You probably already know that apertures are 1.4x apart (f/1.4, f/2, f/2.8, f/4, etc.). Light also falls off one stop at 1.4x distances. But did you notice that Nikon is very close to using 1.4x as a pricing differential? Take a look at the FX lineup list prices at introduction:
- Z5 = US$1400
- Z6 II = US$2000 (1.4x difference)
- Z7 II = US$3000 (1.5x difference)
- Z8 = US$4000 (1.33x difference)
- Z9 = US$5500 (1.38x difference)
Had Nikon priced the Z7 II US$200 less and the Z9 US$100 more, we’d basically have a perfect 1.4x ramp (using CIPA style rounding ;~).
The real question is whether those are “real” price points or made up ones.
Back when the Osborne 1 was being introduced I had a huge argument with Adam Osborne about pricing. Adam absolutely insisted that the price be US$1795, but there was absolutely no reason to put the price at that number—and why not US$1799 if there was?—as there wasn’t anything comparable under about US$2800 (and that didn’t include significant software, as the Osborne 1 did). I argued that you could put the Osborne 1 price at US$1999, keep the extra US$140 (factoring dealer discounts), and not have any noticeable change in volume. That volume was about 50,000 units the first year, meaning that the difference between Adam and my pricing would have changed first year results by US$7 million dollars. Since Osborne eventually died due to cash flow issues, one wonders what might have happened if I had gotten my way on pricing.
But the question I want to ask is simple: are there specific camera price points that are well established? I’d say yes. US$2000 is where the camera makers first put down an anchor for significant digital camera price points (e.g. D100, which was announced slightly higher but quickly dropped to US$2000 along with its direct competitors). Not a lot has changed since. It’s the price point at which you still get a lot of volume, but you can also build a strong performance product that still nets you lots of profit margin.
However, as I was editing this article, the following became the actual pricing of the Nikon lineup:
- Z5 = US$1000
- Z6 II = US$1700 (1.7x difference)
- Z7 II = US$2600 (1.5x difference)
- Z8 = US$4000 (1.5x difference)
- Z9 = US$5500 (1.38x difference)
There’s certainly a price point at US$1000, and the Canon RP and Nikon Z5 are the only full frame cameras there. There’s also been another price point for a long time at US$1500, which is where the Canon R7 and R8 are. From there it gets trickier, but I’d argue that US$2000 and US$3000 are also critical points. Price elasticity of demand tells us that as you move higher, unit sales begin to exponentially fall off. Given how many cameras you can find at more than US$3000 today, I’d have to guess that the camera companies are fully happy with the volume produced by those higher priced products, and simply use them to goose their overall profit margin, a common Japanese consumer electronics approach.
The real volume that is worth discussing is between US$1000 and US$2000. The camera companies are no longer really trying to obtain volume via <US$1000 product, other than perhaps Canon, who is market share driven. But everyone has products in the US$1000 to US$2000 realm.
So here’s a question: do you believe there are specific price points between US$1000 and US$2000, and if so, what are they?
