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It's called marketing. Ive "designing" a limited edition Leica is like Murakami being involved with Louis Vuitton.

Lecia needs people to believe that their cameras are worth a lot of money and involve a much greater amount of design work and craftsmanship than a standard Canon.

For the curious, Murakami = Takashi Murakami.

http://en.wikipedia.org/wiki/Takashi_Murakami

Do you really think they didn't consider this when making the device? Obviously, they gauged interest and determined that they'll make more money for charity by selling it.

Not necessarily. They also get good publicity out of it, so the cost is weighed against (value of charitable donation) + (value of equivalent advertsing/marketing campaign).

You assume they aren't getting anything else from that. Presumably it also counts as R&D for future products.

Reciprocally, Project (RED) also gets Ive's name to draw attention.

I think they just wanted to make a bloody awesome camera, that also happens to generate money for charity.