What's the Right Price?

Don't get me wrong. I believe that businesses need adequate product margin to survive. Get too aggressive on price and you disrupt your ability to invest in significant development for future generations of product. Plus, there's the old ROI thing: low return on investment is problematic because that means the capital is best put to other uses, and both companies and investors will eventually demand that.

With that in mind, what's the right price for a good mirrorless camera? 

I don't ask that out of the blue. My previous story was about Canon possibly having a strategy of large-sensor compacts that overlap with low-end DSLRs, mostly removing the need for mirrorless systems in their lineup. It's certainly a potential strategy, as DSLRs can get smaller than they currently are without compromising them or even changing sensor format (e.g. even the smallest DSLR is still bigger than it needs to be).

Most of the new higher-end mirrorless cameras are more expensive than low-end DSLRs. For example, the 16mp mirrorless Olympus OM-D is US$1100 with a kit lens, while the 24mp DSLR Nikon D3200 is US$700. While the D3200 is bigger, it's not that much bigger, and it has implied performance benefits. So what makes the OM-D worth an extra US$400? 

Heck, for US$200 more than you'd pay for an OM-D you could get the high-end Nikon D7000 DSLR. This makes things even a bit more stark: for less than a 20% difference in price you can opt for size (OM-D) over performance (D7000) or vice versa. Olympus is basically saying that size/weight and performance are valued almost equally by users. [Before the flames begin: I'm not saying that the OM-D doesn't perform well. Moreover, "performance" isn't just about a metric like dynamic range, but includes such things as ability to follow focus.]

Olympus isn't the only one playing this game. A 20mp mirrorless Samsung NX-20 is also US$1100. A 24mp mirrorless Sony NEX-7 is US$1400. A 16mp mirrorless Fujifilm X-Pro1 is US$1700 just for the body. Someone thinks you have lots of disposable income. 

But let's flip to the other side of the pricing game. The Olympus E-PM1 is going for US$400 with kit lens these days, and we've seen previous generation Olympus Pens for as little as US$200 (the very competent E-PL1 is currently still on sale for US$300 with lens). Is there really a US$700 difference in a E-PM1 and OM-D? Maybe. Compare that to the US$600 difference between a Nikon D3200 and D7000. Still, one thing that's coming in my reviews is a bit more evaluation regarding value

The NEX-7 was the first camera I've been reviewing where I've had to seriously grapple with this. A NEX-5n body—which I really like—is US$550 at the moment, while the NEX-7 body is US$1200. Yes, the integrated EVF and two added dials are very nice on the NEX-7. But the real issue devolves to the sensor and lenses. Frankly, the 16mp sensor on the NEX-5n performs quite well with the current NEX lens set, but the 24mp NEX-7 really isn't delivering much visible difference, if any. I can add the same EVF to the NEX-5n (albeit as an external accessory) for US$350, so the two dials and the built-in accessories of the NEX-7 are costing me US$300 if I'm not seeing anything other than marginal performance benefits. This gets us right to statements of value.

It's nice that we live in a world with so many choices. Indeed, an incredible array of choices because mirrorless cameras haven't yet devolved into the same nearly-interchangeable cousins that DSLRs have (e.g. a low-end Nikon DSLR isn't that much different than a low-end Canon DSLR which isn't much different than a low-end Pentax DSLR). 

But I have to wonder whether the mirrorless camera companies are all making a bit of a mistake. The high initial prices are simply extending the life span of low-end DSLRs. Almost any competent sales person can move most people from a US$1000 mirrorless purchase to a US$600-700 DSLR purchase. Plus so far all the mirrorless camera companies are ending up with previous generation cameras in significant inventory that they then have to deeply discount to move, creating a huge range of mirrorless camera price (US$300 to US$1100 in the Olympus line). That's been true of Panasonic, Olympus, Sony, and Samsung, and will be true of Nikon once they have new Nikon 1 models to sell.

Right now the best values in mirrorless are those older generation cameras. An E-PL1 for US$300 is a no-brainer: it's a better compact camera than any compact camera anywhere close to that price. I'm not yet convinced of the value of the >US$1000 mirrorless bodies, though. That's one of the reasons why you haven't seen my finished reviews on a couple of products yet: I'm still trying to come to grips with a user's personal ROI as opposed to the camera company's. Don't underestimate that. We live in a world of incredible choices at the moment. 

The tricky part is making the right choice for the right reasons. I've seen a few too many people recently end up in one of these u-turns: (1) they buy into a smaller mirrorless system only to find that some performance capabilities don't live up to their expectations (typically focus), so they bounce back to DSLRs; or (2) they buy into a DSLR system and then wonder if they've done the right thing when they hang the thing around their neck all day and discover just how big, heavy, and awkward that is.

There's no simple answer to the question I pose. But I aspire to trying to give you my best take at cutting through the confusion and getting to some core considerations you need to make. More reviews are coming just as soon as I think through how I'm going to approach that topic.

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