Canon Profits Drop 16% in Second Quarter

[Canon Rumors Guy]

FROM REUTERS:</p>
<p>Japan’s Canon Inc cut its earnings outlook for the full year and reported a 16 percent fall in quarterly profit as consumers, increasingly in the habit of taking photos with their smartphones, bought fewer compact digital cameras.</p>
<p>The world’s largest camera maker said on Monday its second-quarter net profit fell to 68 billion yen ($552 million) compared with 81 billion yen a year earlier. Analysts on average expected 65 billion yen, according to Thomson Reuters data.</p>
<p><a href="http://uk.reuters.com/article/2015/07/27/us-canon-results-idUKKCN0Q10FD20150727" target="_blank">Read more at Reuters</a></p>

 

[neuroanatomist]

Clearly, consumers are dissatisfied with the low ISO DR offered by Canon's sensors and disillusioned about the prospects of Canon improving that low ISO DR, so they're turning to smartphone cameras in their quest for better IQ.

 

[Valvebounce]

Hi Neuro.
One has to assume suppose that these phones are now using FF Sony sensors? ;D

Cheers, Graham.

Clearly, consumers are dissatisfied with the low ISO DR offered by Canon's sensors and disillusioned about the prospects of Canon improving that low ISO DR, so they're turning to smartphone cameras in their quest for better IQ.

 

[pdirestajr]

There are billboards all over NYC that say "Shot with an iPhone 6". Not sure why anyone needs anything else!

 

[AcutancePhotography]

There are billboards all over NYC that say "Shot with an iPhone 6". Not sure why anyone needs anything else!

For most people, that's all they do need (not necessarily an iphone though)

A camera is a tool. If a lower cost, easier to carry, easier to use tool does the job needed, why would anyone use anything else? If it does not do the job needed, than a different tool is needed.

 

[Greenmeenie]

I'm sure ALL the big camera manufacturers are dealing with the impact of smartphones. That ship has sailed. Canon needs to worry about Sony. I know dozens of photogs who have jumped ship from Canon & Nikon to Sony because they like what Sony is doing in the FF Mirrorless department and are disgusted by Canon & Nikon dragging their feet.

Seriously. They need to step up their game. All camera manufacturers got caught sleeping with the smartphone threat. But the writings on the wall with Sony. If Canon & Nikon don't change their smug attitude, they're gonna keep losing $$.

 

[neuroanatomist]

Seriously. They need to step up their game. All camera manufacturers got caught sleeping with the smartphone threat. But the writings on the wall with Sony. If Canon & Nikon don't change their smug attitude, they're gonna keep losing $$.

I'm sure Canon and Nikon will still be making cameras in a few years, I wonder if that's true for Sony.

 

[arthurbikemad]

An iPhone pmsl....lol

You work for Crapple?



Swap my 5D3 for an iPhone... err, no....lol

An HTC M9 maybe

On a real note, so sales are down a tad, and that's with my years spend.. sounds like they need some Tesco's management, then the sales would be up 150%

 

[JohanCruyff]

"Despite firm sales in Japan, interchangeable-lens digital cameras continued to face severe conditions in other regions while sales volume for digital compact cameras decreased in most regions compared with the same period of the previous year," Canon said in a statement.It also said the weak yen was inflating operating costs.

1) Compact cameras are certainly dying: maybe Canon (plus Sony and Nikon) can replace this dying market with their 1 Inch "premium" models. Less units sold, higher margins (maybe).
BTW, I just ordered a Fuji XP-80 compact because I needed a minimalistic waterproof camera for my vacations.
To sum it up: I think "market niches" will survive, whereas general purpose compact cameras will disappear.

2) When I was young, my teachers used to tell me that an inflated yen would help Canon profits. Can I sue them for mis-teaching? :

 

[Sabaki]

Canon for now remain the market leader but they no longer lead in the innovation stakes.

What they need to do isn't a major mystery but let's wait and see what happens over the new 3-5 years.

Perhaps P&S cameras will be replaced by the Rebel line, full frame becomes second tier and a larger format camera becomes the new top-of-the-line formay

 

[Mt Spokane Photography]

When a market shifts, it often shifts faster than the finance types believe. Canon announced a shift about two years ago to premium compact cameras with larger sensors. But, will buyers pay up to $1000, or in the case of sony $1300 for a point and shoot. I don't think so.

 

[Nitroman]

Maybe they should try lowering their prices ...

 

[Mt Spokane Photography]

Maybe they should try lowering their prices ...

They were giving away the entry level P&S cameras in the refurb store, some were $49. Obviously, with Canon's cost structure, they lost a lot of $$ disposing of cameras that no one wants.

That's why they dropped out of the entry level P&S market. I expect to see only a few new models go for less that $400 or $500. They have continued to make a few lower priced models, but sales are dropping fast.

When you are already churning out a million cameras a year, you cannot afford to keep losing money on each one while hoping that sales pick up. Canon is smarter than that, they do know how to make money, but that does not keep profits from dropping as sales fall. They believe that higher end and more capable P&S cameras will sell, but I'm doubting that. I have a G1 X II and, while I like it, it does not hold a candle to my 5D MK III in so many ways.

 

[retroreflection]

We could be living in a golden age of photography.
Some golden ages are preceded by silver and followed by a tasteful return to a variety of materials each employed to their sustainable best.
Other golden ages are followed by pestilence, war, and depraved impoverishment.

Photography's silver halide age has been severely beaten down by the economics of markets lost to silicon (my materials analogy is breaking up). Bankruptcy of Kodak - unthinkable in the 80's, now it makes perfect sense.

Mobile devices are chipping away at the old camera market. As the demand for old style interchangeable lens cameras drops, the sustainability of the manufacturers also drops. I hope that the manufacturers of the systems in which I have lens investments can survive. Considering that, I think Canon should continue on its conservative path while pursuing other profitable ventures. Sony should drop the manufacture of cameras (and TVs, PCs, gaming systems, etc.) and concentrate only on sensors.
If the market drops too much, we could very well be faced with full frame cameras that have to be priced at current MF levels just to cover the development and manufacturing of niche products.

 

[sanj]

Seriously. They need to step up their game. All camera manufacturers got caught sleeping with the smartphone threat. But the writings on the wall with Sony. If Canon & Nikon don't change their smug attitude, they're gonna keep losing $$.

I'm sure Canon and Nikon will still be making cameras in a few years, I wonder if that's true for Sony.

I hope and wish all three keep making cameras. Going by current trends Sony is pushing it which helps all of us. Fuji should continue too. Iphone camera should keep getting better.

 

[jrista]

Clearly, consumers are dissatisfied with the low ISO DR offered by Canon's sensors and disillusioned about the prospects of Canon improving that low ISO DR, so they're turning to smartphone cameras in their quest for better IQ.

Nice, start the DR debate right out the gate. -.- For a guy who proposes to hate it...you do tend to bring it up at every opportunity...

The article discussed the drop in compact sales, which has nothing to do with IQ and everything to do with the ubiquity of smartphones. Most consumers lack a real interest in IQ, and have intense interest in Polaroid-esque instagrammification.

 

[Joe M]

I guess for those who don't want to use their phone, a pocket-able P&S will always be handy. I seriously doubt Canon can continue to make money at it anymore. As far as SLRs go, I wonder if Canon realizes that most country's economies are still rather soft. Even from a business point of view, I will have to think long and hard before I upgrade my pair of 5D3s to the 5D4 unless they provide something mindblowing that will actually generate income the 5D3 can't. I think all camera manufacturers have to realize from here on out it's going to be a tough sell to most consumers as the digital camera has peaked for the most part. Except for those who really need the incremental improvements, I don't know anyone personally that's looking to buy a new camera.

 

[roguewave]

Clearly, consumers are dissatisfied with the low ISO DR offered by Canon's sensors and disillusioned about the prospects of Canon improving that low ISO DR, so they're turning to smartphone cameras in their quest for better IQ.

Funny, coming from exactly the person who likes to quote sales numbers as proof of Canon's product superiority. So yeah, by your own logic, smartphone cameras eating away Canon's market share means they must be better .

 

[neuroanatomist]

The article discussed the drop in compact sales, which has nothing to do with IQ and everything to do with the ubiquity of smartphones.

The article also discussed ILCs.

Despite firm sales in Japan, interchangeable-lens digital cameras continued to face severe conditions in other regions...

[Funny, coming from exactly the person who likes to quote sales numbers as proof of Canon's product superiority. So yeah, by your own logic, smartphone cameras eating away Canon's market share means they must be better .

Exactly. Smartphone cameras best meet the needs of far more people than dSLRs. Do you disagree?

 

[AdjustedInCamera]

Perhaps P&S cameras will be replaced by the Rebel line, full frame becomes second tier and a larger format camera becomes the new top-of-the-line formay

+1 this makes sense to me. An advantage Canon's low end cameras should have over iphones is physical space for the sensor, they should aim to exploit that as fully as possible.

In my view the biggest problem Canon has (and the dedicated camera industry generally) is that they are not correctly targeting the consumer maket with their higher-end cameras. The view seems to be that the 'professionals' have all the money so the higher-end stuff is aimed at them with cut-down versions available for everyone else.

In reality I suspect that this results in lost sales as the average consumer finds that the Canon offering doesn't fit well into the wider consumer electronics eco-system, e.g. they are expected to pay extra for GPS & WiFi, their television can show 4k but their Canon camera can't capture it. This is before you look at the fact we have ML trying to fix the gap between what people expect these days in terms of software functionality, functionality by-the-way that would be really useful to someone transitioning from iPhone/PNS to a dedicated camera.

I think canon should:
- Integrate with the iPhone fully. Find some way to get iPhone apps to run inside the camera. This would help transition users and provide an open software platform for features and tutorials. It would also help address the hopeless UI that Canon's camera have. Yes, I know the camera ergonomics are good, but the software UI could have come straight out of the mainframe switch interface of the 1960s.
- There needs to be a clear range of cameras aimed at non-pros. Differentation should be easy as it seems every consumer features makes pros ill anyway swivel screen, picture mode icons on the mode switch, SD cards, etc. This range will not be driven by what people need (only pros need a camera) but by what people want, can have, and expect from the wider consumer electronics eco-system given that they are spending serious money on a dedicated device.

This may result in some non-pro cameras costing more than the 5Ds. I look at the sales of BMWs, etc. at the moment and believe there's a market there. Having said that I could just be talking about myself