I put “full frame” in quotes because I think it’s a dumb term, but nevertheless it’s the standard term for a camera that contains a 35mm-film-sized imaging sensor within a system that’s backwards compatible with old 35mm lenses. The term implies that the size of 35mm film systems was based on some Natural Law and that any size less than that is somehow missing something vitally important. But in fact, it’s just an arbitrary size dating back to 1920s, at which time it was considered a novelty because the quality of film in the 1920s was extremely poor compared to modern times, and 35mm was just too small to get decent picture quality. It wasn’t until the 1960s that film finally became good enough such that 35mm was able to replace medium format as the most common film size.
By the 1990s, medium format was extremely rare, and medium format cameras were much more expensive than 35mm cameras. But the price disparity was caused not so much because bigger cameras were that much more expensive to manufacture, but because medium format became a niche product used only by serious photographers, and serious photographers are willing to pay a lot of money for their equipment. Even today, a Hasselblad medium format kit sells for $5,000. That’s a lot of money for a film camera!
So we see, with professional quality film cameras costing so much money, why do we expect professional quality digital cameras to sell for less than $5,000? Full frame is the medium format of the digital age, and as such it will sell for very high prices compared to smaller format cameras. The full frame Canon 1Ds Mark III sells for $8,000 (when it’s even in stock), and the new full frame Nikon D3 sells for $5,000.
Although it seems obvious to me that full frame will forever remain an expensive niche product, for some strange reason there is a chorus of misinformed internet forum posters who think that cheap full frame cameras are the Holy Grail of digital photography, and that the $1,000 full frame camera is just around the corner. (This is unlikely because the full frame sensor just by itself probably costs $1,000, and because Moore’s Law doesn’t apply to digital camera sensors the way it applies to normal computer chips, the price for large sensors will stay high for many years.)
But doesn’t the Canon 5D sell for the low price of only $2,100? My take on this is that back when Canon originally developed this camera, the marketing department bought into the idea that smaller sensor DSLRs were just a stepping stone to the day when full frame DSLRs would be affordable. They probably changed their minds on that. It’s probably selling for such a low price because of inertia—it no longer costs that much to manufacture, so they are just following standard procedure in lowering the price as the product nears the end of its cycle. But this is a bad marketing strategy for Canon, because the low price of the 5D is cannibalizing sales from its more expensive 1Ds. If Canon does ever introduce a replacement camera for the 5D, my prediction is that it will sell for $4,000, thus frustrating the hopes of those who are expecting cheap full frame DSLRs.
Counter-intuitively, now that Nikon has a full frame camera on the market, there is less incentive for Canon to try to introduce lower-priced full frame cameras. When Canon had the only full frame cameras, they were stealing customers from Nikon. But now that Nikon has a full frame camera also, the last thing that Canon wants is a full frame price war, which lowers profits for both Canon and Nikon. The thing to remember about the DSLR market is that it’s an oligopoly, and oligopolistic companies seldom compete against each other on price. Furthermore, a less expensive full frame DSLR cannibalizes sales from Canon's own much higher priced 1Ds Mark III, so it's possible that Canon may never release a replacement for the 5D.