Explaining the pricing mystery
Posted by aogSunday, 01 August 2004 at 10:30 TrackBack Ping URL

Instapundit is confused about the pricing of the Nikon CoolPix 8700 (point & shoot 8 megapixel camera) vs. the D70 (6 megapixel digital SLR camera). The D70 kit is still $1300 while the 8700 has dropped from $1000 to $800. As someone who looked at both of these and bought the D70, I thought I’d comment.

One thing Instapundit misses is that the $1300 is for the D70 kit, which includes a lens. You can get the D70 itself for $1000. What use is a camera without a lens? Well, the D70 can use almost all existing Nikon lenses so if you already own a Nikon SLR you have no need of a lens. That opens up the D70 to an entire market which has the choice of of paying $1000 for either an 8700 with its own, non-removable lens or a D70 which can use all of the customer’s existing lenses (and these people tend to have a lot of such lenses). Better yet, the kit lens is going for ~$350 on EBay (search on “18-70 lens”) so you can get the body for effectively less than the 8700 if you don’t need the kit lens.

I would think that in general, people paying over $1000 for a digital camera tend to be a little more serious and if it’s only a few hundred more to move up to a full digital SLR it’s well worth it. Longer ago you could sell point & shoot digital cameras for close to $1000 because a digital SLR was up in the $5000 range. It reminds me of color vs. black & white (either TVs or computer monitors). If color is 5 times more, people will by B&W. If color is only 50% more (or less) B&W will disappear from the market. The emergence of $1500 digital SLRs will be a strong cap on what you can charge for point&shoot cameras. Of course, some people will still buy them because the additional capabilities of the dSLR is paid for with additional costs. These include buying lenses, some of which can cost more than the camera body, and learning how to use the camera (“point&shoot” is called that for a reason). But it will hard to maintain a price point for a point&shoot very close to the dSLR price point, which is likely the reason for the drop in the 8700 price.