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I shoot film. A compendium of photographic films and resources for the modern photographer.


How Leica Lost Its Way

Posted October 29, 2014 by Aaron Brethorst

Inner World

Inner World by Aaron Brethorst. Leica M6, Zeiss Planar 50mm. Tri-X 400 in D-76.

I woke up one day last September with an unshakeable need to own a Leica M. I hadn't shot a roll of film in over fifteen years, but something had grabbed me, and wouldn't let go until I had one. I knew that I could buy a Canon or Nikon SLR for a tenth of the price of a used Leica, but that didn't really matter. After a month of scouring eBay, I found an M6 in great shape for $950. Afterwards, I became interested in understanding what it was about the Leica M and Leica itself that had led me to spend so much on money on a 30 year old film camera, what made Leica unique, how they managed to create such a dedicated cult following, and why they charged such ludicrous premiums over their competitors.

What I discovered was a luxury goods maker—more akin to Louis Vuitton or Hermès—than the design-obsessed, premium consumer electronics company I had expected. I also learned the tragic history of a company that had, for decades, managed to succeed in spite of itself. One that had twice fallen prey to the Innovator's Dilemma, where a once-dominant company ignores a disruptive innovation in their market, and ends up ceding leadership as the new technology becomes mainstream.

Affordable Luxury

A few months ago, John Gruber, a popular Apple blogger, wrote up his thoughts on the Apple Watch within the context of Apple as a maker of 'affordable luxury.' He opens with a quote from Andy Warhol:

"What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it."

Gruber goes on to make the obvious comparison:

That’s what the iPhone and iPad are like. There are hundreds of millions of people who have bought these products, and they now own the best phones and tablets in the world. A few years ago at SXSW in Austin, I saw Michael Dell waiting outside a restaurant. The thought that popped into my head: He’s a billionaire, but I know for a fact that I have a better phone than he does. Not everyone can afford an iPhone, not by a long shot, but everyone who can knows they’re getting the best phone in the world.

If you're in a position where you can afford a smartphone (likely everyone reading this), you're in a position to own an iPhone. Maybe not the latest and greatest model, but the iPhones that are offered for $0 under contract are certainly no slouches. And, for what it's worth, I agree wholeheartedly with John Gruber: the iPhone is the best phone you can buy. However, I have to disagree with a comparison that Steve Jobs once made: the iPhone is nothing like a Leica.

When the iPhone 4 shipped, you could buy one under contract for $199 or $299. You know what you can buy from Leica for the same price as that high-end iPhone 4? A handgrip. If you want to be picky and instead look at the iPhone's no-contract pricing, you might be able to find a used Leica M4 for the same amount. Leica is not a brand that caters to any notion of affordable luxury. But, here's the fascinating thing: this has not always been the case. Some time in the past, Leica morphed from a maker of beautiful, expertly crafted tools priced competitively for professionals into something indistinguishable from a high-end handbag maker.

"We've always been at war with Eastasia"

I love my Leica M6: it's a beautiful camera, it helps me make great photographs, it's incredibly quiet, and it successfully brought me back into film photography. There's no arguing that there's something special about the industrial design and quality of Leica's M cameras and lenses. And yet, I mounted a used 50mm Zeiss Planar on my Leica, as I couldn't imagine I'd get four times the image quality from a Summicron. Still, I feel a twinge of poseurness from using an 'inauthentic' lens with my M6.

A common refrain I hear from Leica true believers is that Leica lenses have never been 'cheap.' They've always been the best equipment that money could buy, and have always been priced accordingly. However, this is patently false.

Photographers used Leica rangefinders because they were small, and light and offered a full system of lenses and accessories. Leitz optics were no better than its competitor Zeiss, and often not as good as the upstart Nikkor optics discovered by photojournalists during the Korean War...What made the ‘Leica mystique’, the reason why people like Jacques Lartigue, Robert Capa, HCB, Josef Koudelka, Robert Frank and Andre Kertesz used a Leica, was because it was the smallest, lightest, best built and most functional 35mm camera system then available. It wasn’t about the lenses.

"Leica Photography" Is Dead. Leica Killed It, Leicaphilia

Rewind 60 years, and you'll find that Leica cameras and lenses, although never cheap, were not always priced as luxury goods. Bob Cole on Rangefinderforum posted a price list dating back to October 1954, and what it contains is quite revealing:

Leica M3 without lens - $288.00 [$2,548.44 in 2014 dollars]

Leica M3 with 50mm Elmar ƒ/3.5 lens - $348.00 [$3,079.36 in 2014 dollars]

Leica M3 with 50mm Summicron ƒ/2.0 lens - $447.00 [$3,955.39 in 2014 dollars]

Leica M3 with 50mm Summarit ƒ/1.5 lens - $468.00 [$4,141.21 in 2014 dollars]

Ten years later (May 1964), despite better lenses, prices had actually declined!

Leica M3 without lens - $297.00 [$2,280.49 in 2014 dollars]

Leica M3 with 50mm Elmar ƒ/2.8 lens - $363.00 [$2,787.27 in 2014 dollars]

Leica M3 with rigid 50mm Summicron ƒ/2.0 lens - $447.00 [$3,432.25 in 2014 dollars]

Leica M3 with 50mm Summilux ƒ/1.4 lens - $513.00 [$3,939.03 in 2014 dollars]

In 1972, the Leica M5 with its questionable aesthetics was the latest M camera available. Its price was beginning to trend upwards:

Leica M5 with ƒ/2 lens [focal length not specified] — $849.00 [$4,834.65 in 2014 dollars]

Leica M5 with ƒ/1.4 lens [focal length not specified] — $948.00 [$5,398.41 in 2014 dollars]

By the end of 1987, Leica prices had skyrocketed:

Leica M6 without lens — $3,375.00 [$7,071.78 in 2014 dollars]

Leica M6 with 50mm ƒ/2.0 lens — $4,305.00 [$9,020.45 in 2014 dollars]

Leica M6 with 50mm ƒ/1.4 lens — $5,535.00 [$11,597.73 in 2014 dollars]

For comparison, the Canon 5D Mark III with a 24-105L lens costs about $4,000 today. A Fuji X100T, a small rangefinder-styled digital camera with a sharp 35mm-equivalent Fujinon lens, costs $1,300. But, a new Leica M-P with a 50mm lens will set you back almost $8,000, even if you choose the budget Leica lens.

Leica M-P without lens — $7,950.00

Leica M-P with 50mm Summarit-M ƒ/2.5 lens — $9,589.00

Leica M-P with 50mm Summicron ƒ/2.0 lens — $10,300.00

Leica M-P with 50mm Summilux ƒ/1.4 lens — $11,945.00

(Prices from B&H; current as of November 16, 2014.)

"For connoisseurs"

Recently I created an interactive timeline that depicts every Leica M camera ever released. It ended up being far more popular than I expected, and became one of the most popular articles that day on Hacker News, a news and discussion website for the software and startup community that I participate in. One comment on Hacker News in particular caught my eye, as it jives with much that I've discovered about Leica:

I don't really think [Fuji and Sony] usurped Leica's market. Leica's market changed a while back.

Sometime, a decade or more past, Leica became the equivalent of Louis Vuitton or Rolex. It's a luxury item. Like a LV bag, is still a really well-made tool, but functionality is only secondary. The actual capabilities are less important than the ideas of craftsmanship and exclusivity.

mattgrice, October 26, 2014

Relatedly, as I had been composing the timeline, this particular nugget on Leica's website about their new Leica M-P camera caught my eye:

"For connoisseurs who appreciate the details."

Not photographers, artists, photo-journalists, makers, or creators, but "connoisseurs." As if the Leica M was less a means to capture the decisive moment, and more of a status symbol. An adornment that wouldn't look out of place alongside a pair of bespoke Earnest Sewn jeans, or an oenophile's $200 bottle of wine. Not a tool, but a logo with which to adorn and differentiate yourself from the hoi polloi, and their Canons and Nikons.

In an era when full-size cameras are supposedly becoming obsolete, stars advertise their cognoscenti credentials by being seen with [a Leica M camera,] a war horse of 20th-century photography that many design fans now embrace as an art object, one that you seemingly need a movie star’s budget to afford.

— Alex Williams, "Click if You Can Afford It", The New York Times, September 19, 2012

Exclusivity comes at a price

The M3 was Leica's best-selling camera of all time, with over 225,000 of the rangefinders sold from 1954-1966. In comparison, Canon's AE-1 SLR saw over 1 million sales. One could argue that Leica and the Apple of the mid-1990s have many similarities: a dedicated but dwindling fan base, serious hardware issues, and products that are wildly overpriced in comparison to the competition. Apple was able to pull itself out of this tailspin through the monomaniacal focus of a visionary founder who was willing to sacrifice certain beliefs the faithful had long held dear, and who made a return to making fantastic products at a premium but not unattainable pricepoint his centerpiece goal.

Leica financial chart

Source: Leica Camera annual financial reports. n.b. the conversion rate between Deutsche Marks and Euros is approximately 1.96:1, hence the seemingly precipitous drop in revenue between FY98/99 and FY99/00. Even though the Euro didn't replace the DM until 2002, the annual financial reports I was able to dig up for Leica converted some, but not all, of their older financial reports into Euros.

Now, to be fair, we don't have access to Leica's finances since the company exited the public markets in 2012, but I'd be hard-pressed to believe that they've made great strides in overall marketshare in the past few years, given their "for connoisseurs" positioning, and that they were "looking to increase [their] market share to 1% of the global camera market" as recently as late 2011. You might point to the major jump in revenue and profits in 2010/2011 as evidence that their cameras are selling better relative to the competition, but, as it turns out, their 2010/2011 annual financial report specifically credits the end of the global economic downturn of 2008 and brand-licensing as two major drivers:

Marketing the licence rights and rights of use for the »Leica« brand and the related product names also represents a significant source of revenue.

Can you imagine Apple licensing its brand assets to other companies in order to bolster revenue?

Where it went wrong

During the first forty years of its existence, Leica stood out as the symbol of technological excellence in photography...But Leica ended up paying a heavy price for its long-lived dominance. Its problem was diagnosed years later by one of Leica's marketing executives as follows: "The company is too proud of its history and forgets all about the present and the future."

— Dr. Steven Schnaars, "Managing Imitation Strategies", p. 49

Apple's iPhone 6 marketing copy talks extensively about the beauty and design of the product, but it is also very clear that form follows function. The iPhone is designed to be used: to connect us, to entertain us, and to inform us. Despite some people's comparisons of iPhones and Leicas, I think the analogy is inapt. Leica instead positions themselves along the lines of a luxury watchmaker.

Leica's products were originally designed to be used. Take a look at photos of Cartier-Bresson's Leicas, or his favored collapsible 50mm Summicron. They were never babied or treated as collector's items. They show the brassing that you'd expect from a tool used extensively by a master craftsman. This was true not just for Cartier-Bresson, but also for all of his contemporaries. They chose Leica cameras because they were the best tool for the job at hand. But, at some point along the way, Leica stopped focusing on the next generation of photo-journalists and -enthusiasts and, instead, doubled down on catering to those who fetishized the Leica mystique.

By the end of the 1950s, Japanese camera companies, like Asahi (later Pentax), Canon, Nikon, and Yashica, were releasing advanced SLR cameras at a furious pace, culminating in the near-complete abandonment of their rangefinder designs by the mid-1960s. Leica missed the initial transition, and finally responded with the inferior and expensive Leicaflex.

The Leicaflex series never sold well, and its failure led to Leica collaborating with Minolta in the early 1970s on the Leica R series SLR. The first product shipped as part of this collaboration was the Leica R3, which sold well enough to save Leica in the face of the disastrous sales of the M5 and Leicaflex cameras. The R series collaboration was soon marred, though, by reliability issues with the R4 camera. Meanwhile, sales of Leica's increasingly expensive cameras were continuing to trend downwards at an alarming rate, with Leica selling fewer than 25,000 per year at the end of the 1980s in comparison to Minolta's 2.5 million units sold. Leica continued raising their prices to offset their decreasing number of sales, a vicious cycle that continues today.

In 1996, Leica introduced an incredibly expensive, commercially limited, but wildly innovative digital camera called the S1. Fewer than 200 of the cameras were produced in total, which isn't too surprising, given that they cost upwards of $30,000, required a continuous lighting source, and took upwards of 3 minutes to capture a photograph due to the scanning back. But, the camera was still years ahead of its time, and was not replaced with another Leica-made digital camera for a decade.

Wouldn't you by [sic] the D-Lux 5 rather than the DMC-LX5 if they were the same price?

The Mystery of Leica Pricing Explained

In lieu of improving the S1 and making it more suitable for a mass market audience, Leica instead rebadged a consumer-level Fujifilm camera as the Leica Digilux. The partnership didn't pan out, and Leica later opted to use Panasonic as their digital camera OEM instead of Fujifilm. The problem with all of these cameras is that—despite their Leica brand cachet—they performed identically to the much lower-priced consumer-level digital cameras to which they owed their heritage, thereby simultaneously eroding the value of the Leica brand and denying Leica's engineers much-needed expertise in creating digital cameras. It took Leica until late 2006 to introduce even a flawed M mount digital camera, by which point over 4 million DSLRs were being sold per year.

Today, the only thing saving Leica from becoming a historical footnote is their continued reliance on their coterie of die-hard collector enthusiasts.

'Collectors,' the sort of people who would buy a titanium MP, aren’t buying one so they can use it to take pictures. You’re not going to see a stubbled photojournalist pulling one from a beat up rucksack in some third world hot spot... But...Being old enough to remember when beat up Leicas were routinely pulled out of rucksacks in third world hot spots, I’m still emotionally married to the idea of the Leica as a functioning photographic tool...[Even] more depressing, go over to Rangefinder Forum or your favorite photo forum and join the discussion about which bag goes best with your M240 and attached Noctilux; while there, you can post pictures of your cat taken at full aperture.

– Leicaphilia - For Just $40,000 You Can Photograph Your Cat With a Titanium MP

Today, Leica is seemingly profitable, but—instead of being the world's #1 maker of cameras, a title that, notably, would go to Apple or Samsung—they managed to miss tectonic shifts in their industry twice, first with the SLR transition of the 1950s and 1960s, and second with the digital transition in the early 2000s. Most companies are destroyed by a single disruptive innovation in their industry, and it's incredibly rare to see a company survive two. Despite my feelings about those who buy into the "Leica Mystique," the truth is that these are the people who have enabled Leica to keep trying to find its way, 60 years after reaching their zenith.

I'd love to see Leica become a more mainstream camera company, but I find it hard to believe that—as long as they depend on catering to an elite audience that is more interested in looking cool than capturing the decisive moment—that they will be able to find their way.


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