The Myth of outrageous new Canon lens prices...

Wilt wrote in post #14288502
That is clearly 'because they can' pricing, to offset the slimmer margins on lower volume, lower demand lenses.

Supply and Demand. In a capitalistic environment, people and companies should charge the most that they can to maximize their revenues. A well run business not not charge X% markup; they set prices to maximize profit. If the price goes to high, the customers will go to Nikon.

This is the same for employees, most employees don't look for a job that covers their basic costs, they look for a job that will pay them the most they can get for the skills that they have to offer.

1DS wrote in post #14285868
in the UK the 24-70 mkI costs £989
mkII £2299

so I agree the mk II is overpriced here too!

Are you looking at the Price of the MKI at its original release? That would give you a better perspective on the MKII introductory price.

For the US:

Canon 24-70 MKI MSRP $2100
Canon 24-70 MKII MSRP $2299

So a 199 dollar increase in 10 years? And this is with the stronger Yen which we have seen affect the price of the canon 5dmkIII as well. Not a massive jump here. Expect like everything else for the price to drop from the initial one within a year.

1Tanker wrote in post #14288427
That's a poor argument, and goes along with the theme of.."they're charging that price, because they can".

The other part of that argument does go along the lines of, if they are making zoom lenses that "compete" with primes, there is a heck of a lot more engineering that goes into the design.

Zoom lenses are inherently compromises. With a prime lens, you make the glass for one very specific focal length, so you can shape the glass as needed to perform to exacting specifications at that focal length. With zooms, however, those elements in the lens have to be able to correct the light path at a range of focal lengths, which all need different sorts of correction to the light path.

So, if Canon has made all the right compromises, to the point where the lens is being talked about as a prime lens replacement, that's impressive.

Maybe I should have expanded my argument the first time around, but I was apparently initially under the impression that everyone would be able to read my mind via text on the interwebs..!

andrikos wrote in post #14280421
Hello,

I've been reading (and drooling over) about the new lenses that Canon is releasing (and has released in the past couple of years).

I must admit that the most common reaction that I come across is the (understandable) disappointment over the $ and € price increases over these products.

One common comment is that Canon is "taking advantage" of its dominant position in the market and increasing the prices of its lenses in order to "rake it in"...

So, I decided to separate the facts from the myth and took a short visit to the "Canon Lens Museum" in order to take a look at historical prices of the EF lens lineup.

I sampled the price of a few lenses (all f/2.8L except for one) that have had different iterations/updates over the years to determine exactly how "outrageous" the price increases have been.

Surprise, surprise! The latest versions have actually had the smallest price increases (ave % price increase per year) compared to their previous brethren...

Of course, it doesn't change the fact that the new lenses are expensive, but what I conclude from my short "research" is that Canon is not really at fault here, but rather the exchange rates. For some reason, unbeknownst to me, the Japanese Yen has been very strong compared to other currencies.

Of course people will use electronics prices (also Japanese made) to "prove" that my point is wrong, but don't forget that glass is glass and does not follow Moore's Law. Glass does not get smaller/faster/cheaper every 24 months...

I hope you find this interesting. I thought it was so I decided to share...

PS I'll be updating this regularly, so feel free to come back and revisit the new data.

Yes, but the bottom line is the new lenses are taking a big price jump over their existing counterparts. For example, the 600 f4 current version is roughly $9,000 whereas the new version is $13,000 a 44% jump. Now I assume canon is still making margins selling their existing 600mm lens for $9,000... Just think how much more margin they will be making selling the new one at a 44% premium. Yes, development costs need to be recouped....but not on the 1st 100 lens they sell.

Mistabernie wrote in post #14281251
Hope you dont mind if I link this around a bit.. it kind of irks me when people complain about the 'wicked high prices' of Canon's new offerings. Any chance you could do this with the primes that are coming out too?

What...you are happy to open up your wallet and hand over more than $10,000 for a lens. Give me a break. Maybe we all should pass around a cup and dig deep into our pickets for the "Canon Fund".

The iPad has not change pricing in 3 generations, yet has increased both functionality and features with each generation.

chantu wrote in post #14284651
Hmm, this table looks like some like some marketing folk would put up. Does anyone question these numbers? Case in point:

24-70mm (Mk I) 220,000 yen
24-70mm (Mk ii) 230,000 yen

Yet the U.S price difference is over $1000 USD. Can this be explained simply by inflation (which has been very low this past decade) or exchange rates? I don't think so ...

Is the 24-70mm (Mk II) overpriced? Yes!

Your last statement is the bottom line. The 24-70 mkii is overpriced.

andrikos wrote in post #14284768
Your thoughts are very understandable, we all fall (unless you're a billionaire) under the same category. Unfortunately, it's not Canon's fault you don't get paid in Yen... Do I see a civil action lawsuit coming up maybe?

There's no rationalizing going on though, it's all cold (not very) hard Math.
It's obvious that Canon has not "gone off the deep end" with their prices, especially their latest products. That much is pretty easy to see. No?

No... Compare the prices of the new lenses with the ones they are replacing. Huge price jumps. Now do you think Canon was selling their old lenses 24-70 mki at a lose? Not a chance. So the new lenses which are selling for a huge premium over the mki lenses are making a huge profit for Canon...no two ways around that.

RDKirk wrote in post #14285950
The Canon Camera Museum lists the introductory MSRP prices.

You're comparing a current (lower than MSRP) shelf price for the Mk 1 with the current (introductory--still at MSRP) price of the Mk II.

Doesn't matter. It's the price jump from today's mki lens to tomorrow's mkii lens that counts. Who gives a rat's ass what the lens MSRP price was back in 1975.

bjyoder wrote in post #14288642
The other part of that argument does go along the lines of, if they are making zoom lenses that "compete" with primes, there is a heck of a lot more engineering that goes into the design.

Zoom lenses are inherently compromises. With a prime lens, you make the glass for one very specific focal length, so you can shape the glass as needed to perform to exacting specifications at that focal length. With zooms, however, those elements in the lens have to be able to correct the light path at a range of focal lengths, which all need different sorts of correction to the light path.

So, if Canon has made all the right compromises, to the point where the lens is being talked about as a prime lens replacement, that's impressive.

Maybe I should have expanded my argument the first time around, but I was apparently initially under the impression that everyone would be able to read my mind via text on the interwebs..!

But they aren't just doing it with the zooms. Look at the HUGE price increase in the super-tele's and even the new 24/28 2.8 IS "primes".

Obviously, inflation is pretty-much unavoidable, but with many, many products...they become cheaper to make with new technologies and automation, etc.

Electronics are their own enigma though, as transistor prices have continually fallen over the last 20 or more years.. and will continue to.

I'd bet my lunch , that it doesn't cost them anymore to manufacture the new 300/400 2.8 II's now, then it did the Mk I's.

chantu wrote in post #14284651
Hmm, this table looks like some like some marketing folk would put up. Does anyone question these numbers? Case in point:

24-70mm (Mk I) 220,000 yen
24-70mm (Mk ii) 230,000 yen

Yet the U.S price difference is over $1000 USD. Can this be explained simply by inflation (which has been very low this past decade) or exchange rates? I don't think so ...

Is the 24-70mm (Mk II) overpriced? Yes!

I have noticed something which is not satisfactorily addressed via these discussions.
If we use the OP chart,

• take 2002 Japan price of 24-70mm f/2.8, it is 220000 Yen, and at the 2002 exchange rate that is US$1656.75. Yet 2002 press releases show the Canon USA MSRP of $2100.
  
• The 2012 Japan price of 24-70mm f/2.8 II lens is 230000 Yen, a 4.5% increase over 10 years, which at the 2012 exchange rate is US$1732.06.
  
• In Canon USA 2012 MSRP pricing, the 24-70mm f/2.8 is US$1399...it was launched in 2002 at $2100; B&H had it for sale in 2003 at $1349.
  
• In Canon USA 2012 MSRP pricing, the 24-70mm f/2.8 II is US$2299, 9.4% increase vs. Canon USA 2002 pricing of the 24-70mm f/2.8, but 64% higher than the 2012 Canon USA 24-70mm f/2.8 MSRP

1Tanker wrote in post #14288948
But they aren't just doing it with the zooms. Look at the HUGE price increase in the super-tele's and even the new 24/28 2.8 IS "primes".

Obviously, inflation is pretty-much unavoidable, but with many, many products...they become cheaper to make with new technologies and automation, etc.

Electronics are their own enigma though, as transistor prices have continually fallen over the last 20 or more years.. and will continue to.

I'd bet my lunch , that it doesn't cost them anymore to manufacture the new 300/400 2.8 II's now, then it did the Mk I's.

That most likely is the truth. Yes, they must recover some R&D costs, but not at a 44% premium. If people are OK paying these stupid prices...who am I to agrue...the Canon marketing machine is just so fine tuned.

Wilt wrote in post #14288949
I have noticed something which is not satisfactorily addressed via these discussions.
If we use the OP chart,

• take 2002 Japan price of 24-70mm f/2.8, it is 220000 Yen, and at the 2002 exchange rate that is US$1656.75. Yet 2002 press releases show the Canon USA MSRP of $2100.
  
• The 2012 Japan price of 24-70mm f/2.8 II lens is 230000 Yen, a 4.5% increase over 10 years, which at the 2012 exchange rate is US$1732.06.
  
• In Canon USA 2012 MSRP pricing, the 24-70mm f/2.8 is US$1399...it was launched in 2002 at $2100
  
• In Canon USA 2012 MSRP pricing, the 24-70mm f/2.8 II is US$2299, 9.4% increase vs. 2002 pricing of the 24-70mm f/2.8, but 64% higher than the current 24-70mm f/2.8 MSRP

What explains the massive difference between the Japan price and the US price when converted using the official exchange rate, vs. the real MSRP...26.8% higher in 2002, and 32.7% higher in 2012?!

I was wondering that too, but I wasn't studying what the OP was doing with his graph closely enough to actually see that. It would make more sense to use the exchange rate from when the lens was released.

Wilt wrote in post #14288949
What explains the massive difference between the Japan price and the US price when converted using the official exchange rate, vs. the real Canon USA MSRP...26.8% higher in 2002, and 32.7% higher in 2012?!

That's a great question actually, I don't have an answer for you.
What would stop someone from just buying the lens from Japan for a 30+% savings?
I'm sure we're ignoring a few taxes that are not present in the Japan MSRP.

Hogloff wrote in post #14288805
What...you are happy to open up your wallet and hand over more than $10,000 for a lens. Give me a break. Maybe we all should pass around a cup and dig deep into our pickets for the "Canon Fund".

The iPad has not change pricing in 3 generations, yet has increased both functionality and features with each generation.

Nobody is questioning the fact that the new lenses are disproportionately expensive compared to our income/quality_of_life "increases" over the last 20-30 years.

But, come on, the iPad example? Really? You compare a "commodity" product that sells 100,000,000 copies all over the world versus a $10,000 niche lens that sells a few thousand over its lifespan?

We also talked about Moore's law and how it doesn't apply to glass...

andrikos wrote in post #14291044
Nobody is questioning the fact that the new lenses are disproportionately expensive compared to our income/quality_of_life "increases" over the last 20-30 years.

But, come on, the iPad example? Really? You compare a "commodity" product that sells 100,000,000 copies all over the world versus a $10,000 niche lens that sells a few thousand over its lifespan?

We also talked about Moore's law and how it doesn't apply to glass...

It very much does apply to manufacturing though, and all modern lenses use transistors, are designed with CAD programs, and assembly lines are computerized. The glass itself may be somewhat free of Moore's Law, but the remainder of the R&D, prototypes, and much of the manufacture isn't.

About the only thing unaffected by Moore's Law (other than the glass blanks/cutting/polishi​ng/coatings), is all the Big-Wigs' Salaries....which continue to escalate ad nauseum!