Canon Business General

Canon Inc. releases Q1 2019 financial results

Canon Inc. has released its 2019 Q1 financial results.

Canon presentation summary of the imaging division:

In the first quarter, sales of interchangeable-lens cameras were down 19% to 850 thousand units. This reflects the combined impact of accelerated market contraction for DSLRs, in particular, entry-level models, and economic slowdown in China, which is a sizeable market for interchangeable-lens cameras.

The habit of capturing images with smartphones with improved cameras has become a part of the daily lives of consumers. As a result, the market for entry-level DSLRs is contracting at a pace that exceeds the outlook we had at the beginning of the year. That said, we expect the user base of professionals and advanced-amateur, people who value the image quality and expressive possibilities afforded by cameras with large sensors and an abundance of interchangeable-lenses to remain. For the market overall, however, we expect the trend of market contraction to continue for some time.

In light of these circumstances, we decided to reexamine our full-year projections for the market and our own unit sales. We now expect the market and our own unit sales to decline 17% to 8.6 million units and

4.2 million units, respectively.

Mirrorless cameras, known for being small and lightweight, are increasing their presence in the market. Amid this situation, we will steadily shift our focus from DSLR to mirrorless cameras with the aim of maintaining our overwhelming competitiveness, which we have built upon DSLRs.

In the first quarter as well, we grew our unit sales of mirrorless cameras at a pace far exceeding the overall market, thanks to such new products as the EOS M50 and EOS R. Additionally, at the end of the quarter, we further enhanced our lineup, with the launch of the EOS RP, a smaller and lighter mirrorless camera equipped with a full-frame sensor and the same new mount found on the EOS R. Additionally, we plan to release six new models of RF lenses within the year. Users have not only praised the performance of these bodies and lenses but also expressed their high expectations for the R system overall having felt our sense of urgency in strengthening our lineup over a short period of time. We will work to maintain sales growth of the EOS RP, which got off to a flying start, while also successively launching new RF lenses as we work to further stimulate sales of our strengthened mirrorless lineup.

From a profit perspective, in the full-frame sensor category where particularly high growth continues, even among mirrorless models, we will work to improve our product mix, actively expanding sales of both R System products. Additionally, for lenses with high profitability, we will not only promote sales of RF lenses but also continue to promote the appeal of our broad range of EF lenses. Furthermore, we will work to expand automation initiatives not only to other products but also other processes, raising our cost competitiveness and linking this to a recovery in profitability.

Next, compact cameras.

For the full year, we expect the market to shrink by 19% to 8.5 million units and our unit sales to decline 18% to 2.6 million units. This is the same outlook we had at the beginning of the year. Going forward, we will continue our efforts to expand sales of premium G-series models in our effort to link this to a recovery in profitability.

You can see the full 2019 Q1 financial breakdown at the Canon investor relations site here.

unfocused

EOS 5D SR
Interesting numbers.

Entire ILC market is 8.6 million and Canon expects to sell 4.2 million, so Canon controls just under half the market and everyone else splits the remaining 50%.

The compact camera market is 8.5 million, and Canon has 2.6 million of that, or roughly 30% of the market.

First quarter ILC sales were 850,000, but Canon expects to sell 4.2 million over the year. That's about 20% of their annual sales in the first three months of the year. I'm guessing that the first quarter is the slowest quarter of the year.

Canon is relying more heavily on the enthusiast market to maintain market sales as compact DSLRs (Rebels) and point and shoots decline in sales. However, it's the lower end of the product line (RP) that is making the money. No surprises here, just confirmation of what most of us already knew.
 

xeppelin

I'm New Here
Apr 22, 2019
20
9
"... accelerated market contraction for DSLRs, in particular, entry-level models, ... "

Canon sells most.
Canon knows best.
Canon spends multi-millions on market research.
Canon offers about a dozen different "Rebel Kiss" DSLRs in parallel.

Smart Canon!
or not?

LOL.
 

Mt Spokane Photography

I post too Much on Here!!
Mar 25, 2011
15,235
527
Even before the shock of Lehman Brothers, when we were posting positive results, we started
preparation to transform our business portfolio recognizing its necessity, with the anticipation of
possible market maturity of our core businesses. As a first step, we started acquiring industrial
equipment companies from 2005. Later, we sequentially added acquisitions in areas such as
commercial printing and network cameras. And in 2016, we ushered in Medical. As a result, we now
have four new businesses.

In general, each of the new businesses is growing, and this year’s total new business sales ratio
to our company’s overall sales is expected to increase to 25%, whereas it was only 9% in 2015. The
transformation of the business portfolio is progressing as we planned aligned with our mid-term
direction. As a result, our company has changed itself from a traditional camera and office
equipment oriented company to one that now has new business spheres.

As for existing businesses such as cameras, we expect the market contraction to continue for
another two to three years, due to the rise of the smartphones. That said, there is a portion of
the market that will certainly remain, in particular segments serving the needs of professionals
and advanced amateurs. Therefore, in order to defend our top market share position, we will sustain
our maximum business efforts. At the same time, we are taking measures to shift our business focus
toward B2B, expanding our business sphere to automotive and industry use.

This year, environmental changing factors such as the global economic slowdown triggered by trade
friction between the U.S. and China and faster than expected camera market contractions, are
impacting our results, temporarily stalling our business performance.
That said, the new businesses as a whole are growing steadily realizing business portfolio
transformation as we have planned. Thus, we will further accelerate and try to link to recovery
from next year on.




184014
 

Mt Spokane Photography

I post too Much on Here!!
Mar 25, 2011
15,235
527
Don't expect a lot of APS-C DSLR's, they are not selling. That is probably why there will be no 7D MK III, it would lose a ton of money. Canon is pushing Mirrorless, and Full Frame.

Mirrorless cameras, known for being small and lightweight, are increasing their presence in the
market. Amid this situation, we will steadily shift our focus from DSLR to mirrorless cameras with
the aim of maintaining our overwhelming competitiveness, which we have built upon DSLRs.


In the first quarter as well, we grew our unit sales of mirrorless cameras at a pace far exceeding
the overall market, thanks to such new products as the EOS M50 and EOS R. Additionally, at the end
of the quarter, we further enhanced our lineup, with the launch of the EOS RP, a smaller and
lighter mirrorless camera equipped with a full-frame sensor and the same new mount found on the EOS
R. Additionally, we plan to release six new models of RF lenses within the year. Users have not
only praised the performance of these bodies and lenses, but also expressed their high expectations
for the R system overall having felt our sense of urgency in strengthening our lineup over a short
period of time. We will work to maintain sales growth of the EOS RP, which got off to a flying
start, while also successively launching new RF lenses as we work to further stimulate sales of our
strengthened mirrorless lineup.
From a profit perspective, in the full-frame sensor category where particularly high growth
continues,
even among mirrorless models, we will work to improve our product mix, actively
expanding sales of both R System products. Additionally, for lenses with high profitability, we
will not only promote sales of RF lenses, but also continue to promote the appeal of our broad
range of EF lenses. Furthermore, we will work to expand automation initiatives not only to other
products, but also other processes, raising our cost competitiveness and linking this to a recovery
in profitability.
 

camerabug

1D Mark IV
Jul 10, 2011
76
13
The other end of the lens
I'm smelling even sooner abandonment of Canon's DSLR line from this recent financial report/projection. They continue to suggest the supporting of the EF mount but that doesn't smell any better. I have a good number of Canon EF & DSLR's in my possession. This inevitably will decide on a new direction.
 

amorse

EOS RP
Jan 26, 2017
321
236
www.flickr.com
Well, I guess that explains the suggestion that Canon may eventually release an even cheaper model than the RP. If FF bodies are selling, lowering the bar for entry will make a big difference. I can't help but imagine that they need to really prioritize development of low-cost RF lenses to match up with their low-cost models.

It'll be very interesting to see how this year plays out.
 

Ale_F

6D - 7D
Nov 22, 2018
26
13
My 50c on APS-C: I think the market of 4000D, 2000D, 250D, 800D, 80D and 7D2 is too segmented and now outdated. When I started, the entry solution was the 350D. Back to the past:
MILC world: APSC and FF is the future, all segment, all models
DSLR:
APS-C: 3 models like 850D, 90D and 7D3.
Full frame: I imagine 5D5 and 1dx3, no others.
 

neuroanatomist

I post too Much on Here!!
Jul 21, 2010
23,990
1,206
"... accelerated market contraction for DSLRs, in particular, entry-level models, ... "

Canon sells most.
Canon knows best.
Canon spends multi-millions on market research.
Canon offers about a dozen different "Rebel Kiss" DSLRs in parallel.

Smart Canon!
or not?

LOL.
Ignoring your facetiousness, yes...smart Canon. The market is changing more than previously, and Canon has adjusted their strategy to match.
 
Reactions: justaCanonuser

ethanz

1DX II
Apr 12, 2016
951
205
ethanzentz.com
Even before the shock of Lehman Brothers, when we were posting positive results, we started
preparation to transform our business portfolio recognizing its necessity, with the anticipation of
possible market maturity of our core businesses. As a first step, we started acquiring industrial

....

That said, the new businesses as a whole are growing steadily realizing business portfolio
transformation as we have planned. Thus, we will further accelerate and try to link to recovery
from next year on.
Is that from Canon's financial results? If so, that is quite the statement. They were anticipating it for for 12 years.
 
Reactions: Photo Hack

shawn

I'm New Here
Jan 28, 2019
12
11
My problem with Canon is they sit around and act like market contraction is an unavoidable consequence of cell phone use... Why don't they DO something to compete better with cell phones??? Why don't they make the cameras capable of posting to instagram? Is it really so far fetched? I mean, if they came up with something that let people do what they want to do, which is share pictures on the fly, then the only advantage a cell phone has would be the portability.
 

amorse

EOS RP
Jan 26, 2017
321
236
www.flickr.com
My problem with Canon is they sit around and act like market contraction is an unavoidable consequence of cell phone use... Why don't they DO something to compete better with cell phones??? Why don't they make the cameras capable of posting to instagram? Is it really so far fetched? I mean, if they came up with something that let people do what they want to do, which is share pictures on the fly, then the only advantage a cell phone has would be the portability.
Would that be enough though? I don't think cell phones maintain an advantage just because they're connected to social media and the internet, they've got an advantage because nearly every person has one on them all the time, and people fiercely resist giving them up. You could argue that many Canon models already have the power to share on social media though maybe not as directly as some would like. For me, I've frequently connected my 5D IV to my phone via wifi, raw processed an image on the phone and had it on instagram within minutes after shooting.

For applications like Instagram (where resolution is largely irrelevant), one could argue that a phone's camera isn't that far behind a full featured camera body for many users (obviously excluding professional photographers and amateur photography enthusiasts). If we think back to who was using point and shoot cameras, it was often people who just wanted some nice family and vacation photos - I'd argue that a reasonably good cell phone camera will be more than enough for that application, so why would those people bother with a full camera?

I'm honestly not sure what Canon could do to increase competitiveness with cell phones, other than playing up the benefits a larger sensor brings which is having physics on your side, though obviously only a portion of the camera buying population would even notice the difference, hence the expectation that new Camera buyers will move up market. For instance, I really don't think many people could tell the difference on Instagram between the same image shot with a 4000D with its kit lens in perfect light versus a dual (or more) lens cell phone. As cell phones continue to use software and computational photography to mimic the results a larger sensor can bring, I think you'll see even more potential low-end camera buyers just rely on their cell phone - not everyone can tell the difference in the end result anyway.
 

neuroanatomist

I post too Much on Here!!
Jul 21, 2010
23,990
1,206
My problem with Canon is they sit around and act like market contraction is an unavoidable consequence of cell phone use... Why don't they DO something to compete better with cell phones??? Why don't they make the cameras capable of posting to instagram? Is it really so far fetched? I mean, if they came up with something that let people do what they want to do, which is share pictures on the fly, then the only advantage a cell phone has would be the portability.
What makes you think they haven’t tried? It’s not just portability, it’s also carrying a second device that duplicates just one function of a device you are already carrying.
 

woodman411

EOS T7i
Aug 1, 2017
91
36
USA
Would that be enough though? I don't think cell phones maintain an advantage just because they're connected to social media and the internet, they've got an advantage because nearly every person has one on them all the time, and people fiercely resist giving them up. You could argue that many Canon models already have the power to share on social media though maybe not as directly as some would like. For me, I've frequently connected my 5D IV to my phone via wifi, raw processed an image on the phone and had it on instagram within minutes after shooting.

For applications like Instagram (where resolution is largely irrelevant), one could argue that a phone's camera isn't that far behind a full featured camera body for many users (obviously excluding professional photographers and amateur photography enthusiasts). If we think back to who was using point and shoot cameras, it was often people who just wanted some nice family and vacation photos - I'd argue that a reasonably good cell phone camera will be more than enough for that application, so why would those people bother with a full camera?

I'm honestly not sure what Canon could do to increase competitiveness with cell phones, other than playing up the benefits a larger sensor brings which is having physics on your side, though obviously only a portion of the camera buying population would even notice the difference, hence the expectation that new Camera buyers will move up market. For instance, I really don't think many people could tell the difference on Instagram between the same image shot with a 4000D with its kit lens in perfect light versus a dual (or more) lens cell phone. As cell phones continue to use software and computational photography to mimic the results a larger sensor can bring, I think you'll see even more potential low-end camera buyers just rely on their cell phone - not everyone can tell the difference in the end result anyway.
Agree, hopefully Canon can maintain the physics advantage with their larger sensors, but maybe they'll have to eventually partner with a mobile maker to increase their computational photography abilities - Samsung or Huawei come to mind, someone big enough to really help. I'm guessing if Canon partnered earlier, they would already have a well implemented panoramic mode, better object detection (recognizing pets for example), or how about detecting multiple faces and automatically selecting the widest aperture to get all faces in focus? Anyway, the possibilities are endless, but again, Canon may need a partner to accelerate the computational side.
 
Last edited:

CanonFanBoy

EOS 5D MK IV
Jan 28, 2015
3,116
684
Irving, Texas
My problem with Canon is they sit around and act like market contraction is an unavoidable consequence of cell phone use... Why don't they DO something to compete better with cell phones??? Why don't they make the cameras capable of posting to instagram? Is it really so far fetched? I mean, if they came up with something that let people do what they want to do, which is share pictures on the fly, then the only advantage a cell phone has would be the portability.
Portability, included with contract for free (in many cases), fits in back pocket, etc.

Market contraction IS an unavoidable consequence of cell phone cameras. Want a camera to send to Instagram on the fly? Then the camera needs a phone number. But then, people are still carrying the phone.