The Price Penalty


  • 16mp DX camera with 28mm equivalent f/2.8 lens: US$1100
  • 16mp APS camera with 28-70 equivalent f/3.5-6.4 lens: US$2850

Now, if these were DSLRs we were talking about, we'd be expecting some fantastic new capabilities, state-of-the-art sensors, high frame rates, big buffers, and more. But they're compact cameras with minimal features, a generation-old sensor, lowish frame rates, small buffers, and neither come with a viewfinder (optional in both cases). 

If you haven't recognized the two cameras in question, the first is the Coolpix A, the second the Leica X Vario. The one thing each has going for it is the image quality the lens produces on these sensors: very good corner to corner results, even wide open. But is that enough to justify the price tag? 

Probably not. In talking with dealers, the Coolpix A isn't really selling. Nikon's lending copies to NPS shooters at the US Open this week (the Coolpix A can be configured for silent running), maybe that will get them a few sales. The dealer I bought mine from has sold one: to me. 

Thing is, from the standpoint of image quality and even usability, the Coolpix A is a very good camera. I actually enjoy using mine. But this high-prices-for-small-cameras trend is producing a problem for me in reviews: how do I correctly convey that something is a great product but a lousy value? Do I really want to encourage or discourage someone's purchase of these cameras? I'm sure I'll work through that problem soon enough, but it's not just my problem. As I noted, the Coolpix A isn't selling. So Nikon has a problem, too. Leica will shortly, as well. 

The camera makers are scrambling at the moment. They're all looking for anything that will have some faddish attraction that gets the buying rolling, but they're all also looking to return to historically high product margins. The years of making negative dollars off their compact camera businesses have been draining, and now that this business is rapidly swirling down the toilet bowl of consumer electronics history, they seem to think they can jump from negative margins to super high ones for some reason.

Unfortunately for the camera makers, the public isn't stupid. They understand value. They see 18-24mp APS/DX sensor DSLRs for far less money than these compacts, and those DSLRs have viewfinders, flexibility, and performance. This puts a huge burden on the camera makers to explain why you have to pay more for less. As I've noted for nearly 20 years, the Japanese camera makers don't exactly have the best marketing departments in the world. Far from it. So they launch something with words like "Meet the new flagship of the Coolpix Advanced Performance collection" instead of "High-end DSLR image quality in a camera that fits in your pocket." Not that such a line fixes Nikon's price problem, but it at least explains why you'd want one. And by the way, Nikon, you're now over-using the word "flagship"—apparently the Nikon navy is full of flagships now. I hope they have enough flags.

The sweet spot for cameras is US$500-800. In that range you can find an astounding range of cameras of all types that can produce images you'll be able to brag about. Compacts such as the Sony RX-100 and Fujifilm X20 live in that range. Mirrorless cameras such as the Panasonic GF6 and Sony NEX-5R live in that range. DSLRs from the Canon SL1 to the Nikon D5200 live in that range. If you wait until the end of a product's life, you can even find products at 25% less or more that are almost as good as the state-of-the-art, which brings us down to the US$375 mark. 

When you put out a product above that sweet-spot, it better have a good, marketable reason for being outside that range. The further we get above US$1000, the more amazing the product has to be. Note that Leica X Vario is priced at about the same as you'd pay for a Nikon D800 (though you'd still need a lens for the D800). An X Vario isn't going to outshoot a D800, so why's it priced up there? Leica didn't tell us in their announcement. They mostly said it was better than other compact cameras (it should be at 5x the price) and that it was a lot like the higher cost M in many ways (so why's the M so expensive? ;~). 

I doubt we've seen the end of the we-want-more-for-this-than-you're-willing-to-pay camera releases. I'm looking forward to finding the exact-product-I-want-at-the-price-I-want-to-pay camera some day. At the moment, the search is illusive. 

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