Canon Profits Drop 16% in Second Quarter

[jonathan7007]

Tugela,
Some pros are trying out Sony bodies for their work. Some high-end amateurs are buying kits. But do you have any knowledge that there are big enough sales to satisfy a corporate bean-counter who does not care about a company's long-time tradition in the photo market? (Canon may have the older brother of the same bean-counter...)

I agree that Samsung may inherit their place. It depends, for these entrants, on their willingness to suck up losses in the first, what, 2 years? 5 years? 10 years?

Sony told the world recently they were NOT making enough to continue. You can look it up. Maybe a fib to [temporarily]help the stock but probably not. They had stuff in the pipeline and must have decided there is some upside to releasing it. I have no knowledge that they would exit at a dead run but they have said they will exit.

BTW, Nikon and Canon do NOT exhibit the same corporate/business unit breadth: Nikon is way more driven by camera sales revenue than Canon, who DOES have a lot of other businesses. Fuji seems to have parallels to Canon. They are said to be subsidizing their high-end photo gear with the other pieces.

I am glad I didn't buy a Sony A7-whatever, although I considered trying it out. I figured it needed some maturation, and many must have thought the same way.

 

[keithfullermusic]

canon is going to turn things around by raising the price on all their lenses by about 200%

 

[Loswr]

That is because no one was buying their laptops. That isn't the case with their cameras.

You seem to be forgetting that their camera line up is driven by technology largely being developed on the backs of the cell phone market.

Ahhh, so that explains why Sony themselves predicted their own camera sales will drop 50% by FY17. Thanks for clarifying.

So, Canon is doing better than the broader market and doing better than analysts predicted. And, let's not forget the bottom line: this is an announcement of smaller profits not an announcement of any loss.

It looks to me that Canon knows the market better and has better strategies than anyone on this forum.

Some people on this forum have the business acumen of a bowling ball.

 

[gregory4000]

Cell phones is the cause for the drop of 16%.
It's simple. It's a matter of contentment.
Most everyone except the professional shooter or the few that care about a better photo.
the mass majority are content with the image their cell phone gives and this technology will only continue to improve and narrow the gap with better cameras. Remember, the camera is free on the phone and shoots very well for the most easy to carry camera to can carry at all times.
I was at a festival where almost everyone was shooting pics and videos. Out of the 200 people taking memory with their cameras, only myself and another shooter were holding something other than a cell phone.

 

[Haydn1971]

I seriously doubt performance in DSLR and Lens sales has had much influence on the 16% drop. A quick look at Wikipedia directs to a 2011 report stating that over 50% of revenues comes via business streams related to copiers, printing, scanners and presumably inks, over 35% from consumer products, including broadcast, industry, camcorders, cameras and lenses, and just over 10% from office/business type equipment like EPOS, computers, tracking, calculators etc. I'd imagine a fair wedge would be via patant licensing too. Given the huge portion of the business is linked to copiers, printers and inks, there's a fair guess that the general global slowdown hitting business will be primarily behind the 16% drop.

 

[LonelyBoy]

It could have enough appeal to be profitable for DxO.

The come on with the camera is a hardware connectivity with smartphones for direct Internet sharing.

Canon's so conservative with their products they missed the boat with it by dragging their feet with stupid easy connectivity with smartphones.

RX100iv is $1,000. More coin that casual photogs would spring for.

We on CR do not think it is much as we are used to buying 1DX, 5Ds, 7D2 and the like.

How much point is there to a $200 compact over a smartphone, though? I just don't see the point. And I did say "or the RX100iv"; the LX100 is cheaper than that. And there are other options; I just can't remember them off the top of my head, since I'm not in the market. I don't think I've actually seen anyone with a compact in the last year or two. Everyone I see shooting is either using their phone or a DSLR.

 

[emko]

Sony is in a good position making the best sensors even if their camera sales slow down because of phones they still make profits from the sensor sales to the phone manufactures. They cant even keep up with phone sensor demands this is the reason they get to push the sensor tech so far. What was it like somewhere around 50% of the demand form Chinese phone manufactures they cant supply.

If only Canon did this early on we would of had better sensors in our DSLRS phones push technology the most right now since they spend so much R&D you can see every advancement from Sony sensors start off on a phone sensor.

I don't know what Canon will do but at this rate their market will go to Sony and phones i guess Canon still have their printers and calculators.

 

[dolina]

It could have enough appeal to be profitable for DxO.

The come on with the camera is a hardware connectivity with smartphones for direct Internet sharing.

Canon's so conservative with their products they missed the boat with it by dragging their feet with stupid easy connectivity with smartphones.

RX100iv is $1,000. More coin that casual photogs would spring for.

We on CR do not think it is much as we are used to buying 1DX, 5Ds, 7D2 and the like.

How much point is there to a $200 compact over a smartphone, though? I just don't see the point. And I did say "or the RX100iv"; the LX100 is cheaper than that. And there are other options; I just can't remember them off the top of my head, since I'm not in the market. I don't think I've actually seen anyone with a compact in the last year or two. Everyone I see shooting is either using their phone or a DSLR.

LX100 is about $200 less but still a lot of coin for someone who use their camera for selfies, photos of food, cats, dogs and group photos.

When you see DSLRs in the hands of casual photogs what model do they tend to use and from what year was it introduced to the market?

 

[9VIII]

For the health of the consumer camera industry I think they should ditch all sensor sizes but APS-C and full frame. People can tell, a FF image looks different and usually better than smaller sensors.
Canon should make APS-C standard across all point and shoot bodies, and market the 80D as the ultimate consumer level step-up body, giving people full frame for under $1K.
Make the 80D the videographer's body with DPAF, and keep everything above it photo-centric with much better phase detect AF.

 

[dolina]

For the health of the consumer camera industry I think they should ditch all sensor sizes but APS-C and full frame. People can tell, a FF image looks different and usually better than smaller sensors.
Canon should make APS-C standard across all point and shoot bodies, and market the 80D as the ultimate consumer level step-up body, giving people full frame for under $1K.
Make the 80D the videographer's body with DPAF, and keep everything above it photo-centric with much better phase detect AF.

That's the industry's direction as a whole.

 

[steliosk]

If Canon targets at smartphone users, lowering the prices might be a good start.
Overpricing is not.

 

[Loswr]

Canon needs a new business model. They should start charging for their Image Gateway, then subsidize camera purchases with a signed 2-year subscription contract.

;D

 

[Hector1970]

Looks like a tough business environment for Canon.
The photo industry is probably a victim of it's own success.
Technology has moved so fast that camera's are capable of taking great photos.
The improvements are very marginal and not perceptible to non-photo geeks.
We'll only find out in retrospect whether this is a key moment in time for Canon and Nikon.
As time goes by they could possibly end up merging.
Sony will be interesting too.
With the accounting scandals at Toshiba and previously at Olympus a scandal at Canon , Nikon or Sony could finish them off.
Sony's survival in t he photo business is probably dependent on the overall health of the business.
If they are going well then the could bleed Canon and Nikon dry. They seems to be delivering the biggest advancements in sensor technology but can't as yet match Canon or Nikon lens.
A Sony / Canon merger may make sense someday.

 

[that1guyy]

Maybe they should offer products that are more exciting and enticing to customers instead of just boring. Glad to see their profits drop. Maybe once they are facing a deficit will they actually start to do something to reinvigorate their camera division.

 

[Diltiazem]

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.

You bring up an important point to the equation: most cameras are already pretty good in what they are supposed to do with excellent IQ, so most users (I would guess more than 90%) are not looking to upgrade in near future. A typical 5DIII user is perfectly happy with his/her camera, it will be extremely difficult for Canon to offer something that will make majority to upgrade. Same is true for most other Canon or Nikon ILCs (smaller brands don't influence overall camera sale that much)

Other important factors in the equation are smartphone (most important actually) and world economy.

It is often suggested in these forums that if Canon were 'innovative' they would have done better. If we go by the 'innovations' shown by other brands and assume that those were present in Canon cameras too, there is no reason to believe that they would have done significantly better maybe except for mirrorless. But mirrorless market is still small and there is nothing to suggest that things would change in near future.

Cameras and display media will have to change substantially before camera can return to their old glory.

 

[LonelyBoy]

LX100 is about $200 less but still a lot of coin for someone who use their camera for selfies, photos of food, cats, dogs and group photos.

When you see DSLRs in the hands of casual photogs what model do they tend to use and from what year was it introduced to the market?

I can't tell for all of them. Have distinctly seen a 5D3, some indeterminate Canons, some Nikons (both consumer and prosumer-size, by their looks) and one or two Sony cameras ever on my runs down by the lake, no matter how much chatter they generate. I wish I could be more specific than that, but I usually see these people while I'm running, and can't read model numbers without running right past people, which I'm sure they'd appreciate.

And, all the people I know who take pictures for selfies, photos of food, cats, dogs, and group photos... either use a DSLR for some or all of that, or a smartphone. I haven't seen a single pocketable compact in years. It may be a matter of demographics and living in Austin, which is quite a rich city, but not one. And I'm the sort of guy keeping tabs of when I see Windows Phones, for example.

 

[LonelyBoy]

Maybe they should offer products that are more exciting and enticing to customers instead of just boring. Glad to see their profits drop. Maybe once they are facing a deficit will they actually start to do something to reinvigorate their camera division.

You mean besides the 100-400ii and 11-24, besides the amazing and affordable EF-S STM line, dual-pixel AF, and 5DS/R?

I suppose if you're after excitement instead of innovation, they could hire Ashton Kutcher to do a series of commercials.

 

[gregory4000]

Canon is the best for their lens technology.
They should develop a micro compact IS zoom lens for cell phones.
selling theses to Apple and samsung ,etc would offer canon a healthy finacial position for the future.
Large masses will be using their lenses world wide and this will allow Canon to develop even better future lenses
with the profits they gain.

 

[Diltiazem]

Maybe they should offer products that are more exciting and enticing to customers instead of just boring. Glad to see their profits drop. Maybe once they are facing a deficit will they actually start to do something to reinvigorate their camera division.

You seem to forget that drop in profit is not quite unique to Canon, it's a reflection of general camera industry. Their camera division is still making money, only other brand doing so in last few years is Nikon. I am pretty sure they know what they are doing.

 

[kphoto99]

I just came back from 3 weeks in Europe, mostly touristy places. I saw lots of Canon rebels, few 7(0)Ds, some Nikons (don't know what). Fair bit of 5DII(I), mostly in the hands of people from China. But what surprised me the most is the amount of Sony cameras, easily four times as much as all other brands combined.