On the future of Leica

Reacties uitgeschakeld voor On the future of Leica
maart 4th, 2015 Permalink


Leica’s sudden change of CEO causes some stir in user groups and the blogosphere. As I have been very outspoken about Leica and their problems myself in user groups and on this blog, let me add a few things here. Bottomline: I think Leica went through a couple of very dark years, and when the end of the tunnel was near, the M9 sensor blew up in their face. I think that dealing with that problem currently is draining teams resulting in some quality control issues on regular products (lenses, etc). Leica will fix it, but at what price? In the meantime they have to improve their sales and manage the relationship with their investor. That new CEO might just do that.
Now on to the La Vida Leica article. I disagree with most of it, so let me explain.
The title is somewhat tongue in cheek of all those that have forecast Apple Inc. as going the way of the dinosaur Any Day Now(TM) over the years.
I guess the writer means the Apple of the 90’s as the current Apple is a healthy as a company can get. The Apple of the 90’s was the Apple that lost focus of its core-ability: taking the customer into the future. Due to investor’s pressure the Apple of the 90’s introduced way too many half baked products. In the end the company had to be bailed out to avoid bankruptcy and they had to buy competitors to literrally get their mojo back: Steve Jobs and the foundations of a next generation operating system.
Leica currently is nowhere near Apple’s situation of the 90’s, but they were close a few years ago. Kaufmann saved the day and got some help later from Blackstone. Leica currently has a new factory, they already made the change from CCD to CMOS, have a great partnership with Panasonic and a decent retail presence. And yes, product-wise things could have been better, but Leica is nowhere near those pre-M8 days.
In fact, we find it extremely doubtful that Panasonic will get involved.
I disagree as I see Panasonic getting involved fast. Panasonic needs strong brands to survive in retail. They know it. Panasonic just revived Technics for the high-end audio market. Leica would be a good fit in photography and a logical expansion of the current partnership. I mean in Japan Panasonic is god, but for the rest of the world it is just a vague company producing ‘things’. Even worse: you don’t know half of what Panasonic actually produces as most of it is being done as OEM. Panasonic manufactured goods live in your kitchen, living room and car under a different brand. And yes of course, even in your photo bag as it produces a hell of a lot of stuff for Leica already.
I know Panasonic reasonably well as I have worked with them in two capacities: as an OEM client/partner and as a stakeholder in their R&D. Panasonic is an amazing company. It’s big, but business units operate independently. Some even as startups. Quality Control at Panasonic is unbelievable. Leica can learn a thing or two here. But the down side: things sometimes take ages at Panasonic. As in ‘two years’ for a simple spec change. Panasonic clearly isn’t a Samsung that just vomits products on the market to see what’s being eaten. Panasonic has terrible marketing and sub-par product design (don’t ask me why), but their engineering and production quality are unequalled.
I actually do see a good match. Both Leica as Panasonic are very proud companies, with engineering, quality and tradition in their genes. Basic culture might be different, but Leica can have a great future as Panasonic steps in.
What is true however, is that Leica is sitting on a ton of inventory that’s not moving. Have you noticed how you can buy pretty much anything now, without the year-long waits of old?
In the past Leica has had manufacturing issues that prevented stuff from reaching the market. They were developing a replacement for their CCD M line and that clearly took lots of time and resources. A big chunk of the company was devoted to development of the M 240 and it resulted it back log in all fields. That gave waiting lists of over a year. But now those waiting lists are almost gone, meaning that Leica has got it production back on track. They have built a great new factory in Wetzlar and expanded their retail presence tremendously. And those retail developments are a good thing as shops will help sell high end products where stuff in the mid segments will be bought online. Enter that new CEO.
Somewhat interestingly, Schopf came from a background in optics – Kaltner’s is marketing – and is essentially an outsider to Leica. That is, no one from within was promoted.
Dealing with an investor like Blackstone is always difficult as they focus more on the short term (sales, sales, sales) then on the longer term (R&D). Might be the case here too.
On the other hand, Schopf might have been the ideal process manager fixing manufacturing & procurement, building a new factory, overhauling and expanding the retail channels, engineering the Panasonic partnership and organizing the move to that new factory. Hell of an achievement for a leader. Sales just might be his lesser trade, which never was a problem as demand clearly outstripped everything Leica could produce. But today things are different. The chocolate factory produces volumes of great products and they now clearly need someone that can ignite sales. Kaltner just might be that guy.
The “new M” or the M Monochrom based on the current model; the latter should have been out last September at Photokina… And we’re still waiting for it.
I see this as a good thing. They are not rushing it, but hopefully chose to finetune their new releases to avoid quality issues in the future. If this really is the case, it says a lot about the relationship between Blackstone and Dr. Kaufmann. Remember: the Apple of the 90’s wasn’t able to withstand investors, Kaufmann then clearly is.
I don’t believe in the other scenario where Leica might be withholding new products because of heavy inventory of current models. The sensor problem of the MM alone demands an imminent release of the CMOS based version. That they don’t release it, while (probably) having a 99% ready camera available says a lot (also about Andreas Kaufmann). And the M240 only got its M-P edition last year, so a logical replacement will take at least another year.
And Leica does have a little bit of time to develop that next-gen camera, although competition is moving in. But Leica has already made great progress. With the M8 they made the transition to digital. With the M9 and M240 they have been catching up. Both weren’t completely there spec-wise but the gap was small enough to stay relevant. The T is an interesting testbed for technology that will certainly make it into the M and S. And the Panasonic produced models should bring the volumes a global brand needs.

The recent Lenny Kravitz and Safari special editions would usually seem to signal that the time is coming (but we’re thinking April, at least).

Other recent models also have some scratching their heads. The Leica M “Edition 60” for example, seems to honor the film Leica tradition at its heart by omitting the LCD, but on the other hand is fashioned from stainless steel

And yes, to stay top of mind they released many special editions. Too many I think and I’m annoyed by it given eg those old sensor problems. It might steer away users that are kept in the dark with a fawlty (expensive) camera or indeed a ticking time-bomb, while Leica appears to be throwing parties celebrating yet another one of those collector’s items.  On the other hand: if it helps to keep this great company afloat then so be it. It can be worse than a Lenny Kravitz designed Leica: any buyers for a Hello Kitty edition?
Twitter: @royalty
More Leica: Will Leica get its mojo back?

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