LensRentals.com

The II Conundrum

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First, things first: this is simply an editorial. So there’s no worthwhile knowledge in this article, just my opinions.

A few years ago, when a new version of anything came out, here was the Lensrentals drill:

  1. Buy the new version, anywhere at any price because we couldn’t possibly get enough. Everyone would want one.
  2. Sell the old version, even new copies of the old one, because no one will ever want to rent it again.

Some of this probably reflected my personality: after all, I got into this because I’m a terminal gear-head and just had to have the latest and greatest. But it reflected what our customers wanted too. When a new camera or lens came out nobody wanted the old version, they sat on the shelves while we couldn’t possibly keep enough of the new version in stock. But people descended on a new item page like locusts on a wheat field. No matter how many we had, it was never enough.

We got burnt once, when the Canon 1D Mk III came out and was, shall we say, not ready for prime time. By the time we figured that out we had sold all of our Mk II bodies and couldn’t buy more at any price. And I really regret selling all of the excellent old Sigma 80-400 lenses when the less-than-excellent 120-400 came out. But overall, that was how it worked.

But I had a bit of an epiphany the other day. It started like this: I received an email from a customer thanking me for sending him the Nikon 300 f/2.8 VR II when he expected the original version. So I walked in the back and asked our techs
“When did we get the version II?”
“The last two we bought were version II. There aren’t anymore version I”
“I wasn’t very impressed with it on paper. You guys notice any difference in real life?”

They all started laughing at this point. The best answer I got, in Monty Pythonesque fake French accent was “Well, it has this II on the side. It looks vera nice.”
Our CFO who was wandering through quipped “And there’s this extra $1,000 on the invoice. It doesn’t look so vera nice.”

By coincidence, that was the same day Nikon announced the 200-400 VR II, so I started doing my research. Same MTF? check! Same opticals? check! II on the side? check! $1,000 more? check! Wait, didn’t they raise the price on version I $1,000 a few months ago? check! This is another $1,000? check!

It does have the new VR II system, so that’s an improvement, perhaps for those who shoot handheld and don’t need fast shutter speeds. And it does have the new Nanocoatings that reduce flare and ghosting. But wait, I shoot that lens a lot. I never see flare or ghosting with it. So back to the tech room (which is full of camera geeks who shoot all the time as you’d expect).
“You guys ever see flare of ghosting shooting the 200-400?”
They just looked puzzled. “No. Did a renter say it flared?”
Never had a renter say that, so I called a couple of folks that I know shoot this lens all the time. Nope. Never flare or ghosting. So basically they’ve improved something that doesn’t need improving.

All this got me thinking about some changes we’ve been noticing when new equipment is released. When Canon upgraded the 30D to the 40D we weren’t really impressed with the difference. But the 40Ds rented like hotcakes and the nearly identical 30Ds were sold at bargain prices. But when the 5DII came out, we continued to have a lot of demand for the original 5D. And the Nikon 300 and D3 continued to rent strongly when the 300s and D3s came out so we’ve continued to stock them. We even bought a few NIB copies of the old versions because their demand continue to be so high.

Both manufacturer’s have released II versions of their 70-200 f/2.8 lenses, but the old versions continue to be so popular that we’ve been buying new copies of the old lenses. We can’t keep them in stock. This surprised me a bit because in both cases the new II version has some distinct advantages over the older version. But then I remembered my initial response when the II version was releases: “WHY? They both desperately need to improve their xx-400mm zooms way more than the 70-200.” The old versions were recognized as excellent lenses. Yes, the newer versions are better, but not for everyone. If I was shooting a DX sensor Nikon body, I wouldn’t have upgraded from version I. And for sportshooters who have fast shutter speeds, the better Image Stabilization in the Canon II isn’t a big deal. But the $600 price difference (or proportionate rental price difference) for the new version is pretty significant.

So I did a little looking in our history to see when this started happening, when people stopped rushing for the latest and greatest. We buy copies of lenses in response to demand (when a new lens or camera comes out we preorder about half of what we expect to need, but then buy the remaining copies as demand dictates), we can see which new releases were more or less popular than we expected just by looking at our purchasing history. Same thing on the selling side: if lenses are not renting we’ll sell them before their two years are up, and this is easy to track.

In the fall of 2006, Canon released the 85 f/1.2 Mk II everybody wanted one, and nobody wanted the original version, even though there were only minimal differences. Despite minimal changes, we were selling all of the Mk I copies within a couple of months of the Mk II release. In 2007 the 40D and 1DMkIII both were immediately popular. So were the Nikon 14-24 and 24-70 f/2.8 lenses, even though both were replacing excellent lenses in the 17-35 and 28-70 f/2.8 zooms. In all of these cases were purchasing lots of new versions and within a few months of release. The older versions of the Nikon 17-35 and 28-70 remained in stock, but that was mostly because of videographers who needed manual aperture lenses.

But in 2008, the Canon 24 f/1.4 Mk II, while clearly an improvement on the original, was only in moderate demand after its release. The original version remained popular with us until all of our copies were retired at 2 years old. The Nikon 50 f/1.4G was received with similar “whatever” enthusiasm by our renters and we still continue to rent the old version almost as frequently as the new one. The D700 was immensely popular and we bought more than expected, but it was an entirely new kind of camera, not an upgrade.

In 2009 the pattern became quite clear: The Nikon 18-200 VR II (a very minor upgrade for a 15% price increase) saw very little demand, while the 35 f/1.8 DX (a brand new lens) flew off the shelves.The D300s and D3s were only mildly popular, and demand for the D3 and D300 didn’t slack at all—we’re running out of those ‘legacy’ bodies before the demand is slowing. The D3x, on the other hand, has created much more demand than we expected as did the Nikon 24 f/1.4 prime and the 16-35 f/4 zoom, all of which are basically new technology. The 300 f/2.8 VR II has caused almost no interest (we’ve had three people specifically inquire about it, compared to dozens inquiries about the 24 f/1.4). We’ve had only one person even ask about the new 200-400 f/4 VR II. We bought far fewer copies of the 70-200 VR II than we expected to because there just hasn’t been that much demand.

On the Canon side the pattern isn’t much different. The Canon 17mm and 24mm TSE II tilt-shift lenses (the former a new lens, the latter a major upgrade) couldn’t be kept in stock despite being expensive rentals. The 7D immediately became one of our most popular cameras, ever, as did the 5D II. But the 50D and original 5D remained in fairly high demand. The 100 Macro f/2.8 IS L is popular, but demand for the original 100 f/2.8 Macro hasn’t dropped at all. In fact we stock more copies of it than we did before the release of the “II”. We have twice as many copies of the Canon 70-200 f/2.8 IS Mk I rented as we do the newer Mk II version. In fact, we’ve had no trouble keeping the Mk II in stock but have struggled a bit getting enough copies of the Mk I.

So what’s the point?

Beginning in 2008 and moreso in 2009, Lensrentals began to see a trend in the way people responded to new gear releases. When something was really new, different, or improved people rented it in droves despite higher prices. Good examples are the Canon 17 and 24mm TS-E and Nikon 24 f/1.4 and 16-35 f/4 lenses, Nikon D700, Canon 5D II and 7D cameras. Unlike previous years, new releases that offer borderline improvements aren’t causing people to flock to the “latest and greatest”. Things like D300s and D3s cameras, 70-200 f/2.8 II zooms, and slightly improved primes have real improvements that some people want and others don’t care about. Unlike years past, people aren’t rushing to upgrade just because a new version is out.

There’s still plenty of demand for expensive new gear when it really is a major improvement or provides major new functions. But what I refer to as the “nonupgrade version II”, the good lens that is getting some minimal makeover and a 15% price increase, is generating no interest at all. Sure the IS unit may be a little better (and I’ll try not to be cynical and just say the manufacturer has used up all the old IS units anyway) or the coatings may be a little better (ditto on the old coatings) or the exact same lens may have a “zoom lock switch” added to create a 15% price increased version II (yes, I haven’t forgotten you, Nikon 18-200 VR II). But it doesn’t appear that anybody is rushing to pay the premium for the new version. Its been a tough couple of years economically. Apparently we’ve all learned to be a bit wiser with our dollars and not preorder every new release the day after its announced.

The manufacturers aren’t stupid, they certainly realize nobody is saying “FINALLY! Now that the 200-400 has NanoCoating I’ll get one!”. But the II label seems to give some justification (or perhaps just distraction) for adding $1,000 to the purchase price. There’s a lot less moaning and groaning than there might have been if the original lens had a second $1,000 increase so soon after the last one. (BTW – I’m picking on the 200-400 but I honestly believe the new price is justified — it was really relatively cheap considering what you got for the money in the past, especially compared to the price of the supertelephoto prime lenses.)

In fact, maybe we’re going to see the a complete turnaround: In 2007 when a new product was announced dozens of the old version immediately were listed for sale on eBay and every used forum, and new versions preordered months before they were available. In 2010 when a new version is announced, we may see the old version getting bought off the shelves of every retailer as people considering the lens decide the old version is a bargain compared to the II price.

As for me, I’ve learned my lesson. I’ve spent the last weekend stocking up on some of the remaining copies of certain Mk I versions at the old price. They’re bargains. And when the stock runs out we’ll have no choice but to buy the new versions at the new price.

One Response to “The II Conundrum”

Stephen said:

"Beginning in 2008 and moreso in 2009, Lensrentals began to see a trend in the way people responded to new gear releases."

No doubt the GFC has a lot to do with that.

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