Canon has released their financial results for the 2nd quarter of 2018, while there was continued contraction of the ILC market, it did slow for the quarter. The EOS M50 appears to have driven sales in 2Q 2018 and Canon claims they now have the #1 spot for mirrorless marketshare in Japan for the first half of 2018 and continue to increase their marketshare in other markets around the globe.
Total unit sales have fallen in line with Canon's plan for the first half of 2018, but Canon is lowering revenue projection for the rest of the year. This is in part due to Canon's current focus on entry level models and attracting new users to the EOS system.
It was worse news for the compact market, as Canon saw a drop of 22% to only 840,000 units for the quarter and have dropped their full year projection for the market.
Full summary and official financial documents after the break.
From the Speech Summary:
For ILCs, the rate of market contraction slowed as we entered the second quarter. This reflects the stimulation of demand through the launch of new products, both by competitors and ourselves. Against this backdrop, we managed 1.38 million in unit sales, a decline of 3% compared to last year.
In the second quarter, sales were driven by the EOS M50, a strategically positioned mirrorless camera. Despite being an entry-class model, it incorporates features found in more advanced cameras while delivering easy operation for beginners. Through this, we are bringing new users into our ILC ecosystem.
Through the launch of these types of new products, for the first half, we have secured the top market share position for mirrorless cameras in Japan and are steadily increasing our market share position in other regions.
For the second half of this year, in order to reach a broader range of customers, we will implement our plan to aggressively use social media in our marketing as a way to cultivate new users.
Additionally, we will strengthen our promotional activities targeting advanced amateurs, a growing segment of the market. At the same time, we will work to further strengthen our lineup, launching new products in the second half of this year.
From a profit perspective, we will work to further reduce costs through the acceleration of automation at domestic plants and the promotion of in-house production, including production equipment itself. At the same time, we will thoroughly reduce operating expenses. Through these measures, we will work to effect improvement in profitability from the second half on.
As unit sales in the first half of the year were in line with our plan, we decided to keep our full-year projection. From a revenue perspective, however, we lowered our projection, taking into account the increased proportion of sales coming from entry-class models that were used to cultivate new demand. This, however, also resulted in ASP decline.
As for sales of compact cameras, our unit sales decreased 22% to 840 thousand units amid continued market contraction. As the market and our unit sales were below expectations in the first half, we lowered our full-year projection for the market and our own sales from 11 to 10 million unit and from 3.4 to 3 million units, respectively.
[pdf-embedder url=”https://www.canonrumors.com/wp-content/uploads/2018/07/2018-2QPresentation-Material.pdf”] [pdf-embedder url=”https://www.canonrumors.com/wp-content/uploads/2018/07/2018-2QResults.pdf”] [pdf-embedder url=”https://www.canonrumors.com/wp-content/uploads/2018/07/2018-2QSpeech-Summary.pdf”]
Canon is *******. They need to get their mirrorless game stepped up, otherwise they won't be #1. Oh wait... ;)
"From a profit perspective, we will work to further reduce costs through the acceleration of automation at domestic plants " the reason for the new lenses ;) ?
Totally in line with Thom Hogan's prediction:
"Initially a follower in film SLR, eventually a leader in autofocus SLR; then a follower in DSLR that again flipped to leader; then a follower in mirrorless which may be flipping to leader. Sense a pattern there? Canon isn't generally the first mover, but when they move they move. I think that anyone who underestimates the EOS M and whatever full frame mirrorless Canon decides to produce needs to rethink their position. I'd call Canon opportunistic and well managed... Follower that becomes a Winner."
Waiting for CIPA's shipment numbers in Q2 2018 to estimate Canon's market shares.
For Q1 2018, their market shares were at least (Canon tracks cameras sold, not just shipped) 31% for compact cameras and 43% for DILC.
When that article about their new automated plant(s) came out about a year ago, I think it was, they gave several reason for it.
One was lowered cost, to be sure, but, more importantly, they stated two other reasons.
Those two reasons are:
Less iteration in lens design, meaning faster turn-around in design, meaning, more new lenses on a quicker basis.
And, higher lens quality, as the new plants have less variation step to step. So tighter tolerances. It’s interesting to note, that a long time ago, Cooke had some of the most sophisticated lens designs of any manufacturer, but couldn’t manage to keep the QC where it was needed, so many of those lenses turned out to be meh.
A less sophisticated design made with much tighter tolerances will usually out perform a more complex lens made with poorer tolerances. If Canon comes out with better designs, and manages tighter tolerances, then their lenses will be much better.
Well, I would never claim they’d be ******* but it’s otherwise true- they did need to step up their mirrorless game to be number 1 in MILC, that’s why they released the M50. Wasn’t Sony #1 in MILC in Japan last quarter?
And they will release more MILC products this fall to continue that. Let’s hope that they’re not just stepping up “promotional activities” to target advanced amateurs with MILC but also with more advanced features in their forthcoming new mirrorless cameras.
By the way, “advanced amateurs” like great video features on their still cameras :)
No, it was Olympus.
To keep things in perspective, let us not forget that they are #1 without selling a single full frame mirrorless camera. Reading this forum, it is all too easy to forget just how small the full frame market is.
Not saying it isn't important. Full frame is a cash cow -- in part because people who buy full frame have more disposable income and more additional lenses than your typical APS-C owner. But, it's too easy for readers of this forum to get swept up into the mindset that any company's future is tied to the full frame mirrorless market.
Well, maybe one company's camera division is dependent on that market. And, time will tell if that was a mistake. I do know that that fact would keep me from investing a lot of money in Sony cameras and lenses.
Yes ... and at least at this point, FF mirrorless is only a small fraction of that small FF market. Will be interesting to see if/how that changes over the next few years.
It will stay that way, too, unless full frame cameras get much cheaper. Most people who buy ILCs are not looking for $2000 or even $1000 camera bodies. If you look at best selling kits, they're well under $500, sometimes with two lenses. People who come to forums like this might spend twice that on a tripod head, something incomprehensible to most people.
And also good to put in perspective that they are number partially because they are selling lowest common denominator APS-C models at cutthroat prices to the masses. It will be interesting to see how their FF MILCs fare against Sony. All things being equal, I’d much rather have a Canon, but if they don’t achieve feature parity with Sony on things like 4K video (for advanced amateurs, etc.), they may have a tough time convincing people to switch back or not switch. Let’s hope they pull out all the stops (no pun intended).
What I spent on my 600/4 II and the RRS support gear for it could have bought a Toyota Corolla.
Not all of us.
The prices of some of Canon's flagship compact cameras like the G1X MK III is not helping compact sales. Its way over priced.
Even for the same money, I think I’d rather have the G7X II that I have, size being part of that in that I was replacing an S120 with it. And the lens compromises in the G1X III don’t seem to be worth it just to get a bigger sensor size, fine though the sensor is supposed to be.
OK, so I’m not the target audience, and I wonder who is. Ignoring the fact that someone with lots and lots of money might automatically buy the most expensive model just because they figure it must be the best one, what sort of folk would find that the G1X III meets their needs better than other choices, if they can afford one?
For DILC, Canon sold 1.05 + 1.38 = 2.43M units in Q1 and Q2 of 2018.
For fixed lens cameras, Canon sold 0.59 + 0.84 = 1.43M units for the first half of 2018.
In terms of market shares, Canon achieved at least 44% for DILC and 34% for fixed lens cameras in the first half of 2018.
Pretty decent numbers.
Maybe even the really right, lens-specific plate cost more than what I paid for any of my EF-M lenses. Simply because "innovative Canon" is unable to mill 2 dovetail grooves into their EF 600/4 lens foot. :)