Hi there,
I often read stuff like "the HVX won't be as good as a $100,000.- cam" ... "you get what you pay for" etc.
This might be true.
Or not.
In the special case of the HVX I dunno.
But generally spoken, this does not have to be true at all.
Here's what I think:
a) Panasonic tries to establish the P2 System on "the market". Let's leave out, which market. Consumer, Prosumer, etc. doesn't really matter since we can be sure, Pana will take what it can get. They probably know, how hard it can be to push some new technology into a market like this. Forget about facts on stuff like this, we've seen evolutions and revolutions in the past that provided much better technology but for some reason simply didn't get their buyers and therefore died. So, if Pana says: We want to establish P2 in an agressive way, they COULD (I'm not saying this is the fact with the HVX) say: let's build a cam that we would usually sell for $25,000 and sell it for the price that just brings the expenses back in. Or even: "let's sell it for a price that is so low, that we'll make $ 500 loss on each cam we sell." This is simply called investment. Pushing a new technology into the market will cost you money. period.
b) Think of quantities. How many $100,000.- cams get sold during one year? Let's assume worldwide: 200.
Let's assume the production of a baby like that (lot's of handwork here probably because of quantities again) costs you $10,000.- and you sell that sucker to your dealers for $60,000.-
You get $50,000.- for each cam and sell 200 a year that makes $10,000,000
Now you build a cam that sells for $6,000. How many worldwide in a year? I'd say easily 3,000. the production cost will much likely be pretty low since you'll be making a lot of these and therefore can buy some machines and have very little handwork. Assuming production costs of $1000 a piece. Now you give it to your dealers for $4,000. So you'll be making $3,000 a piece with 3,000 units makes $9,000,000.
See how close a $6,000 cam can get to a $100,000 cam in the eyes of the manufacturer?
Of course all these numbers are wild guesses and probably way off, but you get my point - I hope.
What's the rub on this? Well, of course in the figure above you have to see one point: If you sell a cam for $6,000 that is almost as good as the one for $100,000, you will probably sell less of the expensive babies. So your 200 units would go down to let's say 50, giving you a $7,500,000 loss in the example above.
As you see, calculations like that are quite complicated. You can't just say "okay, it costs me $x to produce, so I will sell it for $y" but you have to look at your other products, the products and prices of other manufacturers, the actual demand on the market, etc. etc. etc.
This is called business and managers get loads of money for making the right decissions on this kind of stuff.
So in my eyes the people who say "there's no way a $6,000 cam like the HVX will even come close to the $xxx,000 blabla cam" do not really know a lot about business. It might be what they experienced in the past, but sometimes things change.
Think of cars until Mr. Ford started to build the T-Model on the assembly line.
If you would've told a person in 1910 "soon, an average man can have his own car" he probably would've said "there's no way an automobile will cost that little money".
So yes, there always is "a way".
It's simply the question of: "will somebody walk it?"
The HVX might turn out as a $6,000 cam that is worth $6,000.
But there is - generally spoken - the possiblity that it turns out as a $6,000 cam that is worth $60,000.
Again: I'm not trying to fortune-tell about the HVX in any way, all I'm saying is that things are sometimes much more complex than a simple "you get what you pay for" these days.
Sorry for the bad English, I'm no native speaker.
regards,
Oli
I often read stuff like "the HVX won't be as good as a $100,000.- cam" ... "you get what you pay for" etc.
This might be true.
Or not.
In the special case of the HVX I dunno.
But generally spoken, this does not have to be true at all.
Here's what I think:
a) Panasonic tries to establish the P2 System on "the market". Let's leave out, which market. Consumer, Prosumer, etc. doesn't really matter since we can be sure, Pana will take what it can get. They probably know, how hard it can be to push some new technology into a market like this. Forget about facts on stuff like this, we've seen evolutions and revolutions in the past that provided much better technology but for some reason simply didn't get their buyers and therefore died. So, if Pana says: We want to establish P2 in an agressive way, they COULD (I'm not saying this is the fact with the HVX) say: let's build a cam that we would usually sell for $25,000 and sell it for the price that just brings the expenses back in. Or even: "let's sell it for a price that is so low, that we'll make $ 500 loss on each cam we sell." This is simply called investment. Pushing a new technology into the market will cost you money. period.
b) Think of quantities. How many $100,000.- cams get sold during one year? Let's assume worldwide: 200.
Let's assume the production of a baby like that (lot's of handwork here probably because of quantities again) costs you $10,000.- and you sell that sucker to your dealers for $60,000.-
You get $50,000.- for each cam and sell 200 a year that makes $10,000,000
Now you build a cam that sells for $6,000. How many worldwide in a year? I'd say easily 3,000. the production cost will much likely be pretty low since you'll be making a lot of these and therefore can buy some machines and have very little handwork. Assuming production costs of $1000 a piece. Now you give it to your dealers for $4,000. So you'll be making $3,000 a piece with 3,000 units makes $9,000,000.
See how close a $6,000 cam can get to a $100,000 cam in the eyes of the manufacturer?
Of course all these numbers are wild guesses and probably way off, but you get my point - I hope.
What's the rub on this? Well, of course in the figure above you have to see one point: If you sell a cam for $6,000 that is almost as good as the one for $100,000, you will probably sell less of the expensive babies. So your 200 units would go down to let's say 50, giving you a $7,500,000 loss in the example above.
As you see, calculations like that are quite complicated. You can't just say "okay, it costs me $x to produce, so I will sell it for $y" but you have to look at your other products, the products and prices of other manufacturers, the actual demand on the market, etc. etc. etc.
This is called business and managers get loads of money for making the right decissions on this kind of stuff.
So in my eyes the people who say "there's no way a $6,000 cam like the HVX will even come close to the $xxx,000 blabla cam" do not really know a lot about business. It might be what they experienced in the past, but sometimes things change.
Think of cars until Mr. Ford started to build the T-Model on the assembly line.
If you would've told a person in 1910 "soon, an average man can have his own car" he probably would've said "there's no way an automobile will cost that little money".
So yes, there always is "a way".
It's simply the question of: "will somebody walk it?"
The HVX might turn out as a $6,000 cam that is worth $6,000.
But there is - generally spoken - the possiblity that it turns out as a $6,000 cam that is worth $60,000.
Again: I'm not trying to fortune-tell about the HVX in any way, all I'm saying is that things are sometimes much more complex than a simple "you get what you pay for" these days.
Sorry for the bad English, I'm no native speaker.
regards,
Oli