Stefan Daniel Interview Offers Clues

In a new THEME interview with Stefan Daniel - he offers some tantalizing clues on the future direction of Leica, the "M10" and more. Some highlights from the article:

  • Likely future product in the 2,000-6,000 Euro range to fill gap
  • The M9 has been selling beyond expectations, 80 made per day
  • At least two new products (full frame?) under development
  • Manual focus in M system to stay for foreseeable future
  • CMOS highly likely with M10; live view, better battery life - video?
  • M7/MP Still in production and will continue as long as demand is there
  • New lenses will continue forward-thinking design and technology
  • Lens production increased from 1,000 to 3,000 lenses per month

Stefan Daniel, director product management, Leica Camera, sat down with THEME to talk about Leica of the past, present and future. You’ll understand that Mr. Daniel can’t give specific answers to the questions we all want to be answered, “What about the M10,” “Leica’s rumored compact system camera,” and so forth. Expecting an M10 at Photokina 2012? Who knows.

The interview tells you this: Leica will not become a mass producer of photo gear to appeal to a much broader market. They simply don’t have the capacities. That doesn’t mean Leica doesn’t have a few surprises up the sleeve. For instance, what does Leica have to say about CMOS? The next digital M will most certainly have live view. And manual focus lenses only for the M system? “It may change in the future.” Photokina? Expect two products in the €2,000 to €6,000 range to fill the gap…

Thank you for taking the time to talk to THEME Mr. Daniel. Say, what camera are you shooting with at the moment?

On recent holidays I took along my M9 and I also had the chance to take an M Monochrom.

Well I have to ask, what do you like about these cameras.

They don’t dominate you as a photographer and they just do what you want a camera to do.

The M Monochrom is the black-and-white only camera Leica recently announced. How is it received by the market?

So far very good, our order books are nicely filled. On the other hand, as an experience from the first days, you have to try this camera, you have to see the pictures and then in most of the cases people are totally convinced by the product and its results.

What makes this camera a camera that convinces?

It’s of course the quality in terms of resolution of the files and the high ISO capability of that camera. The files look very very clean, very natural. Everybody says it’s not at all comparable to a picture that has been converted from a color picture. There is a really visible improvement over a color camera.

If I order an M Monochrom, how long do I have to wait?

I would say something like three to four months. Our order books are filled, production is running in parallel to the normal M9. There are some waiting lists of course.

Since late last year Leica has a new strategic investor, private equity firm Blackstone. The deal aims to help fund the international expansion of Leica. So far Blackstone doesn’t seem to have much influence on Leica’s product line. Or does it?

First of all, this investor holds a minor share. The main shareholder is still ACM Projektentwicklung with Dr. Kaufmann. So far I cannot see a strategic influence by Blackstone.

But how specifically could Blackstone shape the future of Leica and its products.

Blackstone could help us to become even more international, to open some doors, especially in Asia, to improve distribution over there.

Leica’s corporate culture is a strange blend of conservatism and innovation. Is this preventing Leica from playing a more prominent role in the global market? Or is this very tradition key to Leica’s identity and successes?

Of course, Leica is somehow unique, it’s absolutely unique in the photo market, and Leica has to have a different profile from our competitors, otherwise Leica with the company’s size it has and with the place where Leica is located, we are the last camera manufacturer with a complete development in Europe, Leica needs to have a different profile. Leica has a very strong heritage which we think is a very positive thing to build on. We always look back in the history, take all the good things from history and try to apply it to contemporary projects. Leica also had to find its place inside the digital world which took a little while, but I think Leica has now found its place. At least Leica’s success shows it wasn’t that wrong.

In 2011 Leica CEO Alfred Schopf revealed plans to announce a compact system camera at Photokina 2012 in a bid to compete with the likes of Panasonic, Sony, Samsung and Olympus. He told a journalist, “We are looking into that… it’s more than an idea… You will see something at the next Photokina.” Then came the announcement of the M Monochrom and absolutely no talk of a possible compact system camera. What’s going on?

We know that Leica has a lot of room to cover additional market fields. If you look at our current portfolio we have the X2, andthen we have the M9 and the M9-P. Price-wise there is a huge gap from €2,000 to €6,000. With the economic growth of Leica we are also aiming to fill these gaps with additional products. On the other hand I cannot make any statement about future products right now because it would be much too early. But it is our aim, our goal to have additional products and to extend our portfolio.

Photokina is around the corner and Leica booked the entire Hall 1 of the Cologne exhibition center. You have to fill that hall with something!

(Laughing) Yes we do and we have concrete plans how to do it. One important thing is two years ago at Photokina there was in that hall the so-called visual gallery which was a photo exhibition organized by the Köln Messe. They are not willing to go along with the project any further. It was very clear to not to have pictures at Photokina would be a pity, such as art photography and high-class photojournalism. Leica took over this responsibility. A good part of this very big hall will be pictures, not only pictures done with Leica cameras but showing the world of photography in the past, in the present, and maybe also a little bit in the future. Our cooperation with Magnum will help us there. So it’s not only products in that large hall, it’s also a lot about the art of photography.

So you agree Leica will have to broaden it’s portfolio. Therefore you also have to agree that Leica may become the victim of its own success. Look at Fujifilm’s X series. Fujifilm is seriously eating into Leica’s base with their so-called “poor man’s Leicas.” How is Leica dealing with this competition?

If you become successful you will get that kind of competitors, so that is something one will always have to deal with. But we know from the past, whether it was the Contax G system of the Epson RD-1 a couple of years ago, this kind of competition might look frightening at the beginning, but it enhances our own business because it brings new attention to that product field, so in the end we don’t see it as a big threat to Leica, but we see it as an accelerator for our own business. And also it will give some nice pressure to our development to not lay back. stefan daniel leica director product managemtent 3 Interview With Stefan Daniel, Leica Director Product Management: “Next Target Non Leica Users”

That would imply to go more mainstream. But even with fresh capital from investor Blackstone you will first and foremost remain a maker of pricey, let me call them “boutique cameras,” just to mention the Hermes edition. One could get the impression Leica is releasing fashion items.

Of course the pricey market, that’s where we belong, that’s our place in the market, so we remain dedicated to first-class quality, to the best quality, and this for this we naturally ask for a high price. We will not become a mass merchandiser or a mass market photo supplier.

But as said Fujifilm and the likes are taking market share away from Leica. Is Leica still attracting new customers? Or are mainly people buying Leica who already own Leica and will always buy Leica?

I can tell you a little bit about the experience with our Leica M9. The camera exceeded by far all our expectations regarding the quantities we could sell. What happened is that especially in the second and now third year of the product most of the buyers are first-time buyers who never had a Leica before. This camera just presents an addition to what is existing in the market, the smallest full-frame digital system camera. Therefore it’s appealing to non-Leica users. That’s what we’re targeting with our next two, with other products.

I understand that you can’t reveal any details about these two products, but what does an M10 might have to have to attract even more buyers?

We have done intensive research about what people like about the M9 and the M8, and what they rather dislike. We know exactly where are the weak points, for example battery life and processing speed. For the next generation we try to strengthen those weak points.

But you’re not aiming for a much larger market share by releasing less expensive products.

This would put Leica in a difficult situation because our production capacities the way we produce cameras and lenses right now is more than full. Then we would need to move to some outside supplier, probably in Asia somewhere, this would somehow regarded as not a real Leica product, and Made in Germany is a very essential purchase criteria, especially for people in Asia. So we’re not becoming a mass producer.

But you’re moving to new state-of-the-art facilities in Wetzlar. Does this improve production?

Of course we are limited here at our old facilities in Solms in space. Also the factory we’re in since now about 25 years was never meant to be a factory for optical and mechanical high-class products. So we have to fight every day with some negative circumstances in that factory. In the new factory we’ll have much better circumstances in terms of light, in terms of cleanliness of the rooms. Also the workflow can be much improved in the new factory. Everybody is really looking forward to move to the new factory.

It’s encouraging to hear that the dust problem is probably gone once and forever…

That is one of the things, dust we have to fight every day. We are sure we can improve it a lot once we have the new building.

Can you expand capacity in Wetzlar?

First of all the space is bigger, and in the case that Leica would still grow significantly there is enough land still free where we could extend our factory.

The demise of Kodak is certainly affecting Leica as well. Might this mark the end of Leica CCD sensors and the beginning of the CMOS era?

Luckily we are not affected by the bankruptcy of Kodak because the sensor business was sold before Kodak got in trouble. CCD is a nice technology, it gives you really wonderful performance, but in order to realize some very interesting and more and more mandatory becoming functions such as live view you need CMOS. There is no way around it. We have taken measures to face that. Video, live view, power consumption and a lot of similar things speak for CMOS.

Allow me to ask the obvious: Why is Leica sticking to manual focus lenses.

We are not only having manual focus, we have the Leica S2 system with autofocus. On the other hand on the M system we’re sticking to manual focus. There is a simple reason. A lot of the charm of the product and of the success of the product comes from the fact that the lenses are ultra small. By adding autofocus, motors and gears and electronics inside the lenses these lenses would either become much slower in speed, or it would become much bigger. There’s a good reason to stay in manual focus because it keeps the whole system as compact as possible. And having full-frame, by the way. Everybody could reduce the size of the lenses by reducing the size of the sensor. The trick is to have a very big sensor and small lenses. And this is only possible right now by having manual focus. That’s the current situation. It may change in the future.

First of all, we’re still producing M7 and MP cameras. We’re producing them because there is a demand for it — small, but quite stable. As long as this demand exists we will also be making these cameras. Technically speaking, from a quality point of view, there is no real reason to stick with film. Especially if you take an M Monochrom which is producing beautiful black-and-white pictures, one of the last domains of film, black-and-white film. There is not really a technical reason to shoot film. But an M Monochrom doesn’t smell film and doesn’t give you the limitation of having only 36 frames in your camera. There are still some emotional reasons why to use film. The people using it right now are doing it for that exact reason. They don’t do it by hazard, but on purpose.

So also resolution-wise there’s absolutely no point to cling to film.

I would say so. You can compare it to Technical Pan film or something like that in terms of resolution, but you can’t have this film with ISO 2,500, that’s not possible. Technically speaking there is no reason why you should shoot with film. Especially when you take our M Monochrom print service into account that we will offer for our M Monochrom customers. We do silver halide baryte papers, so the result is not an inkjet paper but a real photo developed in wet chemistry.

That leads to the next question. With the M Monochrom Leica announced the hyper-expensive new 50mm Summicron. Best, sharpest lens ever, says Leica. But would Leica consider remaking some of the older lenses as they were made back then? The concentrating on sharpness above all else is not necessarily a good thing in the eyes of many photographers.

That’s right. We see that older lenses — there are some famous designs — are quite popular amongst some users. But on the other hand there are millions of old lenses in the market and Leica is not planning to rebuild old designs. In our point of view it would lead backwards by just copying what we did in the past. That’s not our focus.

To give us an idea how difficult it is to produce these kind of lenses, how long does it take to make such a lens and how many does Leica produce each month.

We have extended our lens production capacity from under 1,000 lenses a month to now over 3,000 lenses a month. That was a huge step forward already, it took us a lot of effort to come to that. Here in the factory in Solms we have 200 people working in that area. I Portugal where we do some preproduction for lenses we have another factory.

And how many M9s you produce each month?

Our current capacity is about 80 cameras per day.

Thank you very much for your time, Mr. Daniel.