wrong to think this?

The new 100-400 and the 200-400 are not 'similarly sized lenses'. What matters is the aperture at the long end of the zoom. The 100-400 is 400/5.6, meaning a 71mm diameter front element, whereas the 200-400 is 400/4, meaning a 100mm diameter front element - 41% larger linear measure, meaning double the area (and larger volume, too). Bigger elements, a lot longer (and more costly) to grow the fluorite crystals, more robust engineering to hold the larger, heavier, glass, etc.

Bottom line, the 100-400mm f/4.x-5.6 and the 200-400mm f/4 are in totally different classes, in size, build cost, and price.

 

[Mt Spokane Photography]

There is no "New" 100-400mm lens, only the same rumors we have been hearing for 8 years.

Its pretty difficult to say anything about the construction of a non existent lens.

However, there would be "0" parts interchangeability, that's for sure.

The optical formula would also likely be different.

What makes those big white lenses so expensive is the price of large chunks of optically perfect fluorite and glass which are ground and polished painstakingly by hand to extreme tolerances, far tighter than can be directly measured. Lens elements are then trial fitted, they change them out until the combination meets the specifications. Then, they are tested and adjusted multiple times. The labor cost is high, because only the most experienced technicians are allowed to work on them.

They are a supurb piece of equipment for the price.

Even so, Cinema lenses go much further towards being perfect, and their $40k + prices reflect this.

 

[MadHungarian]

I know that in my field, software development, the project invariably ends up costing twice what the experts thought, and more like 5x-10x what an non-expert would think. So i'd say to take whatever you think it cost and multiply by 4x or more, and that's probably what it actually cost. However unlikely it seems to me right now. $50,000,000 to develop a lens? That sure seems crazy to me. But if lens development is anything like software development, it's probably true.

I'm just wildly guessing here without any actual knowledge, but let's say a hypothetical project team of 4 optics designers, 4 mechanical engineers, 4 electronics engineers+programmers, 4 testers, a half-dozen managers, a dozen other misc support+manufacturing+marketing people. That's about 35 people there, for say 2 years each. Let's say average cost/year at $400K per person for salary+benefits+equipment. Now we're already at $28,000,000 development costs here. And i don't think i've even included prototype build costs.

Woo hoo, my first post!

 

[woollybear]

a half-dozen managers

Judging from a few of the jobs I worked on over the years, that number seems a little on the low side...unless the project gets screwed up, then there would be none!!

 

[Don Haines]

I know that in my field, software development, the project invariably ends up costing twice what the experts thought, and more like 5x-10x what an non-expert would think. So i'd say to take whatever you think it cost and multiply by 4x or more, and that's probably what it actually cost. However unlikely it seems to me right now. $50,000,000 to develop a lens? That sure seems crazy to me. But if lens development is anything like software development, it's probably true.

I'm just wildly guessing here without any actual knowledge, but let's say a hypothetical project team of 4 optics designers, 4 mechanical engineers, 4 electronics engineers+programmers, 4 testers, a half-dozen managers, a dozen other misc support+manufacturing+marketing people. That's about 35 people there, for say 2 years each. Let's say average cost/year at $400K per person for salary+benefits+equipment. Now we're already at $28,000,000 development costs here. And i don't think i've even included prototype build costs.

Woo hoo, my first post!

Welcome to the forum.....

My numbers were all wild guesses..... but a new lens is not cheap... there is the design, fabrication of several prototypes, testing, more fabrication of prototypes and testing until they feel they have it right, and then there is the setup of a production line... printing...graphics design.... I can see a high end lens easily getting up to several tens of millions of dollars to get into production....

A kit lens may sell a million copies.... make $50 profit per lens and you put money in the bank. A high end lens may only sell 10,000 copies.... much harder to make back the cost of getting it into production....

 

[RGF]

First 200-400.... probably about $50,000,000 to build...
second 200-400, probably about $5000 to build...and canon probably makes around $2500 profit per lens
To make their money back they have to sell 20,000 lenses.... a tough target to hit.

First 100-400.... probably about $20,000,000 to build...
second 100-400, probably about $200 to build and canon probably makes $500 profit per lens.
To make their money back they have to sell 100,000 lenses.... an easy target to hit.

I would 2nd is much more than $5,000 to build. 2-100 probably were closer to $25,000 to build. As production was optimized, manufacturing costs decline.

COG does not matter to the consumer, except that we need Canon to stay in business. What is your time worth? If you do a COG analysis, even minimum wage is too high.

 

[RGF]

What matters is the aperture at the long end of the zoom. The 100-400 is 400/5.6, meaning a 71mm diameter front element, whereas the 200-400 is 400/4, meaning a 100mm diameter front element - 41% larger linear measure, meaning double the area (and larger volume, too). Bigger elements, a lot longer (and more costly) to grow the fluorite crystals, more robust engineering to hold the larger, heavier, glass, etc.

Double the surface and probably close to triple in volume/weight.

Price / lb (I know stupid measurement, but ..) is very similar for all the great whites and new non-specialized lens. Go figure - real or simply an artifact?