Seems that Leica and Franke & Heidecke are doing what many Swiss watch companies did many years ago. Obviously there are technically better or more accurate modern devices, but there will remain people interested in mechanical precision and fine manufacturing.
If either company tried to take on Sony, Matsushita, Nikon, Samsung, or Canon, I think they would be doomed to failure from the start. To be a market success, one can find a niche and carefully exploit it. Check out the new advertising campaign for Leica; it is not about the cameras, it is about how a person would use these cameras.
When you tie a product into a lifestyle or niche choice, then it just needs to attract the right customers. I agree that on the surface it looks like poorly thought out or stupid marketing and product development, wasted resources, etc. However, if you look at these products from these two companies as a limited or controlled volume niche product, they might appear to be well done marketing and development, though time and their limited sales will tell if that works.
These things show the value of design and branding. They are beyond products that are simply a means to an end. Just like bottled water and Swiss watches, the value is in the design and brand awareness.
Ciao!
Gordon Moat
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