Every time a camera is launched, our comment section is flooded with comments saying `it`s too expensive,` irrespective of what the price is set at. Are all the camera makers utterly out-of-touch with reality, or is there something else going on?
I`m going to explain the three main misunderstandings that I see prompting these comments. I`m not advocating for higher prices, nor trying to suggest that manufacturers never get it wrong, but just trying to highlight why cameras are priced the way they are.
A new model is always going to cost more than the outgoing one
Prices decline with time. No matter what your pricing strategy, an older product (particularly in a fairly fast-moving marking like electronics) cannot demand as high a price at the end of their lifecycle as they can at the beginning.
This may sound obvious, but the consequence is that a new model will always look expensive compared with the model it replaces.
The D780 was launched at the same price as the D750, so is cheaper in real terms. But heavy discounting of the D750 makes the new camera look very pricey.
This is the error we most often see: `How can they charge $2200, when I can buy the old model for $1400?`
To which the response is: `How can they not?` If you offer your new model at the price of the outgoing one, then what does its price look like, at end-of-life? Do you then have to match that price with the next generation model? That approach would end up with you giving cameras away within a couple of product generations, which isn`t exactly a winning strategy in an already contracting industry.
Prices decline with time, so new cameras tend to be released at around the same cost that the old one was launched at.
The alternative (launching to match the current market prices) is a pell-mell race to the bottom.
So cameras tend to be released at around the same prices that the preceding model was launched at. After all, camera makers ...
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