Financial Crisis & Photo Equip prices

I searched for this matter in this forum before but I didn't find anything. I looked also at other websites.

Do you think that photo equipments will be affected by this financial crisis?

I don't, but I know a friend of mine is holding off pre-ordering the new Canon bodies because she believes they'll drop.

Yes. Like anything else, reduced demand will likely drive down prices. This may not affect popular new releases like the 5D2 but overall I think you'll see a downward trend. Another effect might be that some of the smaller manufacturers might falter and/or get gobbled up by larger players.

Guy

It may result if fewer "new and improved" models being introduced every other week, hence longer life spans of current models, which would decrease costs due to larger scale of production.

I'm betting that prices of photo equipment are going to drop along with all other consumer goods. Already a 1% overall decrease is being reported for overall consumer goods. Not necessarily a good thing for a gasping economy but great if you still have enough moola to make purchases.

I imagine the used market will be good for buyers.

I wouldn't hold my breath for any substantial reduction in the near future. Bear in mind the least profitable area of selling photographic equipment is camera bodies. Competition in photo retail is very stiff, and while consumers have for the last few years have been seeing greatly increased value for their money in the digital world, it is unlikely we will see a major price drop.

This is the fourth major economic downturn I have been through. In the other three there was, by and large, no major price drops in photo equipment at the retail level.

The price of most things will go down. Bargains will inevitable be available in photo equipment. But used stuff might go up a bit as more people shop with a reduced budget.

Interesting topic. Regardless of the economy, cameras typically sell at MSRP when introduced and decline in price after that. the 40D is a perfect example. Whether the poor economy will accelerate the decline remains to be seen.

I assume we are talking prosumer level gear and up (40D, D80 and above). The market consists of serious hobbiest amateurs (like me) and pros. Unless the economy directly affects the amateur's job, I don't know that it will affect sales that much. It has to affect those pros whose products are optional for their clients.

There is always an upside to these events for pros. It weeds out the weak or overleveraged pro photographers and will eventually benefit the pros who haven't borrowed to the hilt and can survive. Kinda like a forest fire clears out the underbrush and benefits the surviving trees.

I don't really see the price of gear being discounted because of the economy. The price of gear has historically gone down because of competition. If the economy causes some of the players to drop out, prices could go up. Of course, I could be wrong. :)

Really, if there is a camera or lens you want, does it really matter if it is a couple of hundred bucks less or more (as long as the piece's competitors have gone up or down as well)? Personally, I am saving my money for a 5D2. Hope to buy it and a couple of lenses and make the jump to FF in the spring. But I will pay cash (as I have all my gear).

We have an addiction, after all.

I don't think the price will drop soon. There are a lot of orders outthere including mine. I'm sure many have cancled because of economic issues. The 5dm2 is very cheap for it's offering I was expecting it to be 3,600 like the old version. I'm astonished at the price for what it's capable of doing

Two issues not mentioned so far:

The price of your local currency against the Japanese yen. Most of the increase in prosumer camera and lens prices in the last 18 months has been the US$ sagging against the Yen and the Euro. The effect is to drive up prices in US$. As this recession settles in, what happens with national currencies may be a significant factor. I wouldn't know how to begin guessing what that impact will be over the next 12-18 months.

The other issue not mentioned so far is that a decrease in volume of sales means lower economies of scale in manufacture, driving unit prices up. The unit price for 10,000 camera bodies is much higher than the unit price for 100,000 camera bodies. I'd assume as demand contracts, this factor would drive prices up.

All of which makes it extremely difficult to project what's going to happen with the prices new prosumer camera equipment. Used equipment, on the other hand, seems very likely to decline sharply as hobbyists dump gear to pay the mortgage, as it were. Consumer-side demand for photos can be expected to decline as well, increasing financial pressure.

Your crystal ball may quite reasonably see things differently. A lot of smarter folks than me with far better data are being paid well to make these forecasts...

Prices have gone up 20% for Canadians buying new or used from the USA in keeping with the drop in the Loonie vs. the Greenback over the past 6 months caused by the drop in the price of oil and other commodities.

As a result, Americans buying used gear from Canadians might see some discounted prices.

Not sure about the Loonie vs. the Yen or Euro.

I'd tend to agree with Jim. If demand declines significantly and reduces production then we could face increases in unit costs, but then again maybe not.

I also think that R&D budgets will decline if the buyer market is smaller.

As I read this I'm sitting here listening to an ABC News report on decreasing prices of everything--its called deflation. Demand is down for everything and as I learned in my college economics classes when the demand curve goes down so does the price curve. Right now we have a situation where no one wants to buy anything let alone expensive cameras or photos. People will stop buying art prints and photographers will make do with their 8-12 Mpix bodies and the new 15-21 Mpix cameras will sit on shelves in warehouses. Eventually the supply will greatly exceed demand and in order to reduce inventory after the first of the year retailers will cut prices. Some will have to do it during their going out of business sales. So I'm going to sit it out and look for deals--Larry

I have bought thousands of dollars worth of used gear from eBay over the past year. This month I spent $1,155 for a D300, in August I bought a $900 Nikon 17-55mm f2.8. I've also bought about $3,000 worth of lighting the past year. I am currently closely watching for more used high powered monolights, battery packs, etc.

My take is that prices are not down. The D300 consistently sells for $1,200+, and I had to patiently turn in low ball bids for two months to get one for $1155. Used gear always drops a bit in late January through the about the first of March. I think most people are paying off credit card bills then, and many others aren't thinking of photography. (Not sure why that is considering February is my own favorite month to take photos!) This February could see more bargains than usual, possibly.

Prices have certainly NOT collapsed by any means, and I think they've held steady. Part of this is because of the rise of the dollar, and part is because I think the people who buy this stuff are generally better educated and have more secure jobs. Another factor is the price of gasoline. It's way, way down and that has freed up cash for many people. I fill my car almost every day (but employer reimburses me Monday-->Friday.)

I have another theory too. The general news media likes to hype things (remember what a disaster Y2K was supposed to be?) They have also become quite corrupt in many cases. I think they have been hyping all the bad economic news for political purposes the past six months. Many of them have done that in past elections. We'll have to wait and see if everything they report is suddenly sunshine and roses come next year. I'm betting that's what they will report.

Part of my job involves selling point & shoot cameras through mass merchandisers. I know everyone is nervous about sales this year. Dept. managers are being told to hold inventories down. I found out that just today Nikon dropped the price of at least one camera from$139.95 to $99.95 in Walmarts. I do know that the folks that buy those sorts of cameras are indeed watching what they spend, and $100 seems to be the magic price point this year for many of them. PS--if you use SD cards, go to a Walmart photo dept. first thing the Friday after Thanksgiving. While supplies last.


Kent in SD

I received an e-mail listing store closings. Have not verified with snopes.com or anything similar. Here are examples: Eddie Bauer to close 27 stores; Cache will close all stores; GAP closing 85 stores; Footlocker closing 140 store with more after Jan.; Zales closing down 82 stores and 105 after Jan.

If these are true we would expect photo stores to suffer as we all will. The unanswered issue is do sale points (stores) become centralized. A lot of money can be garnered for manufactureres to perhaps go direct or sponser just a few centralized, mail-order-type outlets for their products.

How much savings would be gathered to offset a price drop for products, of course, is not known. Nor is known how much demand, always a factor, will drop to to job losses and subsequent discretionary income.

I guess that answer will be known over time because it is a function of pure market economics, something which those in power don't want to allow to happen. But putting artificial money into the system which is not backed by anything is inflationary. So prices may not go down???

Chose your poison; none of it appears appetizing to me. But we reap what we sow. Buckle your belts; be happy with what you have for the moment, or win the lotto!!!

Larry

I can only speak from personal experience. My sales this year have been good right through October. I have a show this weekend and the market has dropped again. The reason I'm bringing this up is that when my sales go down I can't afford to upgrade equipment. My sales this weekend wil be an indicator of what the public is doing and it will also affect my decision process. If the income of professional photograpers go down the high end camera sales will be affected. On the other hand I bought a couple of 4gb CF cards for 28.00. Also if layoffs continue I believe the used market will certainly present some opportunities to those who can afford them.

Apparently Nikon not only trimmed some prices on P&S cameras at Walmart yesterday, but also some big ticket cameras at B&H. The actual dollar decreases are about the same for the D300 and their $140 P&S though. Obviously they are more worried about market share in the low end than the high end. Checking eBay prices I see that the D300 average price has dropped about $75 in the last three days. Not sure if that's because of economy or if people are now less apt to buy big ticket camera items for themselves and are now buying gifts for others. I don't know anything about the clothing business, but I have to wonder if the specialty stores are being hurt by internet sales? My guess is they are.

As is, I see two good things (for me) about current economic trends. One is that gas prices are about $1.74 per gallon now. I am once again thinking of driving out to places to take photos. The second is that airline tickets and other travel expenses have dropped. If the prices of used camera gear (especially big monolights) gets pushed down on eBay, I would see that as a bonus. So far haven't seen it though. OTOH, I also have a big pile of photo gear I need to sell off. I think I've waited too long now, and will have to see what next spring brings.


Kent in SD

I noticed that the price of Nikon lenses has gone up recently here in Canada. Two weeks ago The Camera Store in Calgary announced the upcoming price increases, the cost of the 500VR went from approx $7500 cdn to the now posted price of $8100 cdn presently advertised on their site. I consider their prices to be very competitive in the market. I assume it is the exchange rate at work, but still...declining demand, so increase your prices?

Canon 50D now down to $1185 at Amazon, $1165 at B&H and 17th St Photo. Started at $1200 the other day. At this rate they may get me to bite in about 5 days--Larry

Today the 50D just hit $1116 on Amazon and a couple other vendors have it priced at $1099, all including shipping! Wonder how much lower they an go as we get towards Christmas?

LJP