Canon Reports 29 Percent Drop in Q1 Profit as Compact Camera Sales Slump

Photogs who frequent photo forums like CR will probably not substitute their dedicated still cameras for a smartphone or tablet.

As such we make up less than 1% of 1% of 1% of the overall worldwide camera market.

In the long term SLRs will become as relevant as range finders. For this reason Leica entered the medium format market.

In the long term mirrorless will eventually be used heavily by working photographers as SLRs are today.

In the long term point & shoots will survive by staying up market with better integration with smartphones.

Unless of course companies like Apple will again introduce another disruptive technology/product that'll further erode dedicated still cameras.

It took decades for 35mm full frame film rangefinder cameras to dislodge large format and medium format cameras in the early 20th century.

It took decades for film SLR cameras to dislodge range finders in the late 20th century.

It took about a decade for digital cameras to dislodge film cameras.

Fortunately for Canon they're a very diversified unlike Nikon.

I honestly would not be surprised if Sony will introduce a medium format version of their full frame point and shoot the RX1. Hopefully it will not cost more than $5,000.
 
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dilbert said:
neuroanatomist said:
Market saturation and slow (or lack of) economic recovery. Nikon also revised estimstes downward. Not sure about other brands, but Canon and Nikon are most of the market.

Sony just had their best quarter in 7 years...

http://www.bloomberg.com/news/articles/2015-02-04/sony-narrows-annual-loss-forecast-on-image-sensors-playstation

http://www.sonyalpharumors.com/sony-announces-best-quarterly-profit-in-7-years/

According to that article Sony is making money on sensors which are used in smartphones. ;D ;D

"biggest contributor being its devices unit, which supplies the image sensors that power cameras built into its Xperia smartphones and Apple Inc.’s iPhones. Hirai is boosting investment in the chip unit to build more modules for phones, tablet computers and automobiles."
 
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ritholtz said:
dilbert said:
neuroanatomist said:
Market saturation and slow (or lack of) economic recovery. Nikon also revised estimstes downward. Not sure about other brands, but Canon and Nikon are most of the market.

Sony just had their best quarter in 7 years...

http://www.bloomberg.com/news/articles/2015-02-04/sony-narrows-annual-loss-forecast-on-image-sensors-playstation

http://www.sonyalpharumors.com/sony-announces-best-quarterly-profit-in-7-years/

According to that article Sony is making money on sensors which are used in smartphones. ;D ;D

"biggest contributor being its devices unit, which supplies the image sensors that power cameras built into its Xperia smartphones and Apple Inc.’s iPhones. Hirai is boosting investment in the chip unit to build more modules for phones, tablet computers and automobiles."

It also notes that the cameras portion of Sony is not doing so well. Sony does well on two things, sensors and finance (Loans). Movies turn a small profit. Cameras aren't losing money, and games are doing reasonably well.

TV sets and smart phones drag the entire company down to a net loss.
 
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YuengLinger

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The economy in the USA is the worst it has been since the 1930's. Much of Europe is struggling. I understand that many Chinese have long viewed SLR's as extravagant and ostentatious. Cellphone snapshots are sufficient for people when money and time are tight, and there is so much cheap entertainment everywhere. Also, in the USA, education is so poor that few people know bad photography from good.

Good photography takes a lot of time. A lot.
 
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neuroanatomist said:
Sunnystate said:
Company that got tons of money from us has obligations to spent it in to our enjoyment.

I got a few odd looks from people because when I read this, I literally laughed out loud. Sorry, but that statement is simply ridiculous. The only obligation Canon has is to return value to their shareholders.

Sounds like short term thinking to me.
 
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sanj said:
neuroanatomist said:
Sunnystate said:
Company that got tons of money from us has obligations to spent it in to our enjoyment.

I got a few odd looks from people because when I read this, I literally laughed out loud. Sorry, but that statement is simply ridiculous. The only obligation Canon has is to return value to their shareholders.

Sounds like short term thinking to me.

You can view it however you like. In most jurisdictions (including the US and Japan) it's actually a legal obligation for publicly held corporations.

If you think they're focused too much on the short term, I suggest that's because you're viewing their decisions from your narrow perspective as a consumer of their cameras and lenses (and from a consumer perspective, I share that view, but I also attempt to consider and understand the broader view of the business).

Canon just spent nearly US$3B to acquire a video surveillance company, and is reportedly looking to spend another $3B on a medical device company acquisition. Each of those acquisitions (separately) represents more than Canon spends per year on internal R&D across the entire company. Those investments represent ~15% of Canon's market cap...strategic investments to drive long term revenue and thus deliver shareholder value. It seems pretty clear that they don't see consumer cameras/lenses as a long-term growth area.
 
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YuengLinger said:
The economy in the USA is the worst it has been since the 1930's. /quote]

I would like to see some citations supporting this. The economy has fluctuated a lot in the past years, but I seriously doubt that the US economy is the worst since the 1930s. But then how does one objectively measure how good or bad and economy is?

Also, in the USA, education is so poor that few people know bad photography from good.

Having grown up with the US education system, Photography appreciation has never been on any curriculum. :)

Perhaps it is not a matter people not knowing "bad" photography from "good" photography, but more along the lines of people knowing when photography is "good enough". Good and bad are all subjective measures.

One can always identify a poor artist. He or she is the one lamenting that the public is too gauche to recognize the obvious greatness of their art. ;D
 
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YuengLinger

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In reply to AcutancePhotography:

Economy: Longest period of declining wages, lowest participation in job market and largest number of unemployed since the Great Depression, most people on food stamps, welfare, subsidized housing, "disability." Largest number of homeless per-capita.

Please tell me a decade since the 30's when you think the economy was worse.

As for education, please check US student rankings. Please investigate how many MBA programs, and the GMAT itself, are now lowering standards for US applicants because foreign students are overwhelmingly outscoring.

US colleges and businesses recruit so many foreign-born students because the students who have been subjected to the US education system struggle to get through core curricula.

You, Acutance, used the "A word" (ART!) for photography, not me. While some photography is certainly artistic, even great art, I was thinking in terms of fulfilling a purpose. If somebody hopes for a pleasing photo of a child or spouse, but consistently takes photos that are unflattering in many ways, they have not done a good job, but they settle for what they got from their smartphone. There are lousy carpenters, auto-mechanics, chefs, landscapers...And photographers. Somebody who hangs a new door as a DIY project and feels proud, but doesn't notice or doesn't care that the door has to be lifted up forcefully to close all the way, has done a bad job.

People do bad jobs with photographs, but they don't care or they settle because they don't have the time or desire to improve. If you want to take a nice shot of somebody, but the subject's nose is unintentionally bulbous, or the skin-tone is cadaverous, or the eyes are nearly closed, or telephone poles are growing out of their head, or their strong jaw looks like it is disappearing into double chins...If the intention was to capture and share the beauty and charm but instead the subject looks ridiculous, that's a fail.

If more and more people are taking lousy photos, standards go down, and many snapshooters think their lousy photos don't look too much worse than the others on facebook.

So, with little discretionary income, a bleak economic prospect, little education of value, people don't aspire, of all things, to taking better pictures. And many hardworking people who do earn a decent income, but have little time because of career and family, simply cannot take the time to learn good photography.

Marketing and a failure to understand the learning curve have made many people frustrated with their SLR cameras. Some who could afford them wondered why their pictures weren't suddenly amazing.

That's why I ended my previous post with a reminder of how much time is involved in becoming a good photographer.

So Canon has the economy, smartphones, and education to deal with in learning how to make a profit in the current market with compact cameras that are a step up from smartphones, but still relatively inconvenient to carry around. And when it comes to SLR's, the economic factor is bigger, education is bigger, and then there is the "geek factor" to overcome. Even seasoned photographers sometimes feel self-conscious about carrying and using an SLR, so a socially awkward young person, or somebody who doesn't want to look like a nerd or "guy with camera" or whatever has a big hurdle to overcome.

I still remember how ridiculous I felt the first time I used a tripod in public. I used to think only pros and pathetic wannabes used them. Now it comes naturally, and I'm sure I look as ridiculous as ever. 8)

Finally (!), if a photographer believes there are no standards, no way to tell good from bad, then all the time spent learning the craft was a complete waste. Such a mindset reflects a state of despair or depression that I hope is temporary. :-\
 
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The US isnt the universe and it is rather saturated when it comes to dedicated still cameras.

The growth area is China and will outpace the US in under a decade in market size.

There are also other emerging markets like India that has as many people as China and they will all need the basics we all in CR take for granted.

The dedicated still camera market will survive unless a company like Apple offers a product that can do the same task as a SLR or mirrorless at a lesser cost or a greater over all convenience.

As for VR... I think it's well worth thinking that it should try to cost under $500 and you do not need to read the manual to use it.

Or else it'll be as popular as dedicated still cameras and not smartphones. Profitable but NOT as profitable.

Facebook bought into it so it has potential. Facebook potential...
 
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YuengLinger

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Neither the US nor any other country is the center of the universe. The US has, however, historically been a wealthy consumer nation. That is changing quickly, with a lot of wealth that was here now being in the hands of the Chinese.

Japan will have to adapt to the consumer habits of China, and China will have to overcome lingering resentment towards the Japanese. As soon as SLR's become a major hit in China, a Chinese company will happily start churning them out. Maybe it is already happening.

India? Hope so.

But, Europe is sick and getting sicker, economically: http://www.telegraph.co.uk/finance/comment/jeremy-warner/11569329/Jeremy-Warner-Negative-interest-rates-put-world-on-course-for-biggest-mass-default-in-history.html

So, it isn't only Canon facing an uncertain future, but, as others have pointed out, they seem to be on a good track to diversifying.

My interest in the game? I think Canon SLR's are incredible photography machines, and the lens selection is stellar. The repair support is wonderful. I'd like to see them offering (or at least supporting!) eos/ef gear for decades to come. But with technology, few have the vision to predict even a year out.
 
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Per the Economist the #1 item bought by Chinese tourists in Japan are washlets. ;) Believe you me that's the #1 item I wanted to bring home from Japan.

Given the mainland Chinese propensity for status symbols (eg In HK's grey market the Leica M Typ 240 costs more than the Leica M-P Typ 240 even though the later costs $2,000+ more in the US because of the red dot) the SLR is a natural fit for the newly rich or middle class Chinese.

Europe either has an aging population or they're just plain overspending per person.

The most vulnerable company in CIPA's Nikon. I believe over 70% of their revenue is from dedicated still cameras?

http://nikonrumors.com/2015/02/07/nikon-had-another-bad-financial-quarter.aspx/
 
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neuroanatomist said:
dolina said:
The most vulnerable company in CIPA's Nikon. I believe over 70% of their revenue is from dedicated still cameras?

Balderdash. They offer two card slots on many models and more low ISO DR. How can they fail?? ;)

Which camera system is likely to exist in the future:

The one from a company that generates the majority of income comes from cameras or
the one where the cameras are such a small part of profit that the management may decide that the distraction of making the DSLR is not worth it for the bottom line?

Desperation or apathy.
 
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kphoto99 said:
neuroanatomist said:
dolina said:
The most vulnerable company in CIPA's Nikon. I believe over 70% of their revenue is from dedicated still cameras?

Balderdash. They offer two card slots on many models and more low ISO DR. How can they fail?? ;)

Which camera system is likely to exist in the future:

The one from a company that generates the majority of income comes from cameras or
the one where the cameras are such a small part of profit that the management may decide that the distraction of making the DSLR is not worth it for the bottom line?

Desperation or apathy.

As in Sony or Panasonic or Samsung?
 
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dilbert said:
Sony's trend is up, Canon's trend is down.

True. Canon's downward trend means they posted only a ¥48B income. Sony's upward trend means they posted only a ¥128B loss. Wow, that's sure good news for Sony and bad news for Canon. I highly recommend you invest all your liquid assets in Sony stock, based on that incredible upward trend you mention.
 
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neuroanatomist said:
dilbert said:
Sony's trend is up, Canon's trend is down.

True. Canon's downward trend means they posted only a ¥48B income. Sony's upward trend means they posted only a ¥128B loss. Wow, that's sure good news for Sony and bad news for Canon. I highly recommend you invest all your liquid assets in Sony stock, based on that incredible upward trend you mention.

If the trend continues, it might be a good investment. :) The problem is that people here are taking disparate pieces of data and trying to infer way too much. :)
 
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neuroanatomist said:
dilbert said:
Sony's trend is up, Canon's trend is down.

True. Canon's downward trend means they posted only a ¥48B income. Sony's upward trend means they posted only a ¥128B loss. Wow, that's sure good news for Sony and bad news for Canon. I highly recommend you invest all your liquid assets in Sony stock, based on that incredible upward trend you mention.

:) :)
 
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