Little Guys vs. Big Networks Purchases

[Gary_McClurg]

I heard that there were 200,000 DVX's sold. Not sure if that's just for the US market or worldwide.

My question is what do you think the profit margin on those camera are?

For example 200,000 cameras x $1,000 profit =$200,000,000 if my calculator is correct.

Minus R&D let's say for example $20,000,000 which still boils down to a nice $180,000,000.

Now if they only get $500 per camera that's still $80,000,000. And if they came out with other goodies, I guess what I'm trying to say is that us little guys are a pretty big makert that I feel they're not really reaching.

[J_Barnes]

I doubt it was anywhere close to $1000 profit for any one company. Even if there is enough profit to offer a clear $1,000 return, there are too many hands along the way that get to take a cut.

I have no idea what their profit margin is and I have no idea how many units were actually sold, but for the purposes of speculation...

Lets say they’ve sold 150,000 units worldwide at an average retail price of $3,450.

That would amount to $517,500,000 in worldwide sales, not profit obviously. Now, lets say that 1% of the cameras were damaged, defective, or required warranty repairs high enough to negate the profit on the camera.

Total sales are down to $512,325,000.

Lets say, as a total guess that the cameras cost $2,000 to manufacturer, box and ship to retailers for each unit. That brings available profit down to $215,325,000 to date. Now we can deal with retailers. Lets say they take a markup of about 15% leaving Panasonic with a retailer cost of about 2900?

Minus the 2000 it cost to produce, that leaves about 900 on each unit. Now you’ve got the licensed technology used in the camera…the Leica lens, the faroudja patented technology, and whatever else they’ve used inside the camera…maybe Panasonic’s take is about 700 on each camera.

That would bring a worldwide profit of $105,000,000. But that’s to date, and doesn’t include R&D, marketing and advertising.

If they spent 25 million on R&D and 6 million annually on marketing, that brings their yearly profit margin down to 34 million a year.

Obviously this is all completely uneducated guessing, but I’d expect that the cameras actually cost a good bit to produce. I heard someone say once that they make far more profit off of the consumer grade electronics, and on the high-end stuff they often get less then 10% return.

Who knows. I’d expect that we’re not as profitable as a lot of people like to think, not to mention that we don’t exactly know what the largest purchasing market is in relation to sales of DVX’s.

[Bill__Turner]

It is fun to speculate, but I heard from pretty reliable sources that the number is more like Panasonic has shipped (from the factory) 60,000 units world-wide to date. Still a lot of cameras.

Maybe someone from Panasonic would officially confirm something, but I wouldn't be suprised if they don't give out this sort of info. My info did come from Panasonic personel--- which doesn't mean it is absolutely correct, but based info I have seen about the numbers of cameras of other brands sold it does seem reasonable.

Bill Turner
Century Division, Schneider Optics

[XCheck]

I recall someone telling me that a few features were left out so that Panasonic could get into their price limit ($5000 CDN) - things like true manual focus, zebra pattern that would go down do 70% (useful for proper exposure of skin).

While this doesn't necessarily say anything specific, it at least indicates that their profit margin is not too large (otherwise they might have been able to include those features).

I think this is not a 'mass market' technology where you could make big bucks with small profit margins, so I think that $200,000,000 is WAY out from the actual number. I think $10mil/year is probably closer to the truth than $100mil/year.

Jerry