Leica: The Little Privately-Owned Engine That Could

The camera maker we know as Leica, officially known as Leica Camera AG, is now 100% privately owned. The main shareholder, Lisa Germany Holding GmbH, announced earlier this week that it had successfully bought out the 2.44% of stock still in the hands of third-party shareholders, paying a set price of €30.18 (~$39) for each of the shares.

The stock will also be removed from the Frankfurt Stock Exchange as a part of this plan, a move designed to save the company time and money — the management will no longer need to worry about all the hassle that comes with being a publicly traded company.

We got a chance to chat with a department head at the company during Photokina 2012 last month. Here are some of the interesting things we gleaned from the conversation:

First off, Leica is doing well financially; the digital age has treated it well. After years of bleeding money in the 2000s, the company is now profitable. Its books have been in the black for two straight years now.

Sales of the company’s cameras have been strong, particularly in the M-series lineup, where much of the money is made.

For those of you who bemoan the fact that Leica charges so much for its M-series cameras and has committed to doing so for all eternity, just know that it’s for good reason. The prices are what they are simply because Leica spares no expense when it comes to materials and manufacturing. To lower the prices would be to lower the quality of the cameras — something that Leica has no plans of doing.

The company’s margins are actually absurdly low compared to certain other major players in the electronics industry. According to the department head, for a $8,000 camera, less than 30% of that figure is profit; the rest is cost.

Compare that to Apple’s new iPhone 5. Analysts have concluded that the phone costs Apple between $200 and $230 to manufacture. The company then turns around and sells the devices for between $650 to $850 (customers can pay less due to carriers chipping in with subsidies). We’re talking about ridiculous profit margins, which is why Apple is now the most valuable company that has ever existed.

If Leica tried to mimic Apple’s profit margins, M-series cameras would be priced like mid-level family sedans.

This latest move to become a 100% privately owned also reflects the cultural mindset of the company. Leica wants to do its thing — creating the highest quality cameras and an iconic brand — without having to worry about anyone or anything else.

When we asked about competitors, namely Fujifilm and its X-Series lineup, the response was simple: “We don’t care.”

Leica doesn’t care what its competitors are doing, because the company’s roadmap isn’t drawn on the competitive landscape. Even if Fujifilm ends up dominating the consumer market for relatively low-priced, full-frame, rangefinder-esque cameras, Leica won’t even bat an eyelash. It’ll happily continue making high-end gear carrying high-end price tags… because that’s the company’s DNA.

This can also be seen in the company’s marketing strategy. Look around on the web; you won’t find a single banner advertisement for a Leica camera. It’s just like what Edwin Land said about his strategy with Polaroid decades ago: “marketing is what you do if your product is no good.”

Instead of banner ads, Leica chooses to do things like partner with renowned photographers — Magnum photographers for example. The company teams up with the prestigious cooperative by providing its photographers with cameras and funding 5 photographic projects per year.

Magnum members can pitch their ideas, and if Leica thinks the images are worth making, it’ll cut the photographers checks to bring the photos into existence.

Despite what the brand’s wide recognition suggests, Leica is actually a pretty small company. Canon has hundreds of thousands of employees around the world. Leica has less than a thousand at its headquarters in Solms, Germany, and just hundreds more internationally. The vast majority of the employees at HQ work in production. The marketing team? 10 people.

Leica cameras are often praised for their design: classic, simple, clean, compact. The same can be said of the surprisingly small company behind them: this international brand is built upon its simple vision of quality.

Image credits: Leica M3 by Thomas ♫, LEICA M5 by Shades Of Laks, Leica M7 Camera at Wonderland by Mr. T in DC, Leica M4-P by Sockeyed, t r i s i by limawhisky

  • peter p

    LEICA rules!!!
    german engineering put armstrong on the moon……

  • Alexander Petricca

    A very well written article, great job guys! I love Leica’s approach to their company and their products are absolutely beautiful.

  • 11

    I totally admire the vision part. However, what they are making is not just a camera but a beautiful ‘object’… perhaps a good photographer needs a good camera and not necessarily a good object. They could perhaps put more effort towards the sensor instead of the housing.

  • Urs

    i bought a olympus E-PL1 new for 550 euro.
    14 month later the camera was not worth more then 250 euro.
    what i like about LEICA is that it has a real value.
    it´s not just a throw away camera like so many cheap china build crap.
    nevertheless i would like their cameras to be 25% cheaper. :)

  • jaman

    Leica do advertise! Go and pick up a real photo magazine, geared toward photographers (not the general public and enthusiasts) and you’ll see their adds!

  • Jana

    and leica has no ugly “un-instacreativity” filters.

  • Rob

    You’ll see adverts for Leica dealers, not Leica themselves

  • Joey Duncan

    ads, not adds, they aren’t adding things.

    Also, the article doesn’t say they don’t advertise, they said you won’t see it online.

  • Joey Duncan

    From a business perspective I’m glad they are going from publicly traded to private. Traded companies is horrible for companies like this, it’s fine for companies like Apple but can’t work for people like this. They’d never get things the way they want, and at the end of the day they would have no money.

    I don’t care about the cost, they seem to be an honest company, so they deserve to sell at the price they are.

  • Chaz Smith

    the new M-E. done

  • derekdj

    Brilliant move, Leica has done some really smart strategic business moves to get themselves not only in the black but into the digital age like partnering up with Panasonic and Kodak (for their sensor work). Without the burden of shareholders, they’re free to move as they wish, but they also assume all of the financial burdens/limitations of a private company.

  • Pixmation

    The only thing I don’t care about Leica is their limited designer editions catering to collectors instead of photographers.

  • guest

    if they spare no expense then why does the screen on the M9 suck so much ass?

  • John Kantor

    Leica – the camera for people wanting to be seen carrying a Leica.

    “If Leica tried to mimic Apple’s profit margins, M-series cameras would be priced like mid-level family sedans.” You mean like a Hasselblad?

  • IpooFreely

    Leica isn’t worth the money in a side by side comparison cameras half the price out perform. It’s all just a big advertising ploy and I don’t believe the Leica doesn’t care what Fujifilm is doing because they will once Leica no longer has any customers to purchase their over priced “classic” cameras.

  • Roy

    “It’s just like what Edwin Land said about his strategy with Polaroid decades ago: ‘marketing is what you do if your product is no good.'”

    Remarkable how countless numbers of wonderful photographs are made every single day with products that are “no good”.

  • Robert T Wilson

    Have you actually used a Leica ? I agree that on paper they pale in comparison to the other DSLRS , heck my Pentax K-X is supposedly * better* than my M8 , but once you use one or see the images it captures ( well, YOU capture as its manual) youll be smitten for life

    Its like when you meet that special someone for the first time, there may be more attractive options or ones with more money or stability but there is just something about that person that you like and enjoy being around , thats what using my M8 feels like

  • `/1nc3nt

    Which brand, Leica?

    I saw pictures Armstrong holding a Hasselblad and it’s swedish.

  • hugh crawford

    I think he’s talking about the design of the Saturn V rocket by Wernher von Braun and Arthur Rudolph

  • Derick Gamboa

    Simply the same thoughts I have when viewing and understanding stock market prices of some companies. Why go public and let others, whose core competency is different from yours dictate operational and commercial issues. Then again, at 2.44% shares not controlled, is just stranded equity and very negligible.

    When you have a good product and service, and have fairly excellent control in its heading, exclusivity is a market itself. Craftsmanship, excellent service and flexibility would ascertain fair returns to remain comfortable.


  • Mike Aubrey

    Well, in those 14 months, did you get a couple hundred euro worth of use out of it?

  • Trevor Ford

    Would love to be able to have a Leica and travel with it one day.

  • Joe Blow

    German engineering also gave us Zyklon B.