While eighth would still put them in the upper echelon of nations, they've become accustomed to loftier views.
"It's not a pretty picture," Coates told a forum. "We're going there to finish top five, that hasn't changed. [But] the benchmark looks around sixth, seventh or eighth - more likely seven or eight."
Coates is worried that sports spending by Governments in Great Britain, France and Germany has widened the gap between the European powers and Australia, but Smith isn't feeling so pessimistic.
"Our cyclists and rowers are at the top of international competition alongside countries like Great Britain, Australia, the Netherlands and Germany. These teams operate with vastly superior budgets," Smith said.
"For a small country, we perform strongly at the Olympic Games. New Zealand finished Beijing in fifth position on the per capita medal table, ahead of Australia [which finished seventh]."
The last 12 months had seen strong world championship performances in rowing, BMX, kayaking, equestrian, cycling and athletics, bolstering Smith's belief that good results would follow at the Olympiad.
"Unlike the Australians, we expect New Zealand will finish London 2012 with more than the nine medals received at Beijing 2008," Smith said.
New Zealand finished 25th on the medal table at Beijing, with three golds and nine medals overall.
That was one placing worse than their 2004 result, though they gained four more medals.
The one gold and three bronzes accrued at Sydney 11 years ago sent sports bosses back to the drawing board in an effort to re-establish some global credibility.
One of the answers was to increase funding and target that funding more effectively. By injecting some fear into the populace, Coates is no doubt angling to secure more long-term funding for priority sports.
Based on results in Olympic sports over the past year, Coates said Australia was on target for 30 medals in London, 11 of them gold.
The AOC's projection of 44 medals before Beijing proved largely accurate, Australia eventually hauling in 46. This placed them seventh on the medal table, after finishing fourth in both their home Olympics in 2000 and in Athens four years later.
Not since 1992 in Barcelona, when the team was 10th overall with 27 medals including seven golds, has Australia finished outside the top seven at a Summer Games.
High hopes
New Zealand's best medal chances:
* Valerie Adams
(Athletics, shot put)
* Hamish Bond and Eric Murray
(Rowing, pair)
* Mahe Drysdale
(Rowing, single scull)
* Rebecca Scown and Juliette Haigh
(Rowing, pair)
* Storm Uru and Peter Taylor
(Rowing, lightweight doubles)
* Nathan Cohen and Joseph Sullivan
(Rowing, double scull)
* Lisa Carrington
(Kayaking, K1 200m)
* Sarah Walker
(Cycling, BMX)
* Men's team pursuit
(Cycling, track)
* Women's team pursuit
(Cycling, track)
* Andrew Murdoch
(Sailing, Laser)
* Andrea Hewitt
(Triathlon)
* Three-day event
(Equestrian, teams).
