Canon has released their final financial results for 2018. Sales were down year over year, but Canon managed to increase profits while dealing with declining sales in 2018.
Canon's thoughts on the imaging industry in 2018:
The 2018 interchangeable-lens camera market was impacted by restrained purchasing of advanced amateur models, prior to the launch of new full-frame mirrorless cameras by each manufacturer, and the further contraction of the DSLR market, mainly due to lower sales of entry-class models. As a result, the overall interchangeable-lens camera market continued to shrink. Even under these conditions, sales of mirrorless cameras—with their lightweight, compact body designs—continued to grow. This reflects improvements in mirrorless camera performance in such areas as autofocus, which is now comparable to that of DSLRs.
Against this backdrop, we are framing this year as one in which we take measure that will stabilize this business in the future. Within this, accelerating the expansion of our mirrorless lineup is a priority.
The key to this is the EOS R, our first full-frame mirrorless model, launched in the second half of last year. Although its contribution to last year’s performance was limited, sales have been strong due to its significantly improved optical performance, which has been highly rated by users. In order to further increase our presence in the mirrorless camera market, this year we will continue to expand our entire mirrorless camera lineup, consecutively launching new R-System products, including lenses.
Additionally, we will also promote change in the distribution of internal resources, from development to production as well as sales & marketing. Additionally, we will work to improve product mix, raising the proportion attributable to full-frame models that have high profitability by enhancing our mirrorless camera lineup and also expanding sales of full-frame models, particularly the EOS R.
We expect the market for camera equipped with full-frame sensors, which offer superlative descriptive performance, to continue growing at a stable rate. The customer base of this market are particular about image expression and pair their cameras with various lenses depending on the images they intend to capture. We will strive to improve total profitability by expanding sales of the full-frame model like the EOS R which will lead to expanded sales of lenses that have high profitability.
Due to the proliferation of smartphones, the number of people capturing images is increasing and this is widening the range of users seeking image capture features as high zoom ratios and video functions. In response, we are broadening our horizon with regard to image capture and will launch models that don’t fall under the typical notion of what a camera is.
For interchangeable-lens cameras, the market in 2018 was down 10% to 10.3 million units. Our sales were down 9% to 5.04 million units, which is a slower rate of decline than the market and reflects sales growth of our mirrorless cameras, including the EOS M50, a strategic entry-class model that was launch in the first half. In 2019, we expect the market to continue to decline, shrinking 7% to 9.6 million units. Despite facing a shrinking DSLR market, we expect our interchangeable-lens camera sales overall to be 4.7 million units as we grow unit sales through new mirrorless cameras, including the ones that were launched last year.
Next, compact cameras. In 2018, the market was down 22% to 10.5 million units. And in 2019, we expect the market to decline at a continuing rate of around 20%, reaching 8.5 million units. We expect our own unit sales to decline in line with the market. From a profitability perspective, however, we expect steady improvement thanks to a higher proportion of sales coming from our G series.
Canon's imaging goals in 2019 and beyond:
- Strengthen presence in the mirrorless camera market
- Expand lineup of products with the EOS R system at its core.
- Accelerate the development of new products.
- Improve Profitability
- Raise proportion of full-frame models.
- Expand sales of lenses that have high profitability.
- Expand the scope of production automation.
- New Category Cameras
- Stylishly designed cameras for young people that are waterproof and highly durable
- Cameras optimized for outdoor use in situations where smartphones have difficulty
- Cameras equipped with AI that automatically capture images
- Cameras that capture the decisive moment in various scenes
- Focus on improving product mix amid expectations
You can check out the full financial results data at Canon Global.
:confused: Sales double speak, less R&D money?
You are correct, but you have to cut them a little slack. They were developing the RF mount, R body and RF lenses while continuing with some serious EF lenses, a few more EF bodies and a splash of EF-M. Every manufacturer goes through these cycles of high demand development, followed by high demand production and VAVE. A subset of product design engineers are told to think of ways to increase margin, but given the forward guidance of a crashing camera market, it is probably also going mean a subset of design engineers will be looking or jobs soon.
It also looks like Canon is going to go after GoPro with action cameras for the youngsters. :rolleyes:
"For interchangeable-lens cameras, the market in 2018 was down 10% to 10.3 million units. Our sales were down 9% to 5.04 million units..."
I guess the above refers to units sold, not shipped. In any case, Canon's market share for ILC in 2018 is 5.04/10.3 = 48.9%. Another damn impressive statistic.
Pretty much. Photographers, while generally good people, are honestly really bad as a group when it comes to following the business news.
Sony's Alpha line, which so many people rightfully cheer, wasn't paid for by what was at the time Sony's camera division. They couldn't come close to affording it in reality. Sony paid for that development with profits from semiconductors. Sony is now a holding company and the camera division is now a seperate company, which by the way, is predicting to make, literally, no profit this year. That massive R&D investment from outside sources was a one time deal. Many analyst are predicting it will be sold, just as Sony has done in the past with Vaio. The last investor's day very strongly implied this is exactly what the new Sony holding company plans. Sony, literally, didn't have cameras anywhere in the company's future plans as they all but openly stated that gadgets were all going to be abandoned with the possible (probable?) exception of gaming systems. (Hence the editor in chief of Gizmodo's impassioned, and pleading, article not to follow through).
Nikon almost went out of business this past year. That's not hyperbole. The company completely reorganized as its last attempt to stave off filing for bankruptcy. If the D850 did not sell well (not flopped mind you, just had weak sales) Nikon would have filed for bankruptcy.
Canon has been preforming very well as a company, and smartly diversifying. They have not made the gamble on unaffordable R&D progress.
Make no mistake about it: the reason why Sony and Nikon (particularly Sony) advanced at the pace they have the last few years (the 5D ii is a good timeframe starting point) is because they've been following an unaffordable model. This is not a surprise, this is not a theory, but instead a well detailed fact among analyst and traders for years. Keep in mind Nikon was trading for barely over $10 a share heading into 2016. They either took a gamble (and they took several) or they were looking at going away.
That is just the math, and it doesn't matter what reviewers do or don't like about a camera say about the company.
Canon isn't behind the times, they're not releasing old technology, they're not 'out of touch' as photography blogs and reviewers might sometimes state. Switch over to financial and business news and you get the actual facts regarding these companies, not made up 'facts' about the companies based on a if a reviewer likes the button lay-out of a camera, the codec video is recorded in, or if a touch bar is 'stupid' or not.
In fact, Canon's approach, quite steadfast and well paced, is out-lined in great detail every year, as required in both the US and Japanese (among other countries) law. Anyone can read it if they so choose. Photographers are just bad at informing themselves when it comes to business news unfortunately, preferring to just make things up because they're fans or not of a particular product model.
Yeah, Canon's cutting back on R&D, just as they noted in their financial disclosures. They got their FF mirrorless production cycle on track now. Nikon is struggling, but will survive and the smart money is on Sony's new camera company being sold (just as Sony holding said they would do if the company doesn't turn a profit).
Kai is funny, Fro is sarcastic, and so forth, but they (reviewers in general) demonstrate all the time they don't know what they're talking about when it comes to the companies themselves. None of this is a secret, it fact it's all very well publicized information, photographers just have to be bothered.
They've got face detection working. I'd like to see a security camera that evaluates the scene for people and triggers recording based on that as an improvement on the ones that only do motion detection. (trying to think of areas where something they're already doing could give them an edge)
Do you have a link to that? It would be interesting to read.
No matter how innovative cameras get, they will not catch up to smartphones. A smartphone is not just a phone with a camera, it's a small computer that can do most of the things you used to need a computer to do and it also has a very usable camera and fits in your pocket.
Posting/sharing/retouching and so on in camera might seem like a nice idea but as some has pointed out the camera would then need it's own data plan. Instead, this could be done via the app that manufacturers already have and the smartphone could do the posting/sharing/retouching.
App system in camera. Sony did this instead of having features in the camera from factory.
Sensors pushing limits further isn't really needed to attract people to photography, ISO range is already ridiculous and DR is more than good enough.
The "fun" camera for old manual lenses is a very niche product.
Bottom line is none of these things trump what a smartphone brings. Where the camera shines is in the photographic experience. Everything outside of those moments spent capturing the image is done better by your smartphone/tablet/laptop.
Could be. But, one can argue that it must not be that way, it could be different. With a different user experience and connectivity, cameras could dip into the smartphone market. Besides the phone aspect and having that device always with you, one thing might be the UI, ease of use and the ability to transfer data into the web could be a thing that, using a better imaging device, might be of interest to some. And thats only the high tec fast side of things. Easy access wifi with fast transfer rates, perhaps even sim card support for using the bandwith of your provider. Make the camera a minicomputer as well, that can so much more than just capturing pics.
Todays smartphone have a powerful computer, run almost half a day with surfing, capturing pics, have lots of ram (in the 6 GB, which are mostly usable for apps and not the oprating system), display on and running. And on the other side you have cameras which run out of buffer after 15 Pics, which translates to under a GB and have battery issues. I see lots of potential here which isn't even touch by todays cameras.
Which is more attractive: a small, handy smartphone with a powerful processor that can make calls or a large camera with a powerful processor that cannot make calls? Regarding battery issues, I propose you compare the number of photos a tiny DSLR like the EOS 77D can take (sized down to ~ 12 MP like most smartphones) against that from a smartphone.
What I am trying to say is this: apart from image quality, there is no way an ILC can beat a smartphone. The Google Pixel 3 probably runs circles round most fixed lens compact cameras.
Can you please provide some links to sources to corroborate your statements around Sony potentially spinning off their camera division? My Google searches have failed to find this. Also, when I look into the their financial reports, it appears their camera division is making profit. I'm not Wall Street trader though, so perhaps I'm missing something. Their Operatin Income was positive in FY16, FY17 and projected to be positive for FY18.
or, perhaps very optimistically, the target being improved production efficiency = lower production costs = lower sales price