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Why stop at 500?


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#1 Mike Brennan

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Posted 01 October 2006 - 01:05 PM

Red website states that reservations will close in October.

I friend has reservation number near 480, which he acquired at IBC. So by end of October we can assume maybe 600 reservations. Lets say around 500 actually buy a camera.

Nice round number 500!
I'm wondering if their are legal/trade advantages in USA to resticting the number of cameras made to 500?
Is it more onerous for warrenty or duration of product support if they make more than 500?


They could come out with a new model for the next batch of 500.

Just wondering why someone would stop taking orders for a product, other than putting the price up after October.


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#2 Häakon

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Posted 01 October 2006 - 02:14 PM

Red website states that reservations will close in October.

I friend has reservation number near 480, which he acquired at IBC. So by end of October we can assume maybe 600 reservations. Lets say around 500 actually buy a camera.

Nice round number 500!
I'm wondering if their are legal/trade advantages in USA to resticting the number of cameras made to 500?
Is it more onerous for warrenty or duration of product support if they make more than 500?
They could come out with a new model for the next batch of 500.

Just wondering why someone would stop taking orders for a product, other than putting the price up after October.
Mike Brennan

Just FYI, they already have over 600 reservations. No building limits over 500 units. :)
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#3 Chris Kenny

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Posted 01 October 2006 - 02:26 PM

As far as I know RED hasn't said they'll stop at any specific round number. Jim Jannard's explanation for closing reservations:

We have all the info we need to make good production decisions. It is likely the program may change a bit and we want to lock down the reservation holder's program. We think that a bit of notice is only fair.


It sounds like the reservations existed mostly to gauge demand, and they think they've got a good handle on that now. That also looks like a hint that maybe prices will go up, or people who don't reserve won't get the display included in the $17.5K price, or something along those lines.
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#4 Mike Brennan

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Posted 01 October 2006 - 02:58 PM

As far as I know RED hasn't said they'll stop at any specific round number. Jim Jannard's explanation for closing reservations:
It sounds like the reservations existed mostly to gauge demand, and they think they've got a good handle on that now. That also looks like a hint that maybe prices will go up, or people who don't reserve won't get the display included in the $17.5K price, or something along those lines.


600 reservations may only mean 500 actual sales.

"Locking down the program" does not exclude the notions expressed in my post and does indeed indicate a resricted number of first run cameras.

I am wondering if there is a manufacturing/legal/warrenty/tax imperative to halting orders of the first model at a number or date. Need to get onto a manufacturing forum I guess :)


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#5 Chris Kenny

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Posted 01 October 2006 - 04:49 PM

600 reservations may only mean 500 actual sales.

"Locking down the program" does not exclude the notions expressed in my post and does indeed indicate a resricted number of first run cameras.

I am wondering if there is a manufacturing/legal/warrenty/tax imperative to halting orders of the first model at a number or date. Need to get onto a manufacturing forum I guess :)
Mike Brennan


Sure, 600 reservations might only mean 500 sales, but you'd be a little irresponsible if you took 600 reservations (and counting) when you only intended to make 500 cameras. I seriously doubt that the RED ONE model will only be sold to people who get reservations before Oct. 31. I suspect when RED talks about locking down the program, they mean the terms of the program, e.g. what package you get at what price.
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#6 Mr. Shannon W. Rawls

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Posted 01 October 2006 - 06:30 PM

Remember, a single reservation can hold up to 5 cameras.
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#7 Greg Lowry

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Posted 01 October 2006 - 07:25 PM

Remember, a single reservation can hold up to 5 cameras.


1 reservation = 1 camera is more likely.
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#8 Chris Keth

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Posted 01 October 2006 - 07:52 PM

1 reservation = 1 camera is more likely.


You don't think that at 17 grand and with the fuss RED is causing that rental houses won't be picking some up?
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#9 Greg Lowry

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Posted 01 October 2006 - 08:20 PM

You don't think that at 17 grand and with the fuss RED is causing that rental houses won't be picking some up?


Otto Nemenz has reserved 5, I believe. Probably others too.

My point is that when counting cameras, 1 reservation is most likely to be 1 camera. If RED says they have 600 reservations, that's 600 cameras, not 635. I'm sure Otto Nemenz would be very unhappy if he didn't get 5 RED "Rs" for his $5k.

Edited by Greg Lowry, 01 October 2006 - 08:25 PM.

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#10 Eric MacIver

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Posted 01 October 2006 - 08:29 PM

Yes, $1k = 1 Red One reservation. We have our 5 R's. :)
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#11 Mr. Shannon W. Rawls

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Posted 01 October 2006 - 08:45 PM

delete

Edited by Mr. Shannon W. Rawls, 01 October 2006 - 08:46 PM.

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#12 Mitch Gross

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Posted 01 October 2006 - 11:00 PM

Speaking from knowledge of other highly-touted and much-anticipated camera systems that had reservation deposit programs, I can tell you that 600 reservation may only translate into 50 actual sales. Remember the reservations are fully refundable no matter whether RED delivers or not. When someone's number comes up they may decide to back out. The harsh reality is that most do.
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#13 Greg Lowry

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Posted 01 October 2006 - 11:50 PM

Speaking from knowledge of other highly-touted and much-anticipated camera systems that had reservation deposit programs, I can tell you that 600 reservation may only translate into 50 actual sales. Remember the reservations are fully refundable no matter whether RED delivers or not. When someone's number comes up they may decide to back out. The harsh reality is that most do.


It'll be interesting to see RED's ratio of reservations to sales ... not that we'll ever know the precise numbers, but there will be anecdotal info.
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#14 Mark Allen

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Posted 02 October 2006 - 04:43 AM

Personally I suspect that 33 to 50 percent of the reservations will go through with their purchase.

I suspect the price will go up to $25k. Why do I think that? Honestly, just seems like if you decided to sell a camera for 25 and then were discounting it for early adopters, 17.5 would be the number you'd come up with. It's a 30% discount. 30% is a common discount level for "family and friend" deals. but if they did do this, I'm sure a lot of owners would be tempted to sell theirs for the quick profit. I'm probably wrong about all this, but felt compelled to share my theories anyway and I like that this thread has been all in a nice friendly tone.

BTW, Eric, welcome to the forums. If local to LA production people haven't checked out www.indierentals.com - you should, it's a good rental house. I found them to make the extra effort, much appreciated.
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#15 Mike Brennan

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Posted 02 October 2006 - 05:02 AM

Personally I suspect that 33 to 50 percent of the reservations will go through with their purchase.

I suspect the price will go up to $25k. Why do I think that? Honestly, just seems like if you decided to sell a camera for 25 and then were discounting it for early adopters, 17.5 would be the number you'd come up with. It's a 30% discount. 30% is a common discount level for "family and friend" deals. but if they did do this, I'm sure a lot of owners would be tempted to sell theirs for the quick profit. I'm probably wrong about all this, but felt compelled to share my theories anyway and I like that this thread has been all in a nice friendly tone.

BTW, Eric, welcome to the forums. If local to LA production people haven't checked out www.indierentals.com - you should, it's a good rental house. I found them to make the extra effort, much appreciated.


Gently steering the topic back to the thread....why stop ist batch at x number? tax/warrenty/legal/ ect?
or are they already gearing up for 2nd generation model



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#16 Graeme Nattress

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Posted 02 October 2006 - 12:03 PM

We'll make as many as we can sell. I don't think there's any legal reasons why we'd only make a small number. The reservation scheme was just accurately judge manfacturing volumes. Why are we stopping reservations? Because we have more than enough reservations to know we'll get the volume we need.
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#17 Chris Kenny

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Posted 02 October 2006 - 12:59 PM

Once again, we have no indication RED will stop the first batch at a hard number. All we know is that RED will stop taking reservations on Oct. 31. What happens after that is anyone's guess. Maybe RED will introduce a new pre-order program, with prices raised. Maybe yields on the sensor aren't that great, and RED will only be able to make 100 cameras a month off the bat, and they don't want a huge backlog. Maybe RED plans to start production runs of 5,000 units each in May, so reserving won't be necessary.

We've really got no idea, and it's unproductive to try to draw useful conclusions about RED's business model merely from the fact that the current reservation program will end this month.
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#18 Greg Lowry

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Posted 02 October 2006 - 01:37 PM

Once again, we have no indication RED will stop the first batch at a hard number. All we know is that RED will stop taking reservations on Oct. 31. What happens after that is anyone's guess. Maybe RED will introduce a new pre-order program, with prices raised. Maybe yields on the sensor aren't that great, and RED will only be able to make 100 cameras a month off the bat, and they don't want a huge backlog. Maybe RED plans to start production runs of 5,000 units each in May, so reserving won't be necessary.

We've really got no idea, and it's unproductive to try to draw useful conclusions about RED's business model merely from the fact that the current reservation program will end this month.


To which I would add: who cares? RED says they'll make as many cameras as they can sell.

Edited by Greg Lowry, 02 October 2006 - 01:38 PM.

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#19 Mike Brennan

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Posted 08 October 2006 - 05:02 AM

To which I would add: who cares? RED says they'll make as many cameras as they can sell.


I care.

Speaking from experience as an owner operator updating video cameras over the past 20 years, when I learn that a model will be discontinued or updated this affects the timing of the disposal of existing kit and purchase of next. Do you wait for the next model with improved features? Will my clients want the improved features? What will the new product do to value of existing kit?


The point is will the second production run (if I can call it that) will be better or different than the first.
For the majority of the industry who don't have a reservation this is an important consideration!


So knowing why they have capped production (if that is what they are doing) is an indicator if second generation improvements will come to light in a new model.

The question was aimed at anyone with experience making low ish volume production runs in the USA, in an effort to find out if there are legal/warrenty issues for a company building a new product to stop taking deposits at a particular date or to cap production at a particular number.




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#20 Gavin Greenwalt

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Posted 08 October 2006 - 05:45 PM

It's my understanding that they don't intend any notable changes to the hardware for at least a year. However, you can probably expect consistant firmware updates. It would seem like a bad business move to make only 500 units and then have to rebuild your manufacturing pipeline. If they could I'm sure from a business stand point they would probably never want to modify the hardware except in the case of miniturization and consolidation of hardware to save money.
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