More Canon price drops!

[nonac]

This just in........ http://www.canonpricewatch.com/blog/2014/12/breaking-news-permanent-canon-price-drop-tomorrow-december-11/

 

[Ripley]

Maybe we'll hit some all-time low prices before the holidays are over...

 

[RGF]

Look at the Yen / Dollar The Yen is rather weak (you can get many more yen per dollar than six months or a year ago).

Canon can sell at a lower $ price and still get the same (or more) Yen.

 

[privatebydesign]

Look at the Yen / Dollar The Yen is rather weak (you can get many more yen per dollar than six months or a year ago).

Canon can sell at a lower $ price and still get the same (or more) Yen.

That only helps for things that cost Canon Yen, all the stuff they pay for outside Yen, like raw materials, shipping, everything made in Thailand and the other 'foreign' plants costs more because of the Yen slip. Of course companies like Canon should be hedging to mitigate the general exchange rate changes, but going either way has its drawbacks.

 

[Mt Spokane Photography]

Look at the Yen / Dollar The Yen is rather weak (you can get many more yen per dollar than six months or a year ago).

Canon can sell at a lower $ price and still get the same (or more) Yen.

That only helps for things that cost Canon Yen, all the stuff they pay for outside Yen, like raw materials, shipping, everything made in Thailand and the other 'foreign' plants costs more because of the Yen slip. Of course companies like Canon should be hedging to mitigate the general exchange rate changes, but going either way has its drawbacks.

The Yen is dropping a lot compared with US dollars, but not with all currencies, its the US dollar that is getting stronger.

I believe that Canon, like many other companies sells their products to their subsidiaries around the world in Yen. So, some of the divisions are able to boost sales by lowering prices, while others hold the line. We would not be seeing the lower prices if it were not for two or three big things.

1. Cameras are selling poorly, the supply is outstripping demand.

2. The US dollar is very strong against the Yen, and is getting stronger.

3. This creates inequities in pricing, and allows for a lot of gray market imports at much lower prices. The shift of sales to gray market forces Canon USA to lower prices or lose more sales.

 

[RGF]

Look at the Yen / Dollar The Yen is rather weak (you can get many more yen per dollar than six months or a year ago).

Canon can sell at a lower $ price and still get the same (or more) Yen.

That only helps for things that cost Canon Yen, all the stuff they pay for outside Yen, like raw materials, shipping, everything made in Thailand and the other 'foreign' plants costs more because of the Yen slip. Of course companies like Canon should be hedging to mitigate the general exchange rate changes, but going either way has its drawbacks.

Raw materials are only part of the issue. Labor, R&D, marketing, admin, ... all add to COGS. These are mostly (exclusively) Yen based. Over all their production costs are (I suspect) relatively fixed, so the weak Yen is good, as we are finally seeing, for US consumers.