How Camera Makers Hedge the Downturn — Nikon, Unfazed, Counts on India and Brazil

While the big two are asleep, Sony is about to corner the market. Well, to be correct, Nikon is half asleep. They have a strategy to stay relevant; a strategy thats’ rather looking backward than forward. The winning formula? Just supply more of the same to new people.

With more than two thirds of its revenue coming from cameras and its new ventures years from bearing fruit, Nikon isn’t worried. Quotes from a telling Reuters report — what’s it called again? Right, “resting on one’s laurels”…:

    Nikon, world's number two camera maker, moves its focus to the developing world where DSLR "penetration is still very low." | The Age
    Nikon, world’s number two camera maker, moves its focus to the developing world where DSLR “penetration is still very low.” | The Age

  • Nikon: Nikon is counting on consumers in markets like Brazil and India to drive sales of its single lens reflex cameras (SLRs) in the mid-term and has no immediate plans to follow its rivals into other sectors. “Penetration in emerging markets is still very low,” says Nikon president Makoto Kimura. “Look at Brazil where we sell around eight million cameras overall. Only some tens of thousands of those are SLRs. That’s why I don’t think that sales will drop that much… When people realize the value of an SLR I think we will naturally see growth.”
  • Canon: Canon is hedging against further downturns in the consumer market with a push into surveillance cameras.
  • Olympus: Olympus already relies on medical equipment for most of its profit.

Chris Chute, research director of digital imaging at IDC, has a recommendation for the industry:

It may be time for camera makers to have a larger conversation about the brand and the technology and where company executives plan to take that.

Closing with Kimura’s quote of the day:

A surprisingly number of people don’t realize how different the quality between smartphone and proper camera photos are… and that’s our fault.

But unworried Kimura has obviously nothing to worry about. Never mind that his company’s share price has skidded 40% since late May. Nikon’s other share, the share of the high-end market, has kept its imaging unit in the black, for now, unlike that of Olympus and Panasonic.

(via Reuters)

  • Ray

    “Sony is about to corner the market”? How many times have I heard this? Perhaps you meant their superb lens line up, that might eventually happen, 4 body changes down the road.

    Could someone please remind me when the last time Sony made any money with its camera division, my memory doesn’t go back far enough.

  • Sony is a new player, achieving quite a lot within relatively short time, supplying Nikon, Apple and others with class-leading sensors and pushing the industry ahead with foresight and innovation. You should have heard about it.

  • Bengt Nyman

    Sony has built their business on technical innovations. Some have paid off big for Sony while others have been defeated by competing technologies.

    Sony is presently the source of choice for camera image sensors and EVF displays. Sony’s success with image sensors is clearly demonstrated by the status and success of the Nikon D800(E).

    To innovate in any field you have to be in it with both feet. Sony is therefore offering and selling cameras demonstrating Sony component technology.

    The revenue generated by Sony’s camera sales is limited for two reasons. It’s not Sony’s goal to replace their own customers. The 36 MP image sensor developed for Nikon was a Nikon exclusive for two years. This type of “exclusive-and-non-compete” agreement is common in industry.

    For the same reason the RX1 had a fixed lens and did not become an interchangeable lens A7(R) until recently.

    Sony is trying to corner the market for image sensors.
    Sony would also like to corner the market for EVF displays.
    The latter has turned out to be harder than the former because fast image sensor autofocus is not yet a convincing technology.

    Canon and Nikon have no inherent need to innovate. They already dominate the market.

    Sony’s innovations force Canon and Nikon to move. Nikon has chosen to buy image sensors from Sony. Canon has so far been trying to go it alone. However, Canon is falling further and further behind on image sensors as well as on lenses, except in the area of long focal length zooms.

    A rapidly growing part of the market is being captured by smart phones leaving only the upper end of the market to established camera manufacturers.

    Even if Canon and Nikon are temporarily happy supplying yesterdays camera technology to emerging markets, history has proven that philosophy to be vulnerable and unsustainable.

    With new camera technologies clearly demonstrated, a restructuring of the camera industry is inevitable within the next few years .

    The most likely scenario is that Canon and Nikon will be forced to retool to supply the next generation quiet, compact, high IQ mirrorless cameras while Sony profits as an innovator and component supplier, before going on to a new technological frontier.

  • Omer

    Sony obviously has the engineering prowess to step into the future. What Sony seems to lack is understanding of trust. Canon and Nikon are trusted, reliable camera makers. Pros use those cameras which does have a trickle down effect onto consumers. Sony is thrashing around trying to make waves but in the process appears directionless. SLT, NEX, Alpha, A-mount, E-mount, and as Ray suggested above, spiritless lens offerings.

    I own an NEX-6 which is paired with the 24mm 1.8 (a wonderful lens, but where are the E-mount AF !.4 lenses*?) Now there are rumors the NEX APS-C form will be discontinued in favor of the generic, cliché black DSLR form. And they want to compete with Canon with that? Well, good luck then.

    * I don’t want to use old, manual lenses.

  • One More Thought

    There are the voices on the internet, and there is the larger addressable market, most of whom doesn’t comment on the internet.

    Those of us who read and comment on sites like this one are in the minority. We are like car enthusiasts who analyze and talk about the latest Ferrari and Porsche, ignoring that most people are buying Toyota, Honda, Ford, etc.

    Most people taking photos just want a camera that works and one in which they can take their own personal pictures, what some would call snapshots. I think that leads to the following:

    First, the point and shoot market is being totally usurped by smartphones. That is hurting all camera companies, and will not stop. Smartphones are wonderful for snapshots and getting better by the day. Plus smartphones have a few advantages, namely they are always connected and so one can easily share the photo, and two, there are a plethora of apps to download and edit photos in all sorts of fun ways. So on one device I can snap my photo, edit it with a few taps of my finger, and then share it with people half way across the world, all within seconds.

    Second, on the higher end side, I think in some respects all of the equipment is so good that for most they don’t need to be always upgrading. Again, put yourself in the shoes of the average buyer. They get an entry level Canon or Nikon dslr, most likely with kit lens…it’s more camera than they likely will need. They take their snaps…they look good, and the camera holds up well over time. No need to always be buying something new.

    Most consumers do not look at Canon or Nikon and think they are not innovating, are lagging behind, etc…most consumers look at Canon and Nikon with awe…as the big guns in photography, and when they see and hold an entry level dslr, they think “wow”…this is a very powerful tool…do I really need one, or will my smartphone do the trick?

    And the low end dslrs are actually quite small and lightweight. The “boring” Canon SL1 is lighter than the much praised Olympus OMD EM1.

    So I give props to Sony, Fuji, Olympus, for innovating…but as Thom Hogan points out, there are only 3 camera companies actually making a profit on their cameras: Canon, Nikon and Leica.

    What will get my attention the most is if Sony, Fuji, Olympus, et al…release something that turns their camera business from the red into the black. Then you know you’ll have a truly disruptive product.

  • Bengt Nyman

    You and I are not Sony’s primary customers.
    Nikon is and if Sony has it’s way Canon would become one too.
    Sony is openly encouraging A7(R) customers to use legacy lenses because lenses and camera enthusiasts don’t count in Sony’s big picture.

  • “The Disruptive Product” — great thinking.

    The good thing about the industry’s and photographers’ “wrestling” with gear? No better innovation driving force than having to, under pressure.

    We’re just at the beginning of a very exiting digital imaging revolution. The tech specs are mostly met. Now they’ll have to talk diversification, specific brand identity, feel.