Canon 1st Quarter 2024 Financials

[roby17269]

Remember during COVID when new cars were in short supply and the usual dealer discounts were not happening? Even though auto sales declined in terms of unit volume, auto dealer and manufacturer profits saw huge gains.

Huge gains per unit sold, sure, whether that meant huge gains in absolute terms I do not know. Plenty of redundancies in those times too.

Companies care about the bottom line more than the top line. If a lens is in short supply, the most likely reason is not that Canon cannot make enough of them, it's that they're choosing not to. Have you noticed that none of the consumer-level (low margin) lenses seem to be in short supply?

I am just speculating but I kind of assume that L lenses and non L lenses come out of different assembly lines and that making their glass elements may be split as well? Moreover, there is also a small risk of losing some sales if you make clients wait for months or even years.
It seems obvious to me that, in any case, had they delivered more L lenses units during 23Q4 - 24Q1 they would have sold more... and at the same price.

Disclaimer: what I write are my opinions only - I am not privy to Canon's insider info on this (or any other) matter

 

[H2Oplanet]

Don’t think so, judging from previous releases it will be an early Q3 thing. The last announcement (24-105Z) was on Nov 2nd, but the lens only shipped almost 6 weeks later on Dec 13.

Remember during COVID when new cars were in short supply and the usual dealer discounts were not happening? Even though auto sales declined in terms of unit volume, auto dealer and manufacturer profits saw huge gains.

Companies care about the bottom line more than the top line. If a lens is in short supply, the most likely reason is not that Canon cannot make enough of them, it's that they're choosing not to. Have you noticed that none of the consumer-level (low margin) lenses seem to be in short supply?

So you actually think Canon management is choosing not to meet demand for high margin products and doing so to boost their "bottom line"? I think that is delusional and that they have a supply problem for many/most of their high-end product line.

Do you also think Ford was/is choosing to not make Broncos despite the incredible demand? If so, it is/was a huge gaffe because the fever has cooled and the frenzy that accompanied introductory announcements has largely evaporated!

Unrealistic to think that Canon could ever be Apple Inc. and deliver product a week after announcing (certainly an apple to "Canon oranges" industry comparison); however, Canon could improve sluggish supply issues and also keep buyers better informed on when product will actually be available.

 

[frankchn]

There are people on lists, with payment information, wanting to give Canon full MSRP in exchange for a lens today. The chance for Canon to avoid discounting lenses is here right now. The longer Canon keeps them waiting, the more people on those lists will drop out.

I don't think Canon will underproduce or hold product out deliberately in exchange for maybe avoiding a discount on some lenses until Year 4 instead of Year 3, instead of selling them for full MSRP now.

 

[John Wilde]

Companies care about the bottom line more than the top line. If a lens is in short supply, the most likely reason is not that Canon cannot make enough of them, it's that they're choosing not to. Have you noticed that none of the consumer-level (low margin) lenses seem to be in short supply?

An alternate explanation is that low-end lens production is more automated, and high-end lens production requires more hands-on labor.

 

[EOS 4 Life]

Even the M100 had a touchscreen. The R100 doesn't.

The R100 is a 100D replacement, not an M100 replacement.

 

[EOS 4 Life]

Selling $1M worth of kit lenses might net Canon $100k in operating margin, but selling $1M worth of 200-800s might well double that.

Sure, if those are the exact numbers but they usually sell far more of the high-volume ones.

 

[EOS 4 Life]

Announcements do not boost sales, delivery is the issue.

A lot of people preorder and do not cancel later.

 

[EOS 4 Life]

There are people on lists, with payment information, wanting to give Canon full MSRP in exchange for a lens today. The chance for Canon to avoid discounting lenses is here right now. The longer Canon keeps them waiting, the more people on those lists will drop out.

I don't think Canon will underproduce or hold product out deliberately in exchange for maybe avoiding a discount on some lenses until Year 4 instead of Year 3, instead of selling them for full MSRP now.

MSRP is for stores it only matters to Canon when we buy directly from them.
We don't know what the markup is.
MSRP - markup is what Canon makes.

 

[koenkooi]

The R100 is a 100D replacement, not an M100 replacement.

But the 100D had better specs than other bodies, it ticked all the boxes for me when I wanted something smaller than my 7D, but with faster AF than my M.
The 100D was a lot of camera for its size and price.

And it had a touchscreen

 

[EOS 4 Life]

Moreover, there is also a small risk of losing some sales if you make clients wait for months or even years.

I don't think that is a small risk.

 

[frankchn]

Sure, if those are the exact numbers but they usually sell far more of the high-volume ones.

It would really have to be an order of magnitude more for the dollar impact on profit to be similar. Take two lenses that were announced together: RF-S 10-18 and the 200-800.

RF-S 10-18: MSRP $329
RF 200-800: MSRP $1899

For the same impact on revenue, Canon would have to sell almost 6x more 10-18s. I imagine for the same impact on profit (given that Canon should have much better margins on the 200-800), I would not be surprised if it is 15-20x more. Given that Canon is bundling the 10-18 into the Video Creator Package that was recently released, the margins are likely compressed further. I don't think Canon is selling 20x 10-18s compared to 200-800s.

MSRP is for stores it only matters to Canon when we buy directly from them.
We don't know what the markup is.
MSRP - markup is what Canon makes.

Regardless, the point stands. People are lining up to pay full price for the lens today, and it would be silly for everyone involved from Canon HQ to Canon USA to the retailers not to actually take their money ASAP, but to hold out hope for maybe the ability to delay discounts by a few months or a year sometime in the future.

 

[koenkooi]

An alternate explanation is that low-end lens production is more automated, and high-end lens production requires more hands-on labor.

10-15 years ago it was ‘common knowledge’ in the interwebs that the bottleneck was growing the fluorite crystals.
I don’t know if that was actually the case, but people liked to say it

Anyway, I hope the gap between announcement and shipping is ‘days’, not ‘weeks’ or ‘months’ and that the first batch is large enough to cover my pre-order

 

[roby17269]

I don't think that is a small risk.

so you agree with me? I am asking because I am not sure given your other posts

 

[frankchn]

10-15 years ago it was ‘common knowledge’ in the interwebs that the bottleneck was growing the fluorite crystals.
I don’t know if that was actually the case, but people liked to say it

Anyway, I hope the gap between announcement and shipping is ‘days’, not ‘weeks’ or ‘months’ and that the first batch is large enough to cover my pre-order

I personally think "weeks" is not unreasonable, especially if they want to avoid lots of leaks (e.g. Leica SL3, which was comprehensively leaked before the official announcement), but just hope that the initial shipments are large.

 

[neuroanatomist]

It seems more likely to me that the higher end lenses are more complicated and require higher precision manufacturing, and it is just more difficult to manufacture. To me, Canon would like to manufacture and sell more higher end stuff, but they just can't given current resources.

The 200-800 is not an L-series lens, contains no exotic elements and is similar to (but simpler than) the 100-500L.



The 100-500L was hard to come by initially (as all the higher end lenses have been) and is now readily stocked, the 200-800 should be no more difficult to produce yet it is scarce...and recently released. Why should the 200-800 be so difficult to produce?

 

[frankchn]

The 100-500L was hard to come by initially (as all the higher end lenses have been) and is now readily stocked, the 200-800 should be no more difficult to produce yet it is scarce...and recently released. Why should the 200-800 be so difficult to produce?

Lots of possible reasons: high initial QC reject rate than anticipated, tighter tolerances required for a specific part, accidentally underestimated demand and didn't make enough. Doesn't have to be a deliberate move to restrict production or distribution.

 

[roby17269]

The 200-800 is not an L-series lens, contains no exotic elements and is similar to (but simpler than) the 100-500L.

View attachment 216187

The 100-500L was hard to come by initially (as all the higher end lenses have been) and is now readily stocked, the 200-800 should be no more difficult to produce yet it is scarce...and recently released. Why should the 200-800 be so difficult to produce?

hmmm... maybe it could be as simple as there's a lot more demand for a newer. cheaper lens (200-800) right now, while the 100-500 has been around long enough that most people who wanted have it by now?

 

[neuroanatomist]

Lots of possible reasons: high initial QC reject rate than anticipated, tighter tolerances required for a specific part, accidentally underestimated demand and didn't make enough. Doesn't have to be a deliberate move to restrict production or distribution.

Doesn't have to be, no. But it seems to stretch the bounds of coincidence that Canon has somehow screwed something up with every single high-end RF lens for the past several years. All of them have been in short supply at first, and after a year or so have been readily available. One or two lenses I can understand. But all of them? Given the two options, a strategy or a series of blunders for lens after lens, I lean toward believing the former.

 

[frankchn]

Doesn't have to be, no. But it seems to stretch the bounds of coincidence that Canon has somehow screwed something up with every single high-end RF lens for the past several years. All of them have been in short supply at first, and after a year or so have been readily available. One or two lenses I can understand. But all of them? Given the two options, a strategy or a series of blunders for lens after lens, I lean toward believing the former.

Maybe, but the strategy itself seems faulty. Why would Canon let people willing to pay full price for lenses languish on waiting lists when they can take their money now and guarantee a full priced sale?

It could be that Canon just have worse supply chain problems involving higher end components than other manufacturers. We saw the same thing in the auto industry during COVID, some manufacturers weathered supply chain issues better than others.

For instance, Canon gets a lot of their optical glass from Ohara (because Canon owns 20% of their stock), and maybe Ohara has supply issues for the optical glass Canon needs.

 

[neuroanatomist]

hmmm... maybe it could be as simple as there's a lot more demand for a newer. cheaper lens (200-800) right now, while the 100-500 has been around long enough that most people who wanted have it by now?

The point is, if they can produce the 100-500 in quantity they can also produce the 200-800 in quantity. But they're not. As I just stated, maybe they screwed up on demand estimates or production for the 200-800. But did they really also screw up something with launches of the 135/1.8, 24-105/2.8, 100-300/2.8, 400/2.8, 600/4, 100-500L, 100/2.8, 14-35/4, 70-200/2.8, etc., etc.. And yet, they perfectly managed production to meet the much higher (numerical) demand for all of the RF-S lenses, the 28/2.8, 100-400, 15-30, 24-50, etc.?

Every high end launch was an unplanned failure to meet demand, but every consumer launch (including the 28/2.8 which was the only consumer lens that actually showed up on the delay list) went off without a hitch with ample supply? If you believe that, every coin you flip must land on tails.