Is enough too much?

End of the Rangefinder Renaissance?

The past four years have been the biggest years in 35mm rangefinders since 1960-61. Between 1998 and 2002, we have seen:

— The Yasuhara T981;

— Another generation of Kobalux LTM lenses;

— Ricoh and Pentax LTM lenses (1 each);

— The Hasselblad/Fuji Xpan with 3 lenses;

—  The Bessa L, R, T, R2, R2S, R2C, and at least 16 distinct focal length/aperture between these platforms;

— The Konica Hexar RF, and 5 M-Hexanon lenses;

— The Leica 90/2 AA, the Magnifier M, the M7, the MP and a new Leicavit; and

— Two Nikon S2 revivals with a new 50/1.4 Nikkor.

Reading some dealer comments and digesting the fact that there are only two Cosina products released at PMA (a 35/1.2 and some unspecified body), coupled with Leica's resurrection of the M6 (a new MP), tends to make me wonder about this market segment even more. Other than this, PMA was devoid of any significant new RF products.

In particular, I have wondered what the effect of Cosina's large number of product introductions over the last three years has been on the rangefinder market in general. In particular, I am curious as to whether Cosina single-handedly burned out the market.

1. How has pricing changed?

As far as I can tell, Cosina has opened a new budget category in the rangefinder world. Looking at the historic price points, it looks like the price point of the Cosina line is aimed at the bargain shooter, and we are not talking about mild discounts - the price point is aimed squarely at the price-point of Soviet equipment in the late 1990s, not the Leica market or even the market Canon occupied in the late 1950s and early 1960s (which was at that time low-price).

Let's take a look at the 28/3.5, which is a product Canon released in 1957. Cosina released a similarly-constructed Cosina product in 2001. We can safely use Canon for comparison, since Canon was the "bargain" producer in the 1950s, the original rangefinder heyday.

— In 1957, Canon released the 28/3.5 II lens. It cost (list) ¥25,300, which given the historic exchange rate of ¥360/dollar was $698.02 in today's dollars. Bear in mind that Canon was considered a discount maker compared to Leitz. That, of course, assumes that Leitz had a worthwhile 28mm lens back then (it did not; even the Zeiss 28mm was dog-slow) — but we can safely assume that the Canon 28/3.5 was not out of the price ballpark as far as Canon lenses went.

— In 2001, 44 years later, Cosina released its 28/3.5 Color-Skopar. That lens listed at ¥48,000, or $396.69 in today's dollars (or in other words, 57% of what Canon charged for a similar lens in 1957). Discounted, you can get it for $275 (39%).

Take another example: the 50/1.5 superspeed lens, long considered a premium item in the rangefinder world.

— The 1952 Canon 50/1.5 Serenar was a 7-element, 3-group Sonnar that listed for ¥36,500, or $665 in 2001 dollars. With two triple-cemented lens groups, this was not a particularly cheap lens to make.

— The 2000 Cosina 50/1.5 Nokton cost ¥68,000 ($624 in 2000 dollars). Discounted, it is $375, or 56% of the cost of the Canon in its time. Part of this difference may have been moving to a less labor-intensive Planar design.

To be fair, I don't know what Canons sold at when (and if) they were discounted in the 1950s. I don't imagine that they were discounted nearly as much as Cosina lenses are now.

2. How Does Cosina Sell For So Little?

The first question this raises, especially where some lenses share similar construction methods, is how the Cosina offering can be so cheap. In the 1950s in Japan, labor was relatively cheap. That is not the case now, where most mass optical production has moved to China, Thailand and Vietnam, where labor costs are commensurate with where labor costs were 50 years ago in Japan (relatively speaking). From what I have been able to surmise, Cosina has been able to save money via the following through some remarkable production engineering:

— Recycling SLR designs. Every model Bessa has as its base an SLR body that Cosina makes for several other camera makers. This eliminated the engineering effort and tooling expenses associated with the chassis, bottom cover, winding mechanism, controls and shutter (largely, although the shutter changed slightly from its SLR cousins). From then onward, each new camera requires only a viewfinder, rangefinder and top cover. Some of these bodies are nicer than others; the Bessa-R, for example, looks like it was at the bottom of the OEM catalog.

— Painted markings. The Bessa bodies are pretty remarkable in one regard: the name of the camera and its manufacturer are pad printed. In fact, the only engraved marking I was able to find on mine was "Made in Japan."

— Computer-assisted lens design. In the 1950s, lens design was done by ray tracing using an abacus (if you don't believe this, check out the Nikon Square corporate website sometime). Now, it is done by computers. The same industry-standard software that kicks out unremarkable prosumer zoom lenses can be made to kick out rangefinder lenses. RF lens designs are relatively simple.

— CNC machining. Some tooling costs can be saved by substituting CNC work for hand-machining of parts. Although there is some setup, things go directly from CAD drawings to production.

— Brass. Although some people seem to think that brass is a luxury material for lenses, it is in fact a huge cost-saver for less-heavily-constructed lenses. One of the reasons that Cosina lenses "brass" is that they are made of stamped brass, a material which requires minimal tooling. Die-cast lenses (such as the later Canon lenses and current Leica, Xpan and Konica lenses) require tools that can run as much as $40,000 per part. When you are talking about a production run in the rangefinder world of 500-1000 units, tool amortization can be half the net price of the item.

— Common barrels. Take the 21/4, 25/4 and 35/2.5 classic, for example. Changing focal lengths only requires that the pitch of the optical unit helix and the engraving be changed.

— Higher element counts. Erwin Puts thinks that Cosina lenses are retrofocus designs because the higher element counts allow more correction and the use of lens elements with lower precision.

Then there is, of course, the question of dumping product. I'll leave that to the economists and the lawyers. Suffice to say that plenty of manufacturers create "halo products" and loss-leaders to lend prestige to their other lines. Think of this: before the revived Voigtlander line, Cosina was not generally thought of as a high-end manufacturer of 35mm products.

3. What is the Size of the Rangefinder Market?

Short answer: a lot smaller than it ever was.

It's funny when you think about it. In terms of the Leica world, there are something like 12,000 Leica Ms made a year. Hexar RF production appears to be about half that (my latest body, acquired a month ago from Konica NJ, had a serial number translating 10,631 after two years of production). From what I have heard, Konica can break even on a complex body like the Hexar RF in as few as 1,000 units, and on a lens with a die-cast barrel in 800 units.

The irony of this is that the high-end market could actually post more sales than the market segment that Cosina is in. If a lens run with sophisticated tooling can be profitable in 800 units, then it is entirely possible that if stamped brass parts are used for economic reasons, an entire run at Cosina may be as few as 500. As one former distributor of Cosina products old me, if you sold "several hundred" of a product on a continent, it would be remarkable.

Consider the following:

— Cosina dealers have still not sold out of the Heliar 101 Bessa-T set, of which Cosina made only 1,500 units. A lot of dealers (including three near me and one large mail-order house in Europe), still have a large stock of Cosina products that they cannot sell.

— The Bessa-R sells for 1/4 of its original list price ($275 rather than $1,100). The R2 is already approaching half of its list (which was never as high as the Bessa-R).

— Konica had a lot of trouble selling 2,001 Hexar Limiteds, despite the fact that they came with a rather exotic 50/1.2 lens. Hexar RFs (the regular variety) now sell for 1/2 of their original list price.

— Leica had to fire-sale its flagship M6TTL (production: circa 250,000 over 17 years) by a considerable amount (33%), to say nothing of what it had to do to sell its Ur-Leica replica.

— The black Nikon S3 has not sold out.

Consider that the Canon P sold 86,000 copies in a two-year run. The Canon 7 sold 100,000 in a similar period. Rangefinders simply don't have the place they used to.

Despite the fact that there are claims out there that Cosina is doing a huge volume in rangefinders, I would be very surprised if sales numbers for their bodies (in the aggregate) approached 10,000 units. Because few dealers stock the Cosina line, and because most sales seem to be occurring over (and as a result of conversations on) the Internet, it is entirely possible that the majority of Cosina users are represented on the various newsgroups (which comprise a couple of thousand people, even including common members).

The tooling methods that Cosina uses (especially declining to invest in high-volume die-casting tooling and making its RF bodies largely from SLR parts) seem to suggest that Cosina does not view the RF market as work sinking a huge amount of capital into. And who could blame them?

Demographics are a further complication. I suspect that as the number of living Leica users declines, more and more used product will find its way into the marketplace, possibly suppressing new sales.

4. Does Cosina Affect New Leica Sales?

I believe that the answer to this question is yes, but not in the way you might imagine. From my observations of various Leica-worship societies, there are three major categories of buyers:

(1) People who purchase current Leica-brand items at full to 3/4 price (whether they be professionals or salivators);

(2) People who purchase previous-generation Leica-brand equipment at 1/2 to 1/3 the price of current offerings (formerly 70%); and

(3) Bargan shoppers who buy the cheapest thing there is that achieves 80% of the results at 20% of the price. This can also be someone who for some purposes would be in #1 or #2, but doesn't need, say, the top 21mm lens, just a competent one.

I don't think that Cosina is eating Leica's lunch in Category 1. From what I have been able to observe, it is making a strong showing in Categories 2 and 3.

Back in the day, from what I am told (by my source, who worked an East cost pro shop when there was no such thing as a D1x):

Category 1 buyers would cash in their old equipment (at a steep loss) when something new or different came out. Since a lot of Category 1 buyers were pros who could write the equipment off, it was "like turning in your whiskey bottles and getting back 25% of teh purchase price."

Category 2 buyers would then buy the equipment turned in by Category 1. Dealers would take the profits from Category 2 sales and use it to subsidize their new Leica stocks, which didn't then (and don't now) make them much money.

Category 3 shoppers would buy used Nikon or Canon SLRs, and later buy Canon or Soviet lenses. I am informed that Canon equipment was pretty thin on the ground and that the Soviet equipment only recently showed up in any quantity.

Today, a lot of used equipment is passing through Ebay. This means that dealers have less money to stock new Leica gear (which is something of a loser in terms of profitability - as is and was any equipment)). This, in turn, is probably having an effect on Leica's projected order quanitities, from which it sizes its manufacturing runs. Smaller runs make lenses more and more expensive. The move of used equipment to Ebay would have this effect whether or not Cosina started selling these products.

The entry of Cosina — selling products that meet the 80/20 rule with Leica's current products — makes older Leica products worth less on sites such as Ebay. An old Summicron 35 fetches less money now than it did three years ago, having at least a theoretical impact on the seller's ability to upgrade to a newer Leica product. The effect of Cosina's Leica-related product blitz (which can best be described as making one of everything within a 3-year period) raises the specter of creating this effect over a large number of products. But the other relevant factors are many:

— "Leica recidivism" - the degree to which Leica users upgrade to other Leica products rather than defecting to SLRs, digital, etc. In other words, if there is a market contraction, why is it occurring?

— The economy - always a factor. Rangefinder cameras, except for the toughest, most professionally-oriented ones, are toys for the relatively well-off. Disposable income has taken a huge hit lately, and can that be expected to affect the size of the market?

— Market saturation, both in terms of product range (too many choices chasing too few users) and sheer numbers. How long can the market absorb 2 Leica 35mm lenses; 2 Konica 35mm lenses; and 4 Cosina 35mm lenses, all of which fit basically the same cameras?

— Perception of value in an increasingly-digital age. The eight 35mm lenses named about range in price from $225 to $2200 in price. Only the cheapest one is competitive with mainstream SLR lenses in price. Even then, it cannot be fitted to digital bodies, as the SLR lenses can.

It's hard to separate these factors in such a way that Cosina's market impact can be measured.

5. Conclusion

Cosina make a lot of neat stuff. Whether Cosina enteres a particular market is of course its choice, and Leica is by no means entitled to a monopoly. Be this as it may, users should be wary of claims that Cosina somehow saved the rangefinder.

DAST

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