Canon thinks the camera market will drop by another 50% over the next two years

Dantana

EOS 80D
Jan 29, 2013
197
45
Los Angeles, CA
www.flickr.com
Innovation at Canon stopped in 2008. From 2000-2008 they were running rings around every other camera brand. But in 2008 they decided to focus their resources on higher margin systems and let EOS stay afloat with the barest minimum. Soon other companies moved in where Canon left off and Canon began to realize their strategy wasn't working. And now they are blaming what ?
I will make a prediction for Mr Mitarai. You sir, bet heavily on the cinemaEOS system . That's why your EOS line had laughable video offerings compared to the competition. Now watch as Indie filmmakers and journalists move away from clunky cinemaEOS type video cameras to mirrorless. The coming Panasonic S1/S1R is just the beginning.
I know that I can only ever speak for myself, but I would never want to shoot a film on a body designed for stills like the Sony A series or the upcoming Panasonic. The ergonomics make no sense. I would much rather use a camera designed for its purpose. There are plenty of cameras designed for cinema shooting from Canon, Sony, Arri, Blackmagic...
 

Mt Spokane Photography

I post too Much on Here!!
Mar 25, 2011
15,275
549
Keeping investor expectations low so anything other than worst scenario will beat their expectations.
Canon started their shift away from the Consumer camera market a few years ago, its still imaging, but things like security cameras and medical imaging. They have been very successful.

And, Yes, they are legally bound to tell investors the truth and not give out a rosy picture when its not true. Thats cost companies like Tesla a bunch of money plus losing their Chaiman.
 
Reactions: crazyrunner33

Mt Spokane Photography

I post too Much on Here!!
Mar 25, 2011
15,275
549
Do you know that Canon’s ILC market share is higher now than in 2008 when they ‘stopped innovating’? Does increasing popularity comprise ‘staying afloat with the barest minimum’? Does it hurt when reality slaps your opinions in the face?
The problem is that a bigger share of a smaller pie may still be a net loss. As markets decline, the stronger companies increase market share as weaker companies fade away. Then, there are relatively new Chinese companies that get stronger every year and are starting to become a significant market force(not yet, just starting). Their solution is to shift to industrial applications where the Chinese are often barred, at least for the next several years. Security applications, Medical applications, areas where the Chinese are at a disadvantage because the big spenders are governments.

Lower sales means fewer dollars to spend on R&D, which can be bad for the future as well. Canon R&D spending has or is shifting to the product lines that make the biggest profits, so don't be fooled by overall R&D budgets.

We may not recognize the company 20 years from now, when they have 100% market share of almost nothing.
 

bhf3737

---
Sep 9, 2015
386
271
Calgary, Canada
www.flickr.com
Popularity of taking pictures with a cell phone and ability to share in social media is huge and may have contributed to the shrinkage. However, there are many use-cases (e.g. wild life, macro, astro, long exposures, and photography in harsh conditions, etc.) require tools other than a cell phone with smaller sensor and limited reach lens.
Have you ever seen a pro photographer taking picture of wildlife in a safari trip, race cars, soccer games, wild animals in arctics, birds in fly, portraits using flashes and light modifiers, macro picture of insects, and 8 sec shots of fireworks using his/her cell phone? Have you ever seen a professional videographer shoot a blockbuster movie merely using a cell phone?
AI (the most abused technology term nowadays!) or whatever computation photography cannot replace the actual photographer/videographer and his/her dedicated camera. Yes, the market is shrinking but the genuine need for advanced cameras and lenses is there. Surprising trent indeed but not so much to worry about.
 

knight427

EOS T7i
Aug 27, 2018
86
98
With all talk of doom and gloom, I thought I’d go look to see what is actually happening at Canon. They have not released Q4 2018 yet, so this is based on Q3 estimates for 2018 (meaning these numbers are what Canon gave to shareholders as estimates using 3 quarters of actuals, and one quarter of estimates).

I had no idea what to expect, so this was illuminating for myself. Canon makes just under half of their revenue from Office, and about a quarter from Imaging. Ignoring the fact that imaging includes inkjet printers, we can expect that slice to be greatly reduced over the next two years. However, it will then be close to parity with Medical. However, if you look at profitability, Imaging is nearly twice as profitable as Medical (which was not at all what I had expected).

So if Canon hopes to offset a declining camera market, they can offset this on a dollar by dollar basis if they increase Office sales (roughly equal profit ratio). But if they want to offset it with increased Medical sales, they will need roughly $2 of new medical sales to offset every $1 lost to cameras. This also shows that Canon will still care a great deal about cameras, even at half-size, the market is still large and very profitable. Frankly, they can’t afford to just walk away.

Of course, cameras will have diminishing prestige within the company as they focus on other business units to find growth and this will impact development of new products.

Canon.PNG
 
Reactions: unfocused

Talys

Canon 6DII
Feb 16, 2017
2,048
317
Vancouver, BC
For wireless connection interface on Canon's DSLR is terrible to say the least. It's working half the time and it's painful to work with when it's working.
The 6D2 is actually pretty painless on WiFi to a PC, and it works very consistently (unlike some older cameras). However, it is painfully slow with CR2's. To a smartphone or tablet, it works ok, but CR2s are too slow to be useful for me.

On the other hand, having shot with wireless and wired tether on both Sony and Nikon too, Canon is by far the best. It isn't even close -- it's the difference between frustrating to horribly unusable. With a USB cable, Canon works decently well.
 

preppyak

EOS 6D MK II
Oct 18, 2011
972
39
Does it still make sense, for Panasonic, to enter a declining market? Less cake, more slices...
Consider the market they are entering versus the one they are in. The m4/3 market is gonna shrink as smartphones narrow the gap in image quality. If your smartphone is 90% as good as your G85, then the G85 suddenly goes from portable to very bulky. Its why they focused so heavily on video, a space where smartphones are still WAY behind and cant possibly match for audio connections, etc.

Whereas the full-frame camera market wont be overtaken by smartphones, basically ever. They're bought by people with either significant disposable income, or who make money using the camera. So it ensures return customers and further investment.

Panasonic is making the smart choice to make money in a world that wont shrink as fast while probably spending less R&D on a market thats been shrinking for a decade now. And since they're so far in front of Canon/Nikon/etc in video, they dont need the GH6 to come out for a while. That said, Im hoping Panasonics solution to mirrorless full frame matches what they've done in the m4/3 space...making genuinely small lenses and finding real weight savings in the mirrorless design.
 

Rudeofus

EOS 80D
Jun 1, 2013
141
5
Popularity of taking pictures with a cell phone and ability to share in social media is huge and may have contributed to the shrinkage. However, there are many use-cases (e.g. wild life, macro, astro, long exposures, and photography in harsh conditions, etc.) require tools other than a cell phone with smaller sensor and limited reach lens.
The number of Canon dSLRs sold every year is huge, and it is orders of magnitude above the number of photographers doing these rather special types of photography. There will always be a need for dSLRs, but the numbers sold to this market segment may or may not support the business model of producing them, much less the research required to push the envelope of technology.

PS: I still remember and laugh about NeuroticAnatomist's immature and invective laden ramblings directed against me, when I predicted exactly this market crash several months ago :D :D
 

Lacikuss

EOS 6D/RX100IV
Jan 27, 2019
3
0
Well, if the current camera market of 10 Million units/year is going to fall 50% in the next couple of years and Canon plans to sell 5-6 Million units in the same period, that means that Canon will be the only Camera maker with 100% of the market. What I'm missing?
 

tmroper

EOS 80D
Sep 22, 2016
144
45
Now watch as Indie filmmakers and journalists move away from clunky cinemaEOS type video cameras to mirrorless. The coming Panasonic S1/S1R is just the beginning.
Now that's a mindset stuck in 2008! Because that's what people said about the 5DII. Using non-video specific cameras works for some things for some people some of the time. Nothing new about that, and no new cameras are going to change that landscape at this point.
 
Reactions: Dantana

jayphotoworks

EOS 80D
Aug 11, 2016
168
38
With all talk of doom and gloom, I thought I’d go look to see what is actually happening at Canon. They have not released Q4 2018 yet, so this is based on Q3 estimates for 2018 (meaning these numbers are what Canon gave to shareholders as estimates using 3 quarters of actuals, and one quarter of estimates).

I had no idea what to expect, so this was illuminating for myself. Canon makes just under half of their revenue from Office, and about a quarter from Imaging. Ignoring the fact that imaging includes inkjet printers, we can expect that slice to be greatly reduced over the next two years. However, it will then be close to parity with Medical. However, if you look at profitability, Imaging is nearly twice as profitable as Medical (which was not at all what I had expected).

So if Canon hopes to offset a declining camera market, they can offset this on a dollar by dollar basis if they increase Office sales (roughly equal profit ratio). But if they want to offset it with increased Medical sales, they will need roughly $2 of new medical sales to offset every $1 lost to cameras. This also shows that Canon will still care a great deal about cameras, even at half-size, the market is still large and very profitable. Frankly, they can’t afford to just walk away.

Of course, cameras will have diminishing prestige within the company as they focus on other business units to find growth and this will impact development of new products.

View attachment 182898
In contrast, I was looking at Sony and their imaging division which is only <6% of their overall composition. By operating income, their imaging BU is a fraction of their financial services, music and picture, gaming and semiconductor business. Their semiconductor business (which supplies sensors en masse) to the smartphone industry was probably a good bet given that upcoming flagships in 2019 will utilize up to 4-5 camera modules per device and the top three manufacturers (Samsung, Huawei and Apple in that order) all utilize them. In contrast, Canon and Nikon had to diversify further into industrial sensors and medical as they will get hit considerably harder by this downturn than Sony who doesn't have a quarter of their business in imaging.
 
Reactions: knight427

unfocused

EOS 5D SR
With all talk of doom and gloom, I thought I’d go look to see what is actually happening at Canon. They have not released Q4 2018 yet, so this is based on Q3 estimates for 2018 (meaning these numbers are what Canon gave to shareholders as estimates using 3 quarters of actuals, and one quarter of estimates).

I had no idea what to expect, so this was illuminating for myself. Canon makes just under half of their revenue from Office, and about a quarter from Imaging. Ignoring the fact that imaging includes inkjet printers, we can expect that slice to be greatly reduced over the next two years. However, it will then be close to parity with Medical. However, if you look at profitability, Imaging is nearly twice as profitable as Medical (which was not at all what I had expected).

So if Canon hopes to offset a declining camera market, they can offset this on a dollar by dollar basis if they increase Office sales (roughly equal profit ratio). But if they want to offset it with increased Medical sales, they will need roughly $2 of new medical sales to offset every $1 lost to cameras. This also shows that Canon will still care a great deal about cameras, even at half-size, the market is still large and very profitable. Frankly, they can’t afford to just walk away.

Of course, cameras will have diminishing prestige within the company as they focus on other business units to find growth and this will impact development of new products.
Appreciate your research. A couple of additional points:

Office profits are volatile and closely tied to the economy. During a recession, businesses scale back their office expenditures. They will defer purchases, maybe not renew some equipment leases, etc. While consumers do the same, it's not quite as volatile. That's especially true now with so much of camera sales coming from higher income older enthusiasts. I recall that during the great recession of a decade ago, the office division was really hit hard and Canon used imaging sales to offset some of the losses in office.

I don't think it's any surprise that the medical and industrial profit ratios are smaller. These are emerging technologies where there is heavy investment at the front end. So, while today Canon may need $2 of medical sales to offset every dollar lost in imaging, that may not be the case in the coming years. Investments being made today in that sector could lead to significantly higher profit ratios in the coming years.

But, to your overall point, yeah, Canon is not going to sacrifice a very important component of their revenue stream. There is also the prestige factor as well. There is a reason why Canon buys ads showcasing wildlife and sports photography using their big whites and why they fund "Explorers of Light." Finally, there is a pride factor at play. Canon clawed their way to the top of the pile over about a 50 year span. They are not going to yield that spot willingly.
 

unfocused

EOS 5D SR
In contrast, I was looking at Sony and their imaging division which is only <6% of their overall composition. By operating income, their imaging BU is a fraction of their financial services, music and picture, gaming and semiconductor business. Their semiconductor business (which supplies sensors en masse) to the smartphone industry was probably a good bet given that upcoming flagships in 2019 will utilize up to 4-5 camera modules per device and the top three manufacturers (Samsung, Huawei and Apple in that order) all utilize them. In contrast, Canon and Nikon had to diversify further into industrial sensors and medical as they will get hit considerably harder by this downturn than Sony who doesn't have a quarter of their business in imaging.
Which is something that has always concerned me about Sony. They can shed their camera division without much of an impact on their bottom line. Photography is not a core component of their culture, but simply something they got into to make a few extra bucks. If it goes south on them, I can see them exiting the market without much hesitation.
 

Bentley Boy

I'm New Here
Oct 28, 2017
14
28
I gues that explains the super high prices of the RF lenses. Same profit in a shrinking market.
This is not accurate. The 24-105 and 35 are less expensive than other brand offerings, and the other two lenses are the only one's of their kind and warrant the high prices. Yes there's an EF 50 1.2, but it's no match for the RF version. Prices will fall as well. As a business, you price high with the expectation of lowering to make the most profit you can and satisfy your investors.
 
Reactions: ethanz

crazyrunner33

EOS RP
Nov 4, 2011
249
76
Which is something that has always concerned me about Sony. They can shed their camera division without much of an impact on their bottom line. Photography is not a core component of their culture, but simply something they got into to make a few extra bucks. If it goes south on them, I can see them exiting the market without much hesitation.
That's pretty much defines the latest Olympus camera. The career page tells the story for Olympus, they're booming, but not because of photography.
 
Reactions: knight427

knight427

EOS T7i
Aug 27, 2018
86
98
In contrast, I was looking at Sony and their imaging division which is only <6% of their overall composition. By operating income, their imaging BU is a fraction of their financial services, music and picture, gaming and semiconductor business. Their semiconductor business (which supplies sensors en masse) to the smartphone industry was probably a good bet given that upcoming flagships in 2019 will utilize up to 4-5 camera modules per device and the top three manufacturers (Samsung, Huawei and Apple in that order) all utilize them. In contrast, Canon and Nikon had to diversify further into industrial sensors and medical as they will get hit considerably harder by this downturn than Sony who doesn't have a quarter of their business in imaging.
Thanks for saving me the time! This could cut both ways for Sony system owners. As you point out, Sony made a smart play into sensors so cameras can really just come along for the ride. So long as Sony sees value in being known as a camera company, this will allow them to continue spending money on R&D. However, someone else mentioned how Sony can be fickle, this is also a risk as Sony might decide they have the mobile sensor market all snatched up and supporting a camera system just doesn’t have much upside. It’s much easier for Sony to walk away from their camera business than for Canon. But it’s also easier for Sony to use cameras as a loss leader if it brings in more business for sensors.

But that cuts both ways for Canon too. If the market contracts much faster than predicted, they could end up facing a cash crunch requiring drastic measures (which is the only scenario I see Canon exiting the camera business).

OK, I'm done playing armchair economist.
 

takesome1

EOS 5Ds R II
Aug 23, 2013
1,474
101
R&D dollars will follow. Advancements will slow.

The question is, how will CR fair. Since it is a rumor site and it takes longer between camera advancements will it be a boom or a bust?

There was a digital boom with DSLR's last decade, it has been a steady decline. Look at the traffic in TDP's forum over the last 10 years. Will the same thing happen here?

Who will be here at the end to turn off the lights when it is over? If there is a pool I am taking Neuro.