Hugely Disappointed In 5D III Price

[dho81]

Re: Understanding the price increase on the 5DIII

Thats cool. Now please explain why Nikon's (also a Japanese company) price only went to $2999.95 given your theory and the fact that the d700 was also released in 2008 months before the 5DII. Thanks.

I'm just tired of seeing this justification for Canon to charge so much more than its predecessor. In the end, it's still worth it for me to buy this camera for what I shoot, but to say that it's simply the global economy is a cop-out excuse to a price hike. Seems to me they priced it far higher to make the 5D2 seem like a great deal and continue selling high volumes of those at a moderately reduced price.

 

[Takuma]

Re: Understanding the price increase on the 5DIII

Hm assuming that the price on amazon.jp (322.201 yen)

http://www.amazon.co.jp/CANON-%E3%83%87%E3%82%B8%E3%82%BF%E3%83%AB%E4%B8%80%E7%9C%BC%E3%83%AC%E3%83%95%E3%82%AB%E3%83%A1%E3%83%A9-%E7%B4%842230%E4%B8%87%E7%94%BB%E7%B4%A0%E3%83%95%E3%83%AB%E3%82%B5%E3%82%A4%E3%82%BA-3-2%E5%9E%8B%E3%83%AF%E3%82%A4%E3%83%89%E6%B6%B2%E6%99%B6%E3%83%A2%E3%83%8B%E3%82%BF%E3%83%BC-EOS5DMK3/dp/B007G3SSP8/ref=sr_1_1?ie=UTF8&qid=1330997047&sr=8-1

is the asking price from canon, then that's a 20% increase there as well. That would translate to 3955 USD or 3000 EUR (according to the web).

just saying

 

[pdirestajr]

Re: Understanding the price increase on the 5DIII

Perhaps Nikon is pricing their camera at 3,000 to be more competitive and trying to get some users to switch? I notice their lenses are a bit more expensive than Canon's. Also one of the D800's is priced at 3,500 isn't it?

 

[HurtinMinorKey]

Re: Understanding the price increase on the 5DIII

It costs money to switch over to Nikon. Canon won over a lot of market share with the mkii, so this is one justification (economic) for the price premium over Nikon.

http://en.wikipedia.org/wiki/Switching_barriers

 

[Dave T]

I have to admit I didn't read every post of the 21 pages for this thread. A lot of them got off subject and I sped right by them until the camera in question, the 5D3, came up again. One contributor mentioned that the poll wasn't very good as it left a lot of responses out. I would agree as I was considering up grading to the 5D3 from my 5Dc. My problem is, I have never taken a video, don't want to take any video and don't foresee a time when I will want to take videos. Now I'm not lamenting the video features included in the 5D3, but rather if it could possibly be worth $3500 to someone like me who just doesn't need video capability. If it had come out with a price in the upper 2K range I would have seriously considered it...but once it passes 3K I just can't justify the outlay of money. And, I can't help but wonder how many others there are out there in the same position?

Dave

 

[CrimsonBlue]

Re: Understanding the price increase on the 5DIII

Lest we not forget that $2700 years ago is not the same as $2700 today. Inflation at 3% makes it...

$2700 Sept 2008
$2781 Sept 2009
$2864 Sept 2010
$2950 Sept 2011
$2995 March 2012 (1.5% because of 1/2 year)

The SAME camera would cost $3000 in today's dollars. Canon chose to up the price for plenty of other reasons. Debate those all you like, but the big fact that most people are missing is that time (inflation) takes its toll too.

 

[LetTheRightLensIn]

Re: Understanding the price increase on the 5DIII

A lot of people are extremely disappointed, like I am, that the price on the 5DIII increased 30% from the $2700 that was the 5DII's price for much of the first few years.

To better understand why this has happened, it's important to note that...
1. Canon is a Japanese based company that operates on the Yen.
2. The USD has weakened compared to the Yen over the last few years - perhaps not surprisingly... 30%. A graph of the USD's decline against the Yen is attached.

So back when the 5DII was announced, it was priced at 270,000 Yen ($2700 USD). Incidentally, the 5DIII is priced the same, except that 270,000 Yen now translates to $3500 USD.

As much as it sucks, it's the global economy and the weak USD that's the primary culprit here.

OTOH D700=D800

60d<50D=40D

 

[nitelife2]

Re: Understanding the price increase on the 5DIII

From my experience I'd say Canon could sell the 5D3 for $1500 and still would make profit. But as many are willing to pay more Canon takes more... It is that easy...

 

[x-vision]

Re: Understanding the price increase on the 5DIII

As much as it sucks, it's the global economy and the weak USD that's the primary culprit here.

As others have said, please explain why other Japanese companies have not increased their prices with 30%.
Also, did German car makers (BMW, Audi, Mercedes) jack up their prices with 30% when the euro was super-strong before the 2008 crisis?

Attributing the 5DIII price increase to the strong yen is simplistic and naive.

Canon simply repositioned the 5DIII a bit higher - the same way they repositioned the 7D compared to the xxD series.
If they used a different name (say 5DX or 3D), the repositioning would have been more clear.
For some reason they chose to stay with the 5D name, causing a sticker shock .

Right now the 5DIII is priced higher than the competition (D800) but the price will come down eventually.

 

[shannon76]

Re: Understanding the price increase on the 5DIII

My suggestion... If $3500 is a drop in the bucket for you go out and get the 5D Mark III. That's probably less than 10% of us. For the other 90+% of us who don't have that kind of cash lying around just keep on using your current equipment for the next 6 months or so. The price will come down in no time when Canon sees that the majority isn't falling for their new over priced baby. Besides, it isn't going to make the majority of your pictures look that much better anyway.

 

[Meh]

Re: Understanding the price increase on the 5DIII

And pray tell us what kinda of wizardry has Nikon implemented with D800's price, since the d700 launched @ 300k Yen?

Wizardry? Well, they might have chosen to accept lower profit margins in order to reduce prices and try to gain back market share against the 5D3. Just sayin'.

 

[Meh]

Re: Understanding the price increase on the 5DIII

From my experience I'd say Canon could sell the 5D3 for $1500 and still would make profit. But as many are willing to pay more Canon takes more... It is that easy...

Really? And what experience is that? Unless you are/were a very senior executive at Canon I'm inclined to think you really don't know what Canon's unit cost (manufacturing cost + allocation of marketing, R&D, etc.) is on any particular product. I'm not saying you're wrong... just that you don't know, just as I don't know.

 

[x-vision]

Re: Understanding the price increase on the 5DIII

From my experience I'd say Canon could sell the 5D3 for $1500 and still would make profit. But as many are willing to pay more Canon takes more... It is that easy...

Exactly.

There's pent up demand in the market for an "affordable" (ahem) Canon FF camera with an advanced AF system.
The 5DIII delivers just that and many will pay the initial high price.

But the 5DIII is also meant to be a high volume product (relatively speaking), so the price will inevitably drop.

This is called "price skimming" and seems to have become Canon's standard pricing strategy for all of their photo products.

 

[Meh]

Re: Understanding the price increase on the 5DIII

As much as it sucks, it's the global economy and the weak USD that's the primary culprit here.

As others have said, please explain why other Japanese companies have not increased their prices with 30%.
Also, did German car makers (BMW, Audi, Mercedes) jack up their prices with 30% when the euro was super-strong before the 2008 crisis?

Attributing the 5DIII price increase to the strong yen is simplistic and naive.

Canon simply repositioned the 5DIII a bit higher - the same way they repositioned the 7D compared to the xxD series.
If they used a different name (say 5DX or 3D), the repositioning would have been more clear.
For some reason they chose to stay with the 5D name, causing a sticker shock .

Right now the 5DIII is priced higher than the competition (D800) but the price will come down eventually.

I agree that it's overly simplistic to attribute the price increase solely to changes in exchange rate but it is not naive. It is definitely a factor but only one of many. Other Japanese or German companies may have different cost models, may incur more costs outside of Japan (say in China where the RMB is pegged to USD) which is a natural currency hedge, or may simply be absorbing the FX change and accepting a lower gross margin because their market analysis has caused them to believe they don't have sufficient pricing power to raise their prices and still maintain market share.

 

[Terry Rogers]

Re: Understanding the price increase on the 5DIII

Any economics 101 class will tell you the cost of manufacturing a product has relatively little bearing on the price a consumer pays (other than selling for below manufacturing cost).
Please read
http://en.wikipedia.org/wiki/Supply_and_demand
Canon is a corporation. A corporation produces products to make a profit. In fact, they produce products to make as much profit as possible. If they feel they could make the most profit by selling the 5D iii for $2500 to many buyers, they would sell it at $2500. If they feel they could make even more profit by selling it for $5000 to fewer buyers, they would sell it for $5000. As such, their economists feel selling it for $3500 will yeild them the greatest overall profit. If their economists are wrong (which they can be), we will see a reduction in price. If they are right, we won't. Competition (from Nikon or any other camera manufacturer) puts pressure on the price by producing more supply of competing products. However, the d800 may not be in direct competition against the 5D3 as each camera seems to be targeted to different consumers.

Ultimately, while general inflation and a weak yen may affect the cost of manufacturing, Canon is more likely to set their price structure based on making the greatest total profit possible. Profit being purchase price minus all associated costs of getting the product to the retailer and boosting demand (manfacturing, shipping, exchange rate, advertising etc).

Going on about exchange rate and inflation while part of the picture, plays a lesser roll in pricing than maximizing profit in my oppinion.

I am not an economist or business owner, so if I am wrong, please feel free to correct me. This is how I understand the economics of pricing.

 

[eeek]

Re: Understanding the price increase on the 5DIII

Also, not sure if you know this or not, the was a small earthquake and a little flood in Japan last year. A lot of Canon's raw sources, production faclities, parts and other supilles suffered just a tiny bit. Add that with a weak dollar, a product that required research and development and demand, and the prices goes up.

 

[eeek]

Re: Understanding the price increase on the 5DIII

Wonderful post, Terry Rogers.

 

[Meh]

Re: Understanding the price increase on the 5DIII

@TerryRogers.... yep, that's about right. The key is that Canon thinks a sufficiently large number of potential customers will pay $3500 at the time of announcement. The price will come down as all the early adopters get their units in their hands and enjoy firing off thousands of glorious shots. Sales will then slow down a bit and then discounts/rebates/sales will be offered that will allow the next group to get some satisfaction.

On the other hand, while Canon can, and does, set prices differently in different countries they won't allow too much price difference otherwise customers would be disgruntled for that reason. Therefore, the argument that Canon in reality has merely set the price the same as the 5D2 introduction price in Yen and the weakening of the US dollar is a large contributor to the apparent increase in the US pricing is, in fact, quite valid.

 

[FunPhotons]

Re: Understanding the price increase on the 5DIII

This is too simpleminded as others have pointed out. Global companies such as Canon have complex finances that aren't subject to simple rules like you showed. For starters, money if fungible, which means that a local dollar (a buck collected in the US) doesn't necessarily have to be repatriated, thereby going through the horrific currency exchange you mention. Canon employs people across the world including the US - maybe that buck is 'kept' on US soil and used 'to pay' US Canon employees. Or maybe it's 'kept' on US soil and used 'to pay' for US goods that are shipped to Japan for Canon's manufacturing, or it is spent on US advertising, or a web presence in the US. Or maybe Japan has lenient tax laws and that buck doesn't need to be converted at all.

Who knows? These are all stupid examples, because the answer you gave is nonsensical. The answer to the price increase is because Canon marketing decided this is the price the market will bear.

 

[ippikiokami]

The other factor which will I believe affect pricing will be how current owners of higher-end Canon DSLRS perceive the usefulness of the 5D3's upgrades in relation to their present cameras. And here I think the clever boys in marketing have made at least one serious mis-step. I'm not a videographer and I don't pretend to know their priorities, but I do know that video was the sine qua non feature which gave the 5D2 its enormous market advantage. And it can't be good news for Canon that several prominent DSLR videographers are already on record as saying that the 5D3 is a much larger step forward for still photography than it is for video. Vincent LaForet, the Godfather of DSLR video, is aghast at the lack of clean HDMI output from the new camera. "Why? Why? Why?" he asks in exasperation on his blog. (Nikon has it.)

Likewise, several videographers and commentators simply assumed that the 5D3 would take the next step to 1080p output at 60 fps, and expressed shock when it didn't. It's a capability now found on several mirrorless cameras, which also feature video autofocus superior to anything Canon has yet demonstrated. More people might feel Canon's $500 premium is justifed if it included a second processor (a Digic 4 or perhaps a 5 with or without the +) to provide the processing horsepower to handle 60 fps.

All in all it seems like a golden lead squandered. "Explorer of Light" and loyal Canon champion Laforet is so disenchanted with the specs of the new camera that he goes out of his way on his blog to tell his patron company and the world that he will not be making a video with the 5D3. And just in case Canon executives are oblivious to the fact that this a howl of protest, LaForet remounts a page-one link to his seminal video, Revery--shot with the 5D2. Could there be a clearer slap in the face from a videographer?

If the 5D3 can't maintain the 5D2's enormous sales advantage among videographers, I'll have my new camera about as soon as I can afford it.

In Laforet's post... How does everyone miss the fact that he basically states his needs are not on the stills side anymore and the $15,000 C300 purely video camera is what he is benchmarking the 5d III? Of course for a pure video guy that can afford 15k C300 how is the 5d III really going to impress him? Seems like a super case of reading what you want into it.

When the 5d2 came out Laforet was still know as a Pulitzer Prize winning photographer and he was really just getting into cinema productions.