Nikon = hurting. (question mark changed to a period)

[ahsanford]

https://petapixel.com/2017/02/13/nikon-cancels-dl-series-amidst-extraordinary-loss-restructuring/

Ouch.

- A

 

[Loswr]

Re: Nikon = hurting?

[quote author=pick your favorite dictionary]
ex·traor·di·nar·y ikˈstrôrd(ə)nˌerē,ˌekstrəˈôrdnˌerē/
adjective
1. very unusual or remarkable.
noun
1. an item in a company's accounts not arising from its normal activities.
[/quote]

In this case, their 'extraordinary loss' is the noun, not the adjective. Not saying it's a good thing, but it's quite normal for a company who's primary revenues come from a shrinking market.

 

[ahsanford]

Re: Nikon = hurting?

[quote author=pick your favorite dictionary]
ex·traor·di·nar·y ikˈstrôrd(ə)nˌerē,ˌekstrəˈôrdnˌerē/
adjective
1. very unusual or remarkable.
noun
1. an item in a company's accounts not arising from its normal activities.

In this case, their 'extraordinary loss' is the noun, not the adjective. Not saying it's a good thing, but it's quite normal for a company who's primary revenues come from a shrinking market.
[/quote]

The market unfortunately did that thing it tends to do when wind of bad news gets around:

https://petapixel.com/2017/02/14/nikon-stock-plummets-15-extraordinary-loss-bombshell/

- A

 

[Mt Spokane Photography]

But Nikon Stock for a almost guaranteed 15% return when the next quarter statement shows a big jump in profits. A one time write down of losing parts of a business mean that the profitible parts will not be diminished by losses. Canon does well with DSLR's, their mirrorless and P&S sales are hurting.

They need a FF mirrorless just to show the market they are alive.

 

[ahsanford]

But Nikon Stock for a almost guaranteed 15% return when the next quarter statement shows a big jump in profits. A one time write down of losing parts of a business mean that the profitible parts will not be diminished by losses. Canon does well with DSLR's, their mirrorless and P&S sales are hurting.

They need a FF mirrorless just to show the market they are alive.

Agree in that a smart / planned / calculated writeoff might load the deck to beat future expectations.

But I think FF mirrorless is fairly well insulated from bossing stock prices -- it's not a mass-consumer product that they will sell like a D5600 and it's not a flagship pro rig they'll get steady units from either. It's a colony ship for the future that won't yield a huge return until mirrorless production savings can be maximized in a bread and butter camera segment, i.e. a future D950 pitches the mirror and is sold for the same price.

So I see CaNikon getting into FF mirrorless being more symbolic historically in that it effectively pushes the boulder downhill that will eventually signal the end of the SLR. But seeing as that transition period might 10+ years, so again, I don't see it driving investors that dramatically in the near term.

- A

 

[unfocused]

...They need a FF mirrorless just to show the market they are alive.

...I think FF mirrorless is fairly well insulated from bossing stock prices -- it's not a mass-consumer product...It's a colony ship for the future that won't yield a huge return...

...it effectively pushes the boulder downhill that will eventually signal the end of the SLR. But seeing as that transition period might 10+ years, so again, I don't see it driving investors that dramatically in the near term.

Well said.

Predictions of Nikon's doom are vastly overstated, as are predictions of Canon's. Certainly Nikon is not in as strong of a position as Canon is, but both companies are well-managed and know their business far better than any of us.

The products that get forum participants all hot and bothered are seldom products that contribute significantly to either company's bottom line.

I've been a vocal critic of all camera manufacturers because they were so slow on the uptake when it came to connectivity. It appears they have finally caught on. Unfortunately, it's probably too late to save their fixed-lens models. But, assuming any company is headed for demise because they aren't offering a specific product that a handful of people on a geek forum want is a bit delusional.

 

[AvTvM]

The products that get forum participants all hot and bothered are seldom products that contribute significantly to either company's bottom line.

Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line - even when they are not volume sellers. Canon 1D, 5D series and L lenses are all "niche products" in the overall (stills) imaging market, but the contribute rather handsomely to Canon's bottom line. And tostock price, because hi-end products are the only ones mentioned in "Finance/Investing related media". Nobody on Bloomberg writes about a new Nikon D5600 or Canon Rebel/KISS-me-Kate. But when Nikon or Canon launch new flagship models, it is usually noticed there.

 

[Mikehit]

The products that get forum participants all hot and bothered are seldom products that contribute significantly to either company's bottom line.

Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line - even when they are not volume sellers. Canon 1D, 5D series and L lenses are all "niche products" in the overall (stills) imaging market, but the contribute rather handsomely to Canon's bottom line. And tostock price, because hi-end products are the only ones mentioned in "Finance/Investing related media". Nobody on Bloomberg writes about a new Nikon D5600 or Canon Rebel/KISS-me-Kate. But when Nikon or Canon launch new flagship models, it is usually noticed there.

I am sure the 1Dx2 contribute a good amount of money but I doubt that they are the biggest contributors to the bottom line as you seem to be saying. Profit margins on the xxxxD, xxxD are lower but they are massive sellers and it is the sheer volume that makes the profit. The 1Dx2 etc are the high-profile things that impress the public and get them realising Canon is an important camera maker and 'look at all those big Canon Cameras at the Olympics'. They are the bait for the mass market.
And the reason that the 1Dx2 and not the 1200D is mentioned in stock reports is that the 1Dx2 is the more impressive camera and impresses the people whose money you are trying to get. That is all. The same reason a car manufacturer's annual report focuses on their high-spec high-tech flagship cars and not the mum-goes-shopping runaround.

 

[Sharlin]

Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line

I am sure the 1Dx2 contribute a good amount of money but I doubt that they are the biggest contributors to the bottom line as you seem to be saying. Profit margins on the xxxxD, xxxD are lower but they are massive sellers and it is the sheer volume that makes the profit. The 1Dx2 etc are the high-profile things that impress the public and get them realising Canon is an important camera maker and 'look at all those big Canon Cameras at the Olympics'. They are the bait for the mass market.
And the reason that the 1Dx2 and not the 1200D is mentioned in stock reports is that the 1Dx2 is the more impressive camera and impresses the people whose money you are trying to get. That is all. The same reason a car manufacturer's annual report focuses on their high-spec high-tech flagship cars and not the mum-goes-shopping runaround.

Yep. The 1DX2 is about marketing and brand visibility, not about profit. My guesstimate is that there are 100 to 1000 Rebels sold for every 1DX2, so even if every 1DX2 made $1000 in profit, and every Rebel body only $5, the latter would still dominate the bottom line. But without the 1DX2, Canon would not have the position and the brand image to attract the thousands and thousands of Rebel buyers.

 

[Loswr]

C'mon folks, AvTvM has a business degree (from a fully accredited school, I presume) and has repeatedly (incessantly!) demonstrated his business acumen and extensive understanding of economic principles on these boards.

As usual, he presents absolutely no evidence to back up his claims…but seriously, how could you possibly even doubt him after all of his pithy posts?

 

[AvTvM]

Neuro, how about sticking to topic of thread? Or answer to postings?

Rather than just INCESSANTLY launching "ad hominem" attacks on me? Is attempted CYBER BULLYING really all you can? :

 

[Loswr]

Which generates more profits to contribute most to a company's bottom line?

1) Selling 3,000,000 basic widgets with a profit margin of 1 ¥

2) Selling 200,000 advanced widgets with a 10-fold higher profit margin than the basic widgets

If you answer #1, you might be right. If you answer #2, you might be AvTvM.

As Mikehit and Sharlin state, the higher end products do contribute heavily to the bottom line, but not just becuase of high margins, rather mainly because they are a very effective form of advertising.

 

[3kramd5]

Profit margins on the xxxxD, xxxD are lower

It wouldn't surprise me to learn that they're higher. I imagine there is significantly less development cost in the year over year model turnover line, and production runs will further drive down the costs.

 

[ahsanford]

Profit margins on the xxxxD, xxxD are lower

It wouldn't surprise me to learn that they're higher. I imagine there is significantly less development cost in the year over year model turnover line, and production runs will further drive down the costs.

On bodies, sure. I don't think that's in question.

The real profit unknown is how many Rebel folks are buying a second lens vs. the pros with 5D / 1D gear that almost certainly buy bags full of lenses (and flashes, accessories, etc.). So, sure, Rebels keep the lights on at Canon, but the higher end gear is hardly just a technical show pony to sex up the brand -- they are making a nontrivial chunk of change there as well.

- A

 

[3kramd5]

Profit margins on the xxxxD, xxxD are lower

It wouldn't surprise me to learn that they're higher. I imagine there is significantly less development cost in the year over year model turnover line, and production runs will further drive down the costs.

On bodies, sure. I don't think that's in question.

It is above, anyway. The post I quoted states that profit margins on xxxxD and xxxD bodies are lower than 1Dx2, but that it is made up in volume. That may be the case, but I suspect they win both in volume and in unit margin. Yes, from a body perspective. I wouldn't necessarily conflate body sales with lens sales, though. That muddies the waters too much.

 

[AvTvM]

If you answer #1, you might be right. If you answer #2, you might be AvTvM.

try again. to make a valid point. without personal attack on me.

 

[old-pr-pix]

CIPA reports something they call "fittment ratio," i.e. the number of interchangeable lenses shipped divided by the number of ILC bodies shipped. That number is consistently in the neighborhood of 1.6 to 1.7. That shows most folks buy one Rebel body with one kit lens and that's it. A smaller number buy the two lens Rebel kit. It's an even smaller number who have more than two lenses. Clearly the folks on this forum are not representative.

While it is likely the Rebels selling in the millions deliver the bulk of Canon's profit, the high-end 'halo' models help drive sales and deliver their own chunk of profit. Pentax sells their K-1 for under $2000, Nikon D810's go for $2200... independent of volume, logic says that Canon is banking a fair amount with the 5DIV priced at $3500!

 

[unfocused]

CIPA reports something they call "fittment ratio," i.e. the number of interchangeable lenses shipped divided by the number of ILC bodies shipped. That number is consistently in the neighborhood of 1.6 to 1.7. That shows most folks buy one Rebel body with one kit lens and that's it. A smaller number buy the two lens Rebel kit. It's an even smaller number who have more than two lenses. Clearly the folks on this forum are not representative...

Thanks for that. That is a statistic I've always wondered about. The amazing thing is that when you stop and think about it, the number of people who own more than one lens must be minuscule. Someone who is better at math than I am can figure this out, but if I own six lenses (1:6 ratio of bodies to lenses) and the average is 1 to 1.7, then there must be a heck of a lot of people out there with only one lens, plus as you say, you have to account for all those folks buying two lens Rebel kits.

 

[kphoto99]

CIPA reports something they call "fittment ratio," i.e. the number of interchangeable lenses shipped divided by the number of ILC bodies shipped. That number is consistently in the neighborhood of 1.6 to 1.7. That shows most folks buy one Rebel body with one kit lens and that's it. A smaller number buy the two lens Rebel kit. It's an even smaller number who have more than two lenses. Clearly the folks on this forum are not representative...

Thanks for that. That is a statistic I've always wondered about. The amazing thing is that when you stop and think about it, the number of people who own more than one lens must be minuscule. Someone who is better at math than I am can figure this out, but if I own six lenses (1:6 ratio of bodies to lenses) and the average is 1 to 1.7, then there must be a heck of a lot of people out there with only one lens, plus as you say, you have to account for all those folks buying two lens Rebel kits.

Count how many bodies you have.
I'm sure that nobody buys the same set of lenses for each body.
I have 5 bodies (not showing off). Once I divide my collection of lenses by 5, the ratio goes down substantially.

 

[Ozarker]

The products that get forum participants all hot and bothered are seldom products that contribute significantly to either company's bottom line.

Typically the products geeks in forums drool over and debate are the very products with the highest margins that contribute most to company's bottom line - even when they are not volume sellers. Canon 1D, 5D series and L lenses are all "niche products" in the overall (stills) imaging market, but the contribute rather handsomely to Canon's bottom line. And tostock price, because hi-end products are the only ones mentioned in "Finance/Investing related media". Nobody on Bloomberg writes about a new Nikon D5600 or Canon Rebel/KISS-me-Kate. But when Nikon or Canon launch new flagship models, it is usually noticed there.

That's why they are called "flagships." Has nothing at all to do with what they contribute to the bottom line. The flagship products are just sexier... like the Ford Raptor vs the F-150 XL. Which do you think contributes more profit to the bottom line?