Canon Can't Even Make a Billion Dollars Anymore

[Mt Spokane Photography]

Nikon dipped 78% in total revenue? or SLR/camera related?

Sorry, I quoted the Sony figure, Nikon Profit was down 48.6%, Sony did not report a drop in profit by %, just in sales.
Virtually all of the drop was in imaging products, but then, thats most of their business. This was for the quarter ending june 30, a new report is expected soon. expect worse figures.
http://www.nikon.com/about/ir/ir_library/result/index.htm

 

[ablearcher]

I rather think the situation is slightly more complex...

I never said that pricing of 5DMKIII was the only contributing factor. This is simply one of the most obvious ones in terms of dslr market.

 

[Chosenbydestiny]

I think this year's tsunami crisis in Japan and the fact it heavily impacted r&d and production might have helped with these companies' losses...

 

[Daniel Flather]

This is good, a hungry dogs forgets he has fleas.

 

[keithfullermusic]

everyone thinks that they are a business expert all of a sudden now that these numbers came out.

one of the biggest problems is that Canon is based in a country whose currency is rising compared to the markets where they sell products. that means that even if they sold the exact same amount of everything, and spent the exact same amount they would still pull in less revenue and less profit. on top of that, the world economy is down which means less disposable for most consumers and less business to business sales. together, that equals less sales. to top it all off, smartphones are completely eating up the point and shoot market.

people - canon is not taking huge hits because you think the new 5d cost too much. its not because you think the 24-70 costs too much. these prices are very equal to what their predecessors were in terms of japanese currency - but now the rest of the world's is worth less compared to what it was, so things cost more. also, canon sells a lot more than just 5Diii's and 24-70 ii's...

 

[ablearcher]

..too high a price (in your opinion)

In just my opinion? Seriously? With all the price fluctuations up to $750 (and even more if you consider Canadian prices) in just a few months after the release? With D800 $3K price at release? Any idea why there are no similar price drops on D800?

So $3800 Canadian or even $3500 US pricing was reasonable in your opinion?

Neuro, I respect your posts on this forum and your knowledge, but I struggle to understand you on this one.

 

[rambarra]

everyone thinks that they are a business expert all of a sudden now that these numbers came out.

one of the biggest problems is that Canon is based in a country whose currency is rising compared to the markets where they sell products. that means that even if they sold the exact same amount of everything, and spent the exact same amount they would still pull in less revenue and less profit. on top of that, the world economy is down which means less disposable for most consumers and less business to business sales. together, that equals less sales. to top it all off, smartphones are completely eating up the point and shoot market.

people - canon is not taking huge hits because you think the new 5d cost too much. its not because you think the 24-70 costs too much. these prices are very equal to what their predecessors were in terms of japanese currency - but now the rest of the world's is worth less compared to what it was, so things cost more. also, canon sells a lot more than just 5Diii's and 24-70 ii's...

this

 

[marekjoz]

So... nobody's switching to Nikon because of that?

 

[Nishi Drew]

I think this year's tsunami crisis in Japan and the fact it heavily impacted r&d and production might have helped with these companies' losses...

You realize the tsunami (earthwuake + nuclear disaster) was well over a year ago right? It did do harm but when so much is made in China/Taiwan no real hits were taken.

 

[trowski]

Another thing to remember is that cameras don't even account for 50% of Canon's revenue. They actually make more money from printers. Therefore I don't think any slightly reduced sales of the 5DIII or 24-70mm II due to price would significantly reduce their overall revenue or profit. Compared to the line of Rebels, the 5DIII and 1DX are low-volume products. Part of the reason for the very high prices on things like the 5DIII, 1DX, and line of super-telephotos is to make up for low-volume.

I would also say the slow in sales of point-and-shoot cameras has a lot to do with the improvement of smartphone cameras. While I'm sure the economy is playing a role in decreased sales, basic point-and-shoot cameras are largely on their way out.

Plus there's the whole yen vs. dollar issue, which certainly doesn't help them keep prices low in the U.S. and other places to help increase sales.

 

[DB]

...maybe they will start refreshing the entire product line just about soon, like next January?

In general, reduced revenue means cuts...and often, R&D is one of the first cuts to be made. Sad, but true.

+1 Canon set their R&D budget 'top-down' (as a % of net sales) and not 'bottom-up' (what they need to spend for new products), so expect to see some possible trimming of the R&D allocation

 

[marekjoz]

...maybe they will start refreshing the entire product line just about soon, like next January?

In general, reduced revenue means cuts...and often, R&D is one of the first cuts to be made. Sad, but true.

+1 Canon set their R&D budget 'top-down' (as a % of net sales) and not 'bottom-up' (what they need to spend for new products), so expect to see some possible trimming of the R&D allocation

Hopefully it could push them to send to market stuff they have ready on their shelves in R&D department.

 

[cbphoto]

"Demand for interchangeable-lens digital cameras continued to realize robust growth in all regions while the market for compact digital cameras shrunk due to the stagnation of the global economy."

Sales of compact digital cameras will continue to shrink because of cell phone cameras & apps.

I've owned three Canon point & shoot cameras, but will probably never buy another one. For fun & easy, I use my cell phone and a couple apps to shoot, enhance and upload for family & friends to see. The last thing I want to do on vacation is saddle myself to a computer for post production on point & shoot images. To me, it's a no-brainer.

An image taken on vacation & uploaded within minutes after capture. And minutes before a nice swim!

 

[atompate]

Sure the high end products price point has been raised and people are pissed but I think its more then that. I see a huge problem for canon nikon etc.. is loosing the point and shoot market. Average Joe's are slowly using their smartphones now and dont even buy film or P&S anymore. The company's are probably trying to make revenue like years in the past so they raise DSLR and high end products prices.

 

[DB]

Canon do not tell us how they allocate the R&D budget, but what we do know is that it has fallen as % of net sales from 11.5% to 8.5% over the last 3-4 years, but whether or not Consumer Division saw bigger cuts, whilst Industrial Division experienced rises in R&D spend, we do not know.

Canon still outspends Nikon - in % terms (again we do not know if this is also true on DSLR's , just as a company)

 

[jrista]

I rather think the situation is slightly more complex...

I never said that pricing of 5DMKIII was the only contributing factor. This is simply one of the most obvious ones in terms of dslr market.

You do realize that the sales of the 5D III have been stellar DESPITE the price, right? That seems to indicate to me that the market can certainly bear the $3500 price tag, and that people are eager to buy that particular camera.

 

[DB]

...maybe they will start refreshing the entire product line just about soon, like next January?

In general, reduced revenue means cuts...and often, R&D is one of the first cuts to be made. Sad, but true.

+1 Canon set their R&D budget 'top-down' (as a % of net sales) and not 'bottom-up' (what they need to spend for new products), so expect to see some possible trimming of the R&D allocation

Hopefully it could push them to send to market stuff they have ready on their shelves in R&D department.

Excellent point. They don't call Consumer Electronics the 'FMCG Sector' (fast moving consumer goods) for nothing -> get new products out the door quicker, then the faster they sell...the more revenue that allows for more R&D spend on new improved products and so on. I guess this is why Apple Inc. constantly update their product lines e.g. iPad4 announced just months after iPad3

 

[mws]

I should have bought that calculator mouse!

 

[Darkmatter]

Won't printer sales continue to drop until it's at the point where most sales will just be to other companies? I don't have a really up to date printer because I hardly ever use it but hasn't the tech already gotten to the point almost where most consumer printers can do most everything a regular person will want of it? There doesn't seem to have been any real major jump in printer tech in quite a long time already. I can't see that problem getting any better as time goes on.

 

[neuroanatomist]

Any idea why there are no similar price drops on D800?

So $3800 Canadian or even $3500 US pricing was reasonable in your opinion?

Neuro, I respect your posts on this forum and your knowledge, but I struggle to understand you on this one.

Probably because no one had the D800 in stock, and low supply means high demand which means no market drive for a lower price.

I thought $3500 was not unreasonable. The IQ of a 5DII (already excellent) coupled with the AF system of a camera costing >$3K more, plus 6 fps shooting speed? That's a powerful combination. If I had any interest in purchasing a 5DIII, would I want it to be cheaper? Of course. But if I had been interested in purchasing a 5DIII, the $3500 price would not have affected my decision. Amortized over a 3 year life of the camera, $500 becomes something like 46¢ per day. My morning coffee cost 10 times that. Just sayin'.

In general, reduced revenue means cuts...and often, R&D is one of the first cuts to be made. Sad, but true.

well a malicious guy could say: i have not seen much sensor development in the past 4 years.... so what?

Are you that guy? Wasting no time in slipping back to old ways, it seems... Please do try to properly attribute your quotes, though. FWIW, I am not referring specifically to Canon or the dSLR industry here, but more generally to companies with R&D spending across the board.