Nikon = hurting. (question mark changed to a period)

[AvTvM]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

 

[hbr]

CIPA reports something they call "fittment ratio," i.e. the number of interchangeable lenses shipped divided by the number of ILC bodies shipped. That number is consistently in the neighborhood of 1.6 to 1.7. That shows most folks buy one Rebel body with one kit lens and that's it. A smaller number buy the two lens Rebel kit. It's an even smaller number who have more than two lenses. Clearly the folks on this forum are not representative...

Thanks for that. That is a statistic I've always wondered about. The amazing thing is that when you stop and think about it, the number of people who own more than one lens must be minuscule. Someone who is better at math than I am can figure this out, but if I own six lenses (1:6 ratio of bodies to lenses) and the average is 1 to 1.7, then there must be a heck of a lot of people out there with only one lens, plus as you say, you have to account for all those folks buying two lens Rebel kits.

I currently own two cameras and eight lenses so I don't know if that makes me a giant or a microdot. HeHeHe. Maybe a "fropessional."

Seriously, I seldom sell the equipment that I no longer use. I usually find someone who is getting started in photography and give them the older equipment.

 

[hbr]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

For what it is worth, here is Ken Rockwell's take on the 5D Mark IV:

I'm so impressed that Canon chose to introduce this 5D Mk IV. Canon didn't need to; it already has this covered in the 5D Mk III that runs at 6 FPS, and the 5DSR has more resolution but less speed at about the same price. The 5D series sells very few cameras compared to Canon's APS-C DSLRs, so we ought to be glad that Canon actively develops new models that don't do much for Canon's profits (and eat into sales of other Canon cameras), but give us all more camera choices.

Bravo Canon!

 

[Loswr]

If you answer #1, you might be right. If you answer #2, you might be AvTvM.

try again. to make a valid point. without personal attack on me.

Let's try this: you make a correct statement, and I won't call you out for being wrong.

Hey, it could happen!

Edit:

Easy: *per unit* always the "premium" product.

That is a correct statement. Disingenuous, though...you certainly know you're not answering the intended question. So call it a D+.

 

[Woody]

Canon does well with DSLR's, their mirrorless and P&S sales are hurting.

They need a FF mirrorless just to show the market they are alive.

Canon has the largest market shares for both interchangeable lens cameras and P&S.

If their PS&S sales are hurting, then the remaining players are in far worse conditions.

As for ILCs, do you have any evidence their EOS-M cameras are not doing well worldwide? In Japan, they are #2 in position with 18.5% market shares for MILC. Olympus is ahead with 26.8%.

 

[Ozarker]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

*per unit* wasn't the question.

At McDonalds a Big Mac might be considered a Flagship product. It has a 3% profit margin. The lowly Coca Cola has a nickel's worth of syrup in it and a higher profit margin by a long shot. Saying a 1DX Mark II has a higher margin is pointless if only maybe 100,000 are sold. The Rebel line will beat it to shreds on the bottom line far and away.

 

[pwp]

I haven't owned a Nikon since I gave them the sack late last century, but I seriously want them to thrive and do extraordinary things, including making a viable profit. Without quality competition snapping at their heels, Canon would get even lazier with innovation rollouts.

-pw

 

[AvTvM]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

*per unit* wasn't the question.

yes it was. And for "overall contribution" to bottom line for a product category one has to multiply *per unit contribution* with *number of units sold*. I think we are in agreement on that, aren't we?

I initially wrote:
"Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line - even when they are not volume sellers."

Without *knowing* Canon's internal numbers I am pretty sure that EOS 1D-series cameras have highest margin in entire Canon (stills) camera lineup. This is not burgers or softdrinks, we are talking *premium priced* durable technical goods.

Of course a lot depends on how "research & development" costs are accounted for - e.g. if a certain AF system is developed first for a new EOS 1D series but later on also used in lower-tier series ... etc.

 

[3kramd5]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

I'm sure that's the case with many products differentiated by trim. However that isn't necessarily the case in all product lines, particularly cameras. Multi-year engineering costs, bill of materials costs, etc, for the premium cameras potentially dwarf those of the major production run cameras with minor year to year changes.

 

[Ozarker]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

*per unit* wasn't the question.

yes it was. And for "overall contribution" to bottom line for a product category one has to multiply *per unit contribution* with *number of units sold*. I think we are in agreement on that, aren't we?

I initially wrote:
"Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line - even when they are not volume sellers."

Without *knowing* Canon's internal numbers I am pretty sure that EOS 1D-series cameras have highest margin in entire Canon (stills) camera lineup. This is not burgers or softdrinks, we are talking *premium priced* durable technical goods.

Of course a lot depends on how "research & development" costs are accounted for - e.g. if a certain AF system is developed first for a new EOS 1D series but later on also used in lower-tier series ... etc.

You admit not knowing Canon's margins on products and then assume that because the 1D line is the most expensive it therefore must have the highest margin. Your assumption is wrong.

The more something is produced the less the per unit cost and the more the margin. Those are basic economic principles that are completely at odds with what you state.

The 1D line might not be profitable at all. It certainly is not the titanic contributor to the bottom line you think it is. There just are not enough of them produced to be that.

So no. Your initial "insight" was and is still wrong. The cheeseburger / cola analogy is a good one and still stands. Now, would you like some fries to go with that economics Slurpee you've got sloshing around between your ears?

 

[AvTvM]

CanonFanBoy ... you nick says it all ...

Yes, i assume. So do you and you sound off here as well. You come across as a really pesty little nitpicker. Like those idiot small dogs barking up some tree ...

 

[Loswr]

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?

Easy: *per unit* always the "premium" product.

*per unit* wasn't the question.

yes it was. And for "overall contribution" to bottom line for a product category one has to multiply *per unit contribution* with *number of units sold*. I think we are in agreement on that, aren't we?

You're so smart…you know more about making and selling cameras than Canon, you even know more about your fellow forum members' questions than they do!

No, *per unit* wasn't the question. When you start talking about the 'bottom line', you are clearly discussing overall contributions…and while the per-unit cost factors into that, as you correctly state, it's only one part of the equation.

I initially wrote:
"Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line - even when they are not volume sellers."

So you believe that the high end gear contributes more overall (per unit X unit sales) to the bottom line than the xxD/xxxD/xxxxD lines and non-L lenses. But as usual, you can't back up your claim.

Without *knowing* Canon's internal numbers I am pretty sure that EOS 1D-series cameras have highest margin in entire Canon (stills) camera lineup. This is not burgers or softdrinks, we are talking *premium priced* durable technical goods.

Of course a lot depends on how "research & development" costs are accounted for - e.g. if a certain AF system is developed first for a new EOS 1D series but later on also used in lower-tier series ... etc.

At least you admit that you don't know…but why are you 'pretty sure' the 1-series bodies have the highest margin? Surely, one so well-versed in business and economics as yourself understands that a 'profit margin' is a ratio of price to cost, usually expressed as a percentage. I mean...surely. Well, except for the fact that you think being *premium priced* is relevant for profit margin, which indicates your typical lack of understanding. The lowly fountain drink almost certainly has a far higher margin (price/cost) than any Canon camera. Just goes to show, you can lead a donkey mule ass horse to business school, but you can't make him learn.

As for your statement regarding the amortization of R&D costs into the margin, certainly that's on point. But considering that the higher end gear tends to get new tech, whereas the lower end gets mainly recycled tech (how many cameras reused the 18 MP APS-C sensor? and now the 24 MP one?; when was a new mirror/shutter or card slot included?) and hand-me-down tech (e.g. AF sensors, metering systems), it's a point that argues even more strongly for higher margins on lower end gear.

 

[AvTvM]

@NEURO: you seem to be leaking ... always more bully shit coming out of your mouth, asshole. ;D

 

[Loswr]

try again. to make a valid point. without personal attack on me.

@NEURO: you seem to be leaking ... always more bully S___ coming out of your mouth, asshole. ;D

Well, I guess if you lack the wit to make a valid point, you can always fall back on vulgarity. :

 

[dvunkannon]

It is certainly possible for a premium product to be low-margin, or even loss making. As an example, when Jaguar was a separate company its automobiles were all hand-crafted premium products - and the company lost money on every one sold.
It is also possible to choose to price a premium product anywhere on the profit-loss spectrum for purposes of capturing a market segment, enticing users to upgrade, brand identity, and many more reasons.
So there is no _necessary_ reason to think that the high end Canon bodies are outsized contributors to the bottom line of their business segment. Profitability is a choice, and many variables lead into the calculation.

 

[Mikehit]

The problem with talking about contributions to the bottom line is how the company decides to structure their prices between model ranges. If they price it so all cameras have the same $ profit, the % profit on the lower end models will be extremely high and probably will not sell. So they reduce the price on the lower end models which reduces the amount of gross profit coming in from that line so they have to increase the price of the higher end models - but if you go too far down that line the price of the higher end means they don't sell and people watching TV don't see their flagship models being used at the Olympics. It is a very careful balancing act.

You can then add lenses into the mix - do you cut the cost of bodies and hope people buy your lenses at a higher profit margin?

You also need to consider that many technologies are amortised across their whole product range - a sensor technology in the 5DIV may well appear in later xxxD models. If the sensor development has been paid for with the 5DIV, that means development costs for the later xxxD are slashed. But maybe the price of the 5DIV relies on the sensor being introduced to later models? You also need to consider that many technologies are amortised across their whole product range - a sensor technology in the 5DIV may well appear in later xxxD models. If the sensor development has been paid for with the 5DIV, that means development costs for the later xxxD are slashed. But maybe the price of the 5DIV relies on the sensor being introduced to later models and without that the price of the 5DIV would be even higher?

In crude terms: it all depends on which column the accountants put the numbers and when.

Am I supporting AvTvM's assumptions? Nope. All I ma saying is that it is extremely difficult to make any definitive conclusions on how much a given camera contributes to overall gfgross profit. But any company who relies on a majority of their profits to come from a (relatively) low-selling item is playing a high-risk game - small fluctuations in that flagship item (whether sales or supply chain) will have a disproportionate effect on the overall company profit margin. And given that everyone agrees that Canon is a conservative company it seems highly unlikely

 

[AvTvM]

... understands that a 'profit margin' is a ratio of price to cost, usually expressed as a percentage. I mean...surely. Well, except for the fact that you think being *premium priced* is relevant for profit margin, which indicates your typical lack of understanding.

You understand, ... I mean, surely .. that QUOTIENT [margin] = DIVIDEND [price] divided by DIVISOR [cost].

Now tell me again, whether *premium price" [= very high price] being the DIVIDEND in this operation, is *relevant for profit margin* or not ...

or in simple terms for non-economists: the higher the price, the higher will be profit margin at any given cost. Don't know what you learned about economics and business ...

 

[AvTvM]

Am I supporting AvTvM's assumptions? Nope. All I ma saying is that it is extremely difficult to make any definitive conclusions on how much a given camera contributes to overall gfgross profit. But any company who relies on a majority of their profits to come from a (relatively) low-selling item

well, I guess everybody here knows, that Canon definitely not only/pre-dominantly makes and sells premium-priced flagship products. Everybody is well aware of the gazillion units of Rebel/Kiss mirrorslappers releaased into the wild every year. So I guess, we can cut the argument short right there.

I still *assume* that Canon 1D-series carry high profit margins, despite costs also being higher than for digital rebels. Price certainly appears to be way more exaggerated than cost differential. But, none of us knows for sure. Well, maybe Canon sent their internal calculations to CanonFanBoy and Neuro .. who knows. ;D

Anyway, I will end this little nitpicking session here.

 

[Mikehit]

or in simple terms for non-economists: the higher the price, the higher will be profit margin at any given cost. Don't know what you learned about economics and business ...

But you talked about (and I quote)

Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line

The way I see to interpret that (and I accept it may not be what you meant ) is:

$ profit margin per 1Dx unit x 1Dx unit sales are greater than
$ profit margin per Rebel unit x Rebel unit sales

That may or may not be what you meant, but the fact that several people have interpreted it that way suggests that if it is not what you meant, you explained yourself badly.

There is a very high likelihood that that 1Dx unit profit is higher than a rebel. But that does not mean the accountant looks at their balance sheet and says 'the amount of dollars we are pulling in from 1Dx is greater than the amount of dollars from the entire Rebel range?

If you were not limiting yourself to the 1Dx, did you include the 5DS(R), 5DIII, 5DIV, 80D, 7D2?
If you definition of 'drool over' is any model with new tech then your statement may have some merit but it widens your statement to almost become meaningless.

 

[Loswr]

... understands that a 'profit margin' is a ratio of price to cost, usually expressed as a percentage. I mean...surely. Well, except for the fact that you think being *premium priced* is relevant for profit margin, which indicates your typical lack of understanding.

You understand, ... I mean, surely .. that QUOTIENT [margin] = DIVIDEND [price] divided by DIVISOR [cost].

Now tell me again, whether *premium price" [= very high price] being the DIVIDEND in this operation, is *relevant for profit margin* or not ...

or in simple terms for non-economists: the higher the price, the higher will be profit margin at any given cost. Don't know what you learned about economics and business ...

"At any given cost...," so you're suggesting that the cost of premium priced items is the same as that for lower-end items?

Let's compare the *premium priced* 1D X to the Rebel T6i...which quotient is larger?

1) $5,999 / $4500

2) $749 / $450

If you answer #1, you may think that *premium price* means higher profit margin. If you answer #2, you'd be correct.

Please explain again how the *premium price* numerator is the main determinant of the quotient? 'Price' is relevant for profit margin. 'Premium' is irrelevant. Don't know what you learned about economics or business...or math...or reading comprehension. :