In 2000-1 Leica had no digital cameras in the marketplace at all, leading to a very awkward annual results meeting in July 2002.

By then, Osaka-based Matsushita wanted to break into digital photography with its Panasonic brand. A thoroughly beneficial partnership followed, with Panasonic getting the credibility of Leica lenses on its Lumix range of compact digital cameras, and Leica getting sensor technology and electronics that it simply didn’t have.

This didn’t kill the criticism that Leica had lost its way, and the company rode a knife edge of trying to charge a premium of as much as 50% for what looked and felt like a Panasonic in all but name.

Meanwhile, the German workforce, no doubt alarmed at the sight of Japanese manufacturing prowess, soldiered away, making brass-bodied cameras that could only shoot 35mm film. Their wages were paid solely by the party faithful, who for now deemed the whole digital revolution an affront to civilised values.

The trouble was that they were wrong, and so were the Leica managers who agreed with them. For sure, there is currently a renewed vogue for 35mm film cameras, just as the advent of music CDs stimulated a resurgence in vinyl. And one might ponder whether in time Leica will be the Patek Philippe of the camera world, scorning the digital equivalent of quartz for a solely mechanical existence.

But were this to happen today, Leica would have to shrink its 900-strong workforce by half and become a shadow of its former self, whereas Kaufmann wants profitable growth.

That, apparently, is the difference between watches and cameras in 2007: Leica, unlike Patek, has had to redefine itself as a branch, albeit a rarefied one, of consumer electronics.

As Leica CEO Steven Lee notes, Leica is partly the victim of its own very high standards. There is a thriving – not to say fanatical – following for historical Leica lenses and cameras that finds its expression in ever-rising auction prices for rare pieces.

Yet Lee calculates that for every €4 of “heritage spend”, Leica Camera gets just €1, mostly via its repair centre. He wants to re-hire some of Leica’s retired experts who remember the older cameras, building up a restoration business as opposed to a mere “repair centre”, thereby bringing those dollars back to Leica.

Today I’m in the rare situation of sitting with both Lee and Kaufmann in a clinically white, largely unadorned office in Solms sipping tea, and what is so striking is the obvious sympathy on the part of the Austrian for the Californian.

Appointed just last September, Lee is a youthful 52-year-old Chinese-American from California, while Kaufmann is a Salzburg-based investor fuelled by Austria’s largest private fortune, his inheritance from industrial packaging company Frantschach.

The pair forged a pact on the sandy foreshore of the Atlantic Ocean at the Ponte Vedra beach club in April 2006 – this was the kernel of what is now unfolding at Leica.

During the meeting, which resulted in a touch of sun blush for both parties, Kaufmann refined his strategy for Leica while Lee suddenly emerged as the company’s next obvious leader – and not just because his optimistic, can-do Californian vibe was desperately needed at the stuffy, hidebound German firm.

Not only was the “beach meeting” the most important three and a half hours in the history of a company that began in 1849 and nearly ended in 2005, it may also have ushered in one of the great double acts in the world of luxury goods.