Financial Times - "Digital cameras: out of focus"

[Oceo]

Tuesday's U.S. edition of the Financial Times newspaper has an article entitled "Digital cameras: out of focus". It describes, from a business perspective, the status of digital cameras vis-a-vis smartphones with digital imaging ability. The FT reports analysis by Nomura Securities that the number of digital cameras sold by makers such as Canon and Nikon have fallen by 60 per cent. in the past two years. Shipments of digital cameras with built-in lenses were (in thousands) 108,577 in 2010; 77,981 in 2012; and estimated 26,480 in 2014. Shipments of interchangeable lens digital cameras were (in thousands) 12,887 in 2010; 20,157 in 2012; and estimated 12,543 in 2014.

Apparently this is worse news for Nikon than for Canon. Reportedly, digital cameras represent two-thirds of Nikon's group sales and all of its operating profits. For Canon, cameras are one-quarter of revenue, and Canon's office division provides cash flow.

So sales of premium DSLR's are holding up better than sales of digital cameras with built-in lenses, but the article notes that as smartphones incorporate higher quality lenses [and sensors] the camera makers risk losing the camera enthusiasts, too.

The article lists the 2013 world market shares (%) of all cameras by global brand owner:

Canon 23.1
Nikon 16.8
Fuji Photo Film 11.4
Sony 10.6
Samsung 7.6
Panasonic 7.2
Olympus 6.1
Kodak Alaris 4.2
Casio Computer 1.7
Ricoh Imaging 0.6

Financial Times, Tuesday 30 September 2014, p. 14.

 

[Sella174]

Pleasantly surprised to see FUJIFILM in third place with 11.4% - especially since they are exclusively in the mirrorless segment.

Anyway, this situation (of falling camera sales) is quite obvious and inevitable, as camera-type cameras are pushed out by camera-enabled devices. The reason is quite simple and two-fold: for most people a camera-enabled devices produces sufficient image quality that is mostly on par with nearly all P&S and entry-level DSLR's with kit lens; and the camera-enabled device nearly always offers functionality and ease of use that is not provided by basically all DSLR cameras still on the market.

 

[fragilesi]

Tuesday's U.S. edition of the Financial Times newspaper has an article entitled "Digital cameras: out of focus". It describes, from a business perspective, the status of digital cameras vis-a-vis smartphones with digital imaging ability. The FT reports analysis by Nomura Securities that the number of digital cameras sold by makers such as Canon and Nikon have fallen by 60 per cent. in the past two years. Shipments of digital cameras with built-in lenses were (in thousands) 108,577 in 2010; 77,981 in 2012; and estimated 26,480 in 2014. Shipments of interchangeable lens digital cameras were (in thousands) 12,887 in 2010; 20,157 in 2012; and estimated 12,543 in 2014.

Apparently this is worse news for Nikon than for Canon. Reportedly, digital cameras represent two-thirds of Nikon's group sales and all of its operating profits. For Canon, cameras are one-quarter of revenue, and Canon's office division provides cash flow.

So sales of premium DSLR's are holding up better than sales of digital cameras with built-in lenses, but the article notes that as smartphones incorporate higher quality lenses [and sensors] the camera makers risk losing the camera enthusiasts, too.

The article lists the 2013 world market shares (%) of all cameras by global brand owner:

Canon 23.1
Nikon 16.8
Fuji Photo Film 11.4
Sony 10.6
Samsung 7.6
Panasonic 7.2
Olympus 6.1
Kodak Alaris 4.2
Casio Computer 1.7
Ricoh Imaging 0.6

Financial Times, Tuesday 30 September 2014, p. 14.

So Canon is not that far from being the equal to Nikon and Sony combined?

 

[tushit]

Are these US numbers or worldwide shipments :-\?

 

[AcutancePhotography]

Are these US numbers or worldwide shipments :-\?

"The article lists the 2013 world market shares (%) of all cameras by global brand owner:"

 

[weixing]

Hi,
IMHO, yes, smartphone will kill the low end compact camera market, but also might increase high end compact and DSLR sales. Those user using smartphone camera most probably are not interested in photography in the first place, but once they shoot more with smartphone, they might be interested in photography and once they are interested in photography, they might buy a DSLR. Camera manufacturer should actually target those smartphone shooter by showing the different in quality and speed between a smartphone and a high end compact and DSLR.

Have a nice day.

 

[Valvebounce]

Hi folks.
Have I fallen down on the maths, or did canon really only sell 2.9 million ILD cameras? (Making the broad assumption that market share is the same 23.1% for both camera types in the article).
This seems an incredibly low number, though much better than before I re-read the article and noticed the "(in thousands)"! D'oh!

Cheers, Graham.

 

[AmselAdans]

The trend of merging functionalities into one device continues
- who still buys a dedicated gps device, if he has a smartphone with GPS functionality?
- who still buys a P&S, if his smartphone delivers IQ that completely fulfills his needs?
- who still buys a handheld gaming device, if he has a smartphone with cool 3d graphics and games?
...

the answer to all these questions is the same:
One buys a dedicated decive, if the smartphone cannot fulfill his intentions. This is the case, when he wants to do something, which exceeds the most common uses:
- he wants to use GPS for hiking, manually create routes, waypoints etc. -> he buys a dedicated gps device
- he wants to have a nice Bokeh, he wants better IQ, shallower DOF -> he buys a dedicated camera (either P&S/DSLR/whatever)
- he wants to play games, which are more elaborated than most casual games available for smartphones -> he buys a ... (boy, I'm too old. What's a recent device for this? Let's say em a "Nintendo Game Boy Color 3D")

Long story short, my opinion:
- the cheap P&S segment will die (the cheapest 80€ Canon P&S I had in my hands are truly weak in overall performance)
- the DSLR segment will be thinned out, there remains a high end segment, potentially only existing of FF sensors
- the entry level DSLR segment (EOS XXXXD, XXXD, XXD series) will eventually become mirrorless and completely merge with the ILS market
- few P&S without ILS will remain with entry prices around 200€

 

[AcutancePhotography]

Long story short, my opinion:
- the cheap P&S segment will die (the cheapest 80€ Canon P&S I had in my handy are truly weak in overall performance)
- the DSLR segment will be thinned out, there remains a High End Segment, potentially only existing of FF sensors
- the entry level DSLR segment will eventually become mirrorless and completely merge with the ILS market
- few P&S without ILS will remain with entry prices around 200€

I think that is a realistic prediction. I think you covered it well.

 

[AcutancePhotography]

Nikon doesn't have the same cost as Canon does either (just buys from Sony.)

Would that not make the sensors Nikon uses more expensive as not only are the costs of Sony R/D passed to Nikon so are the Sony profits for the sensors. These are passed on to the Nikon customer along with Nikon's profit.

One of the advantages of inhouse production is cost savings

 

[AmselAdans]

Another point I'd like to mention is the over-saturation of the market: Everybody, who wants to have a cam already has at least one.
When I look at my family, everybody (even the children at the age of 6) has his own cam. Not counted the old cameras that nobody wants to use anymore. And this despite this fact, the only one actually interested in photography is me. (my father omitted his old Minolta SLR and lenses a long time ago and is happy with a P&S)

So when is the point in time to buy a new P&S? I made the experience that most of my family members and friends are fine with their camera, even if its 5, 6, 7 years old. And they probably wouldn't see any benefit in buying a new one. So there is little market for the P&S anymore.

 

[Maui5150]

1st and foremost, the author is an idiot and their conclusion out of focus (See what I did there )

Cameras like the Canon 1D did not come out til 2001 and even there there was a definite barrier to entry. But looking at DSLR sales you see 12800 in 2010 20,000 in 2012 and 12500 in 2014. While that shows a decline, I think more of what it shows was a huge surge between 2010-2012 where I believe a lot of P&S camera owners made the jump to DSLRs. This is also shortly after cameras like the 5D MK II and 7D came out at the end of 2009.

These cameras are still solid, while they may not be pushing the envelope, how many DSLR sales between 2010 and 2014 were people buying used gear like 7Ds, 5DMKIIs, etc.

A more telling number are number of cameras / DSLRs in use.

As an example, between 2010 and 2012 I bought 3 DSLRs, from a Rebel T2i, to a 5D MKII and a 5DMKIII

From 2012 - 2014 I sold the t2i and replaced it with a t5i just as a cheaper dedicated video camera body.

I will likely upgrade the t5i to the 7D MK II but wait on a refurb deal as well as upgrade the 5D MK II to the 5D MK IV or a 1Dx if price drops a little more... depending.

Looking at 3 points in time does not give you a whole lot of information to go. While there is more availability of Camera phones, these are more the point and shoot consumer and not the DSLR market. When I start seeing wedding photographers or fashion photographers only shooting with iPhones, then maybe the shark has been jumped.

My Blu-Ray player is probably 3+ years old. Better and cheaper players have come out, but no reason for me to upgrade really until it breaks.

I am willing to get that the generation of cameras from 2010 - 2015 hold up better in useful life than those of 2005 -2010, i.e. While we will bet better AF, more DR, I think the MP between 20 - 40 is really a sweet spot and cameras like the 5D MK III and the like will have a longer life than say the 5D in terms of 2nd and 3rd owners

 

[Sella174]

A more telling number are number of cameras / DSLRs in use.

Whilst this is certainly a valid train of thought, the problem with it lies in that companies - like Canon, Nikon, FUJIFILM, etc. - only receive revenue when we BUY A NEW CAMERA. They make absolutely zilch income when we continue to use our trusty 30D for six or more years; or buy secondhand. This means that as manufacturers build better cameras that people use for longer periods, revenue drops; and when revenue drops, so do profits; and this makes the shareholders very cross.

Now, if they can reconfigure the cameras so that we rent them AND pay a per shutter actuation fee ... ;D

 

[AcutancePhotography]

Now, if they can reconfigure the cameras so that we rent them AND pay a per shutter actuation fee ... ;D

Don't give them any ideas!!!!

 

[Maui5150]

A more telling number are number of cameras / DSLRs in use.

Whilst this is certainly a valid train of thought, the problem with it lies in that companies - like Canon, Nikon, FUJIFILM, etc. - only receive revenue when we BUY A NEW CAMERA. They make absolutely zilch income when we continue to use our trusty 30D for six or more years; or buy secondhand. This means that as manufacturers build better cameras that people use for longer periods, revenue drops; and when revenue drops, so do profits; and this makes the shareholders very cross.

Now, if they can reconfigure the cameras so that we rent them AND pay a per shutter actuation fee ... ;D

Not necessarily.

How many people who buy a used 5MK II for their first DSLR buy lenses?

Why do you think Canon basically gives away some of its printers - because the Ink is where so much of the money is... Heck often I just buy a new printer.

So if I look at my purchases over the last 4 years.
T2i
5D MK II
5D MK III
t5i

T2i I bought new, 5D MK II I bought used, 5D MK III I used Canon Upgrade program, T5i I bought refurb.

I may have $5K in bodies and around $450 back when I sold the t2i

Lenses:
70-200 F/2.8 IS MK II
24-70 F/2.8 II
16-35 MK II
24-105 F/4 (kit lens)
50 f/1.4
85 f/1.8

Canon has made another 5K on lenses as well as probably another $1.5K on flashes from 430 EX II, 580 EX IIs though waiting on the Yongnuo for the 600rt.

Also will eventually get the 200-400 or 300 IS F/2.8 just more waiting for when I am ready, which is probably after my next two body upgrades.

Shutters and cameras do wear out and while my bodies all tend to be under 30K actuations, what is hidden in the numbers is for every upgrade like I plan to do, there are more people who will then enter with used gear and wind up getting more lenses, flashes, etc.

More telling, I think there is a small decline in the DSLR market, bot not as pronounced as the article leads one to believe. There appears (at least to me) to be a solid core of DSLR shooters who will likely remain DSLR shooters. There are always the hobbyiests (that is who I got my 5D MK II from) and for all those who get in and out, there are the hidden budget folks who always are buying a generation old gear, but keep the numbers higher than shown.

While they also tend to probably buy used lenses, those folks allow us to upgrade our lenses when new versions come out and upgrade far more than we could otherwise. Lenses tend to hold their value far better than bodies.

Hell, especially for long teles, I still see FD versions sell well probably because of Ed Mika adapters alone.

For Canon numbers, if you look at the last 2 years, they have also not had any real major releases. But in the next 12 month we should have the 7D MK II, the 5D MK IV, the 1DX II and perhaps a high MP if that is not one of the two later.

Do you think Canon's 23% might rise greatly with 3 - 4 top end Pro/Prosumer bodies in 12 months? If anything Nikon has released far more bodies over this period, yet still seemed to slip a little. I would not be surprised to see Canon up around 26% or higher end of 2015

 

[Sella174]

How many people who buy a used 5MK II for their first DSLR buy lenses?

Ah, but the article is about CAMERA sales, not lens sales.

... what is hidden in the numbers is for every upgrade like I plan to do, there are more people who will then enter with used gear and wind up getting more lenses, flashes, etc.

Of which many will be bought secondhand from "upgraders" - as you also stated.

There appears (at least to me) to be a solid core of DSLR shooters who will likely remain DSLR shooters.

True. However, there are also a lot of people who bought middle-range DSLR's and have now found that their iPhone is just so much more convenient ... and takes alright'ish enough pictures semi-equivalent to the kit lens. So they sell the practically brand-new 60D to finance the next-generation iPhone. Canon makes zippola, because the DSLR is not "upgraded" with a new DSLR.

Hell, especially for long teles, I still see FD versions sell well probably because of Ed Mika adapters alone.

For which Canon doesn't get a dime, penny or cent.

But in the next 12 month we should have the 7D MK II, the 5D MK IV, the 1DX II and perhaps a high MP if that is not one of the two later.

You wish. ;D

Do you think Canon's 23% might rise greatly with 3 - 4 top end Pro/Prosumer bodies in 12 months?

Canon already has too many DSLR models on the market, IMO. This causes buyer confusion.

 

[Mt Spokane Photography]

The actual figures, except for market share are readily available from the CIPA website on a monthly basis. Market share are a guess based on polls, and can be way off, just like the election polls.

http://www.cipa.jp/stats/dc_e.html

Sales of P&S cameras has tanked. Canon and others publically acknowledged this over a year ago. Their strategy is to drop out of the low end market, and push hard at the high end P&S Market where the profits are. That's why we see the Canon G1X series, and now the G7X. We will likely see a new Canon mirrorless model early next year.

While sales have dropped sharply over the last two years, prices per unit have increased across the board. This indicates that buyers continue to move to higher end cameras, so we will see more activity there. Camera manufacturers have tightened their belts and are now more efficient, so they are selling less, but profits are increasing.

 

[9VIII]

Another point I'd like to mention is the over-saturation of the market: Everybody, who wants to have a cam already has at least one.
When I look at my family, everybody (even the children at the age of 6) has his own cam. Not counted the old cameras that nobody wants to use anymore. And this despite this fact, the only one actually interested in photography is me. (my father omitted his old Minolta SLR and lenses a long time ago and is happy with a P&S)

So when is the point in time to buy a new P&S? I made the experience that most of my family members and friends are fine with their camera, even if its 5, 6, 7 years old. And they probably wouldn't see any benefit in buying a new one. So there is little market for the P&S anymore.

I think this is as critical an issue as anything.

For the last ten years people have been rushing to upgrade with every new release (or not, given the number of 5DC users I hear about around here), whereas I expect to get a good 10-20 years out of the next full frame body that I buy (as long as it's over 32MP).

I have to wonder though, how much did the P&S department actually affect SLR lenses and bodies? Did development in one area actually carry over to the other at all? Did they share any machinery, technicians, staff, etc?
If selling a high end body and a big white was profitable before, I don't see that changing. Canon as a whole will shrink a little, the loss of P&S will hurt, but I don't think it's going to drastically alter the business model for high end cameras
Camera companies got along just fine for half a century with bodies being of minimal importance, going back to that model shouldn't tear the industry apart.

 

[Sella174]

Camera companies got along just fine for half a century with bodies being of minimal importance, going back to that model shouldn't tear the industry apart.

The only difference then was that DR, ISO (aka ASA), etc. wasn't their problem; now it is.

 

[e17paul]

Nikon doesn't have the same cost as Canon does either (just buys from Sony.)

Would that not make the sensors Nikon uses more expensive as not only are the costs of Sony R/D passed to Nikon so are the Sony profits for the sensors. These are passed on to the Nikon customer along with Nikon's profit.

One of the advantages of inhouse production is cost savings

That depends on volume. Sony are able to soften the burden of development by taking profit from Nikon, Pentax etc.

Canon bear the immense burden of sensor development single handed.