Canon released their Q2 financials this week, and things are a bit of a mixed bag for the company. There have been a lot of external forces at play in the USA, China and Europe and that has affected Canon's profitability.
Canon breaks down their camera business in Q2:
Looking at interchangeable-lens cameras, in addition to market contraction centered on entry-class DSLRs, in 2018 we launched three new products that led to a high level of sales in the second quarter of last year. As a result, unit sales for the second quarter this year were down 22% to 1.08 million.
Against this backdrop, we successively launched strategic full-frame models into the mirrorless camera market from the second half of last year. The introduction of a high-end model, further heightened our presence in the market and at the same time had a positive impact on overall sales of our mirrorless cameras.
On the other hand, in the full-frame category of the market where price competition is increasing, as a result of prioritizing profitability, unit sales were below our target. However, for interchangeable-lens cameras overall, our unit sales were in line with our plan. As a result, we retained our full-year projection for unit sales. In terms of revenue, we did lower our projection to reflect a change in product mix to our plan. However, in the second half of the year we will stimulate sales through the launch of new lenses.
Specifically, we will enhance our lineup launching 5 new lenses for mirrorless cameras. Through kit sales that leverage our broad range of mirrorless camera lenses and by bundling cameras with accessories like our lens adapter that makes it possible to use our existing rich lens lineup we will promote further expansion of mirrorless camera sales.
In addition, we will further strengthen our efforts to generate user interest in our mirrorless cameras. As a large percentage of high-end models purchases involve the customer actually handling the model and trying it out before buying, in major cities in Japan and other markets, we will create even more touch points for users, proactively expanding opportunities to actually experience our products.
Additionally, for professional photographers, we will foster trust in our products, offering, among others, enhanced support at international sports events.
Through these measures, we will further raise our presence in the market for high-end models, which will also have a rippling effect on more volume oriented cameras and subsequently link this to a further boost in sales.
As for compact cameras, sales were in line with our plan. As such, we maintain our full-year unit sales projection. Through the launch of new products, we will raise the proportion of sales attributable to premium G series models and link this to improved profitability
All of Canon's financial material for 2019 is available here.
From products that are dependable and reliable, to their service when things go wrong. I trust Canon. Canon gets my $.
I suspect it'll be very different by 2023 when Digic 10 arrives ;-)
According to CIPA, ILC shipment numbers for Jan-May 2019 is only 72% of that in 2018.
Keith Cooper: I very much enjoy your writing at Northlight...and your (more informed than my) speculation here seems on point to me.
Let me guess, you found an MBA in a box of Cracker Jacks.
To be fair... he's got a point.
And it takes alkynes to make an interesting forum/bulletin board--I love checking in here daily.
I wonder how one of our most prodigious posters here would have responded while, in all likelihood doing 'A' work on one of my second semester organic chemistry exams, nevertheless did not answer every question on every exam...correctly.
For nearly all students, I don the professor's hat when they bring their queries about missed questions to office hour. These students and I enjoy the interactions that resulted, though...and we all benefit from the discussions that ensue.
For just a very small number, though, three decades of teaching orgo has taught me that some of the brightest students never EVER thought they were wrong. They worked hard and generally received 100% scores on their exams...in math, bio, chem and physics classes.
Except in my second-term organic class.;) Thankfully chairs and deans understand (I think!).
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There is no question that Canon is the most successful manufacturer in the 'camera space'.
There is also no question that Canon has fallen behind in certain segments of the marketplace.
And there is also no question that Canon is now trying furiously to do what they do well (be a 'fast follower').
Before turning to the academic world, I was an employee at General Electric's R&D Center (think Thomas Edison).
GE's management at that time talked out loud about being 'fast followers'. They boasted about it--and said (again, out loud) that they did not need to innovate.
Have you seen GE's stock price lately? Hell forget about valuation...today some believe that the future of the company as we know it is in doubt.
I hope Canon succeeds--my family and I have invested thousands in the brand!
And I think they will.
But it is not a certainty.
I was referring to the snarky reply to the bad idea.
On the other hand, Canon for too long does not offer what potential customers expect.
The drops could have been smaller if the company followed the customers' voice.
Instead, it has been pushing them towards the competition, and this for years.
I have been a loyal client of Canon for over 20 years, but also patience has its limits.
Just a pity
The market is getting smaller, but Canon is gaining market share. Which means the competition is not any better at "following the customers' voice".
I'd still like to see a 5DV. Give me ~30 MP, 10-12 fps, BSI sensor (just to keep up, really isn't needed), wider spread of AF points (most appealing aspect of mirrorless to me), a few other "20% improvements that add up" and take my money.
Equally foolish is being a ‘loyal client’ of any large company. Canon does not reciprocate — they don’t give a damn about you, personally. You’re just a number to them, if that. If the reason you continue to use Canon is brand loyalty, you should switch. Now.
Of course, maybe you would rather complain but not take action. That seems to be pretty common around here.