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Old Sep 14, 2012, 6:09 AM   #1
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Default Overpriced?

It's something we hear a lot. Usually for new announcements of cameras or lenses.

"It's overpriced"
"A rip-off"
"What a joke"

I thought it might be interesting to have a discussion about what that means.

Sometimes (quite often) of course it simply means that the poster would really like one but can't afford it. While this is unfortunate, it doesn't mean the item is overpriced.

The supply side is complicated. Every camera or lens is made trying to reach a compromise between optical excellence, utility, convenience, size and weight, price, image quality, etc. We all want small, cheap devices that are optically perfect. Maybe in 50 years we will be able to have that, but not yet. So there are compromises. And price points. And things are complicated by taxes, legal requirements, shipping costs, marketing departments, economies of scale, natural disasters, raw materials costs, etc. Manufacturers have to guess how many they can sell at a particular price point to make the best profit for their business overall.

We all know about a demand curve right?

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

Basic economics - the idea that if something is very cheap lots of people will be willing to pay for it, and as the price gets higher it becomes "worth it" for fewer and fewer people.

A lot of the reactions that say something is "overpriced" are accompanied by how much the person thinks the item should sell for. These posts are clearly just telling everyone where they happen to fall on the demand curve for that item. Sometimes this s also known as "sour grapes". They can't afford it and are annoyed by the fact.


But can "overpriced" mean something else? I think in some ways it can. For example say that two manufacturers each produce a camera that is almost identical in every way that matters, but one costs double the price of the other. Well in that case I think it does make sense to say that the more expensive one is overpriced. It gets a lot more complicated though because two cameras or lenses are never exactly alike, so one is left juggling a complex matrix of features against price, and how the individual values those features.

It's what sites like Steves are for - to try to find the best value-for-money cameras at different price points and for different purposes. And it's why the "What camera should I buy?" forum is always interesting.
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Old Sep 14, 2012, 9:45 AM   #2
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Good post!

I've considered all electronics not just cameras to be overpriced
You buy a laptop today for 2k$, next week you can find it at a discount shop for 500$ or it almost seems that way.
Guess with high tech you also get high speed obsolesce and a need (real or imagined) to constantly update.
And today's cameras are nothing but handled computers.

About to show my age
Used to be you bought decent kit like a F1 an EOS 1, or medium format and the body would last decades and be easily serviceable if needed.
Now mid-range (prosumer) bodies cost the same as the top end pro film bodies used to. The top end bodies are higher than what medium format used to cost. And they only last a few years at most.

Progress!

<just my personal opinion here>

I think the current direction is great!

Entry level units are under 1$k, prosumer bodies are in the 1-3$K range and pro level kit running 6$k (d4) - 13$k (EOS 1d-c) for now.
Tends to segregate the type of equipment to the level of user.

A gap that will broaden even wider if the trend continues to cinephotography capable pro bodies.


<What baffles me>
is a move like Sony with their new RX1,
I just can't see that 2800$ point&shoot selling in high numbers to make it worthwhile for a high volume mass marketer like Sony.


<what I don't like, really my opinion have no concrete proof of the practice>
Is the apparent price fixing/setting going on in the industry.
Prices seem to be externally set and that is what every shop that carries a body will be charging for it.
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Last edited by PeterP; Sep 14, 2012 at 9:56 AM.
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Old Sep 14, 2012, 10:54 AM   #3
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Great discussion.

Peter - price fixing - what you're seeing is the "Apple" model in many cases. Manufacturers have realized that it hurts their perceived value if their products are sold at discount prices. What they do not want is competition among distributors for their product - they wan their product competing against other brands.

Now - as to life expectancy - IMO, there are 2 reasons why we see this:
1) devices today are more electronic than mechanical. There are just more failure points.
2) Market driven on both sides: Manufacturer loves the idea of planned obsolescence but the consumer behavior says they want a new toy every few years. So, adding cost to the manufacturing process to increase lifespan is counterproductive because the consumer wants the shiny new object. Case in point - the iphone. Lots of people want the shiny new version even a year after buying the 4s.
3) The technology is still growing - there are just a lot of technological advantages now. Look at the entire decade of 1970s - not a whole lot of technological advantage took place with cameras compared to what we see in the digital age.

Finally - consumers get upset because they think as technology advances products should get cheaper to buy. Unfortunately, companies need to grow sales dollars year over year. So they want to keep those price points up - you get more features than prior generations but prices go up. Look at lens prices as companies like Nikon and Canon replace older designs - they're enormous. They have improvements to make the consumer believe they're worth the extra money. But, it is not in a company's best interests to reduce prices - they will continue to add features to keep the price up.
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Old Sep 14, 2012, 11:16 AM   #4
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Quite simply what I find is when a product ie camera, is on sale in the USA for , we'll say $500, over here in the UK it's usually 500. So to me it's over priced, if it's made in Thialand then it ought to be approx the same price in what ever country it's sold. I dont see how it can be worth 50% more just because it's sold over here.
I understand there will be tax differences but the gap if too big IMHO.
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Old Sep 14, 2012, 11:22 AM   #5
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The UK-US price difference is very disconcerting.

20% is just VAT of course, US prices are quoted without sales tax.

Also there are often EU import duties on cameras that can do video, which is most of them nowadays, which accounts for an extra 15% or so.

Finally in the EU they have to provide a 2-year warrantee which is probably worth another 10%.

Transport and distribution costs are generally higher in the UK too. All in all it probably comes to explaining most of the difference.
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Old Sep 14, 2012, 11:55 AM   #6
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Quote:
Originally Posted by PeterP View Post
<What baffles me>
is a move like Sony with their new RX1,
I just can't see that 2800$ point&shoot selling in high numbers to make it worthwhile for a high volume mass marketer like Sony.
Just curious -- is there any price point that would make you want to own the RX1? For me, the thing that baffles is who the customer is intended to be. The lens is a Zeiss, which certainly gets your attention. The sensor is full-frame, which does likewise. But 30mm is too wide for general-purpose photography on a ff, and a non-interchangeable prime lens just doesn't excite me, even if they'd gone the more usual 50mm. A conservative 25-75mm zoom or so might actually seem attractive. But I really don't get the design as it stands at any price.
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Old Sep 14, 2012, 12:13 PM   #7
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When manufacturers set the suggested price on new gear, it is one that will make the company a good profit at the expected demand level. In many cases, the demand, at that price point, is less than projected, so the price is lowered. That item was 'overpriced', from an objective view.
Usually, when we say that an item is overpriced, we are giving our opinion of what we think the price point should be, or what we would be willing to pay. (not necessarily the same thing - you couldn't give me a Ford, and probably couldn't pay me enough to drive one, but I can venture an opinion on the pricing)
As to the EU and UK pricing, I think you should take a wider view - I would be willing to trade higher consumer prices for a health care system which wouldn't impoverish my wife if I developed a lingering disease. (average private insurance in U.S. is $16,000 annually for an individual, and covers only 80% after deductible) Spending a bit more for a camera is a bargain in comparison.

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Old Sep 14, 2012, 1:24 PM   #8
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For a P&S the most I'd be willing to shell out is in the 100-300$ range.
If the RX1 fell in that range I might consider it, but having that fixed lens is a big downside for a P&S, even if it is a zeiss, which I doubt many P&S buyers would care about.

Maybe the next model will have interchangeable lenses.
and becomes a normal FF mirrorless camera.

Quote:
Originally Posted by tclune View Post
Just curious -- is there any price point that would make you want to own the RX1?
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Old Sep 15, 2012, 12:47 PM   #9
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You name it, and it is over priced. All the way from aspirin, to zucchini. This insane over burdened bloated economy, will be the end of us all. But the thing to do, is just keep feeding it. Talk about biting the hand, that feeds you.
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Old Sep 15, 2012, 1:07 PM   #10
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What I've always found intriguing is the way cameras have always held their price well, in relation to other consumer electronics.
TV's used to cost a bomb for a new one- as did VCR's- but in time the prices fell.
LCD TV's were VERY expensive on release,as were HD ready TV's,then Plasma's and LED backlit TV's also- yet they're all relatively inexpensive now.
For the price of a G12 Canon you could by a very large TV these days...!!
DVD players the same- once expensive- now the price of a good fish supper..!!

But not so digital camera's- certainly DSLR's and quality compacts.
They've never been in the "impulse buy" range for most of us- and I don't think they ever will...!!
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