Current orthodoxy in the camera market is based around the triumvirate of Sony, Nikon, and Canon. They hold the keys to the professional full frame sector, supported by wide ranging lens systems. However the last decade has taught us that change is normal, so would the best future for the sector lie in Nikon ending camera production?
No business is too big to fail, with some failing more spectacularly than others, Kodak being a case in point. However reality is often far more nuanced and Olympus' recent offloading of its camera division has shown that there are actually a myriad of ways for this to happen, which doesn't necessarily mean the loss of a product line. Just witness Minolta's transformation under Sony. Sales, bankruptcies, hostile take-overs, and closures are all on the cards when it comes to an imaging division moving on to a new future. It has been the same since the birth of photography: businesses start up and sell products before morphing in to something new. However the period of camera history we now find ourselves in is markedly different from anything else that has gone before and there are two key reasons why this is the case.
The Present Day is Unique
Firstly, it's no secret that sales of digital cameras have fallen off the edge of a cliff. We are regularly regaled with large year-on-year reductions in sales, but it pays to see what that actually looks like over the history of the digital camera (from CIPA sales data). As the graph below shows, the change has been seismic. They haven't just dropped, they've imploded. In 1999, film and digital sales had parity but since then it's all been about the digital camera. It was a success story predicated on increased consumer spending and microelectronics. Everyone wanted a digital camera and the golden years were 2007-2012, all with over 100M units sold. That's a lot of cameras.
Fable likes to point to the release of the iPhone in 2008 as the turning point when the smartphone outgunned and then outsold the compact camera market. The truth is that digital cameras were already in feature phones, starting with Sharp's J-SH04 in 2000, then outselling compact cameras by 2003. It took a few more years before consumers realized that they no longer needed a separate device. The impact was catastrophic with sales crashing from 120M to 60M in three short years, before entering free fall. In fact the last time camera sales dropped below 20M units was 1984 which gives an idea of the scale of collapse within the sector, except this time there are large companies contracting rather than small companies expanding.
The business impact has reverberated ever since. Building 120M cameras doesn't occur magically. The design, manufacturing, and sales channels needed to be spun up with profit returning to those that cornered this part of the market. Capacity expanded and cash flowed back to investors. The peak in sales coincided with the development of mirrorless which subsequently saw an unprecedented amount of research, development, and innovation. New camera systems abounded, born out of the compact camera boom; they were the perfect antidote to weening a wealthy public on to more expensive systems.
The reality was somewhat different as sales crashed, surplus stock was sold off, excess manufacturing capacity was wound down, and dwindling profits clung to. Those companies that made the right strategic choices at the start of the 2010s would reap at least some of the benefits and Sony was particularly successful in this regard when you consider that before 2006 they didn't have a camera division, yet by 2019 they were the number one seller of full frame cameras in Japan.
Secondly, digital cameras have become complex, high cost, devices which are as much about successful design as they are about supply chain sourcing and just-in-time manufacturing. Gone are the days of a small number of suppliers piecing together purely mechanical devices in a single factory. As this CNBC article about electronic suuply chains shows, in 2018 Apple worked with 43 suppliers across six continents but when you break this down in to raw materials it gets even more complicated. Apple sits at one end of the spectrum where it undertakes the design itself, but then outsources component manufacture and assembly to a global production line. Camera manufacturers tend to undertake much more manufacturing and assembly themselves, but this still relies upon a chain of third party suppliers. The complexity of design and manufacturing is at a level unseen in the past and is therefore a significant barrier to entry in to the market.
Exacerbating Factors
The above two unique features that are shaping the current camera industry have been exacerbated by two further factors. The first of these was the impact of mirrorless interchangeable lens cameras (MILC). Were they an inevitable outcome of digital camera development? Yes, in the sense that at least some manufacturers were always going to produce a MILC design. However more broadly no, at least not in the manner in which they have currently disrupted the market. The unique combination of timing and manufacturers has led to the current slow decline of the DSLR. Timing was important as all the seeds for mirrorless had been sown in the previous decade, in large part by Olympus starting with the Four-Thirds E1. With the peak in camera sales just about to arrive, manufacturers rushed to market with a plethora of new mirrorless systems. Foremost amongst these was Sony fresh from its 2006 purchase of Minolta with its E-mount sporting MILCs. Sony had the capacity, expertise, breadth, and vision to define the market and was also not heavily invested in DSLRs. They saw an opportunity and ran with it. Perhaps if sales had remained buoyant then the DSLR market would have persisted longer — it's difficult to know, but the knock on effect was to invest heavily in the development of top-shelf MILCs and so the balance of power shifted in this direction. Nikon and Canon rapidly followed suit as it became evident that not only was their core compact market largely gone, but that the DSLR sector was contracting.
As the graph above shows, the camera market has been gradually shrinking, with some manufacturers teetering on the edge of financial viability, as evidenced by Olympus' recent announcement. What the market didn't need was a shock to the system and this is precisely what it has got in the form of the COVID-19 pandemic. CIPAs sales figures for 2020 make pretty grim reading. January was down 20% on 2019 with 800k units, however this crashed to 370k units in May. Many businesses have been hit by the pandemic, but those that don't have a financial cushion will be severely impacted.
A Sustainable Camera Market?
The chain of events which I've outlined above has led to one key problem: the market has shrunk back to the size (in unit sales) it was at in 1984. In short there are too many companies, too many products, and too much production. The net result is excessive competition for an ever diminishing market. In order to combat this, production needs to downscale and become more efficient. The latter could in-part be addressed by following Apple's lead and focusing upon core camera expertise in terms of design and then outsourcing production in order to streamline supply chains and then manufacture in lower cost domains. Some camera manufacturers already do this, it's just that the scale of operations needs to increase.
In order to address excess production, there needs to be a net reduction in capacity. Whilst this may occur with Olympus' sale of its imaging division, this is currently a transfer of operations not a closure and, anyway, accounts for a relatively small proportion. In order for there to be a bigger market shift we would need to see one of the bigger producers — and specifically one of the big three — to pull out of the market. Canon and Sony are both too heavily invested, too diversified, and too successful to want to withdraw. That leaves Nikon as the single prime candidate for closing its production line. This would have the benefit of reducing capacity and so competition, allowing a lift in prices and so margins for the sector.
It would also benefit Nikon in terms of its focus as a company which has significantly shifted away from its Imaging Division. It is increasingly accounting for a smaller amount of income whilst incurring losses as it loses market share. Unlike all of the other main camera manufacturers who have much broader income streams, Nikon is still largely an optical company. Imaging Divisions can also be vanity projects for some corporations, persisting longer than they rightfully should given the lack of revenue.
Should Nikon cut its losses and exit the camera market? And would this result in a more balanced and better performing camera sector?
Is there a way to block certain writers? Tired of the really shitty ones taking up my time.
Mike Smith, I get that you are new to this. And that you haven't had much success in writing for Fstoppers by the look of your followers. But seriously? Read these comments. These are what your viewers are feeling after reading your article.
They think your writing is shit and a waste of time. Just stop man.
Well I too fell for the click bait. Drat.... Thought there might be something here. I'm a senior, active on my feet and in photography. However, my Nikon kit was still looking like I was a working pro with a sherpa and I decided Fuji would be a better way to stay active with a smaller load. I like the Fuji footprint and control system for my changing more landscape, travel, family shooting. I'd been loyal to Nikon since 1968.
I'm doing a bit more event and on camera strobe and I dearly miss the Nikon CLS and command dial interface for fast working in setting on-camera bounced flash exposures. In fact I miss to some degree full frame, but still get dynamite images with the Fuji.
Now with the Z system, that would have been the changes that I needed to stay with Nikon, just too late. I'm still thinking about reversing the move, but that's a huge commitment from a myriad of perspectives - to change the basic supplier of your photo gear - even filter sizes change.
The market place will do the picking, but IMO Nikon has a seed in the Z mirrorless to build quickly. Were I still taking sports or wildlife with big lenses, I'd still be with DSLR and the D850. There's not just one kind of photographer, and those of us left standing will determine who's supplying the gear. Maybe Apple for the journalists, maybe a crop sensor for the aging sports and wildlife - but you can't paint the industry with "tradition", because there's not just one of us.
The author's premise that Nikon should just bow out for the greater good of the industry, is like asking those ahead of you in line to move on for the greater good of your viewing pleasure.
Every one of these manufacturers is making the others better. What they have to do is quite competing with themselves. That's where there's going to be smoke in the boardroom, when all those product managers get together to see whos body/lens, pet project and fifedome survive. The companies need to be sleeker and their product lines slimmer and targeted. This change is not easy and some companies are better than others. You could argue that Sony is really the latest to the fray and with the fewest "legacy" managers has had a better green field in which to develop their product lines. Even they are going to need to figure how to reduce the number of products as it is becoming distracting to a new entrant to the brand to figure out what best serves the buyer.
Will the best mirrorless every catch the best DSLR for predictive autofocus. That's the one feature that keeping some traditional companies arguing internally about keeping the DSLR product lines. For many, the current AF in say the Z50 is sufficient for the entry. So there's a possibility for dropping all the entry level Nikon crop DSLRs. Now Nikon can concentrate on crop mirrorless proper lenses. As we're slimming down, how about Nikon just dropping crop sensor.
Fuji is refusing to take the full frame bait. They've got crop covered and now pseudo MF. There are other ways to skin the DSLR/Mirrorless/MILC logjam. But a voluntary pull out of a major player for (the/whose?) greater good is about as far from capitalism as I've seen.
Others have spoken to Fstoppers objectives in publishing this (IMO) tripe, but the photography community would be hard hit if this were to happen. Is the author looking to punish the Nikon users community?
Nikon has been a dead company operating for a while. Has nothing to do with quality of product, but everything to do with arrogance of management to try and dictate what customers "should" want. They're dead.
Total nonsense from my perspective. Nikon makes very relevant cameras to the type of photography I want to do. Maybe not for the type you want to do. There is no do everything solution. Plus "A jack of all trades is a master of none".
Why pick on Nikon? Canon should man up, step up to the plate, and bow out. The entire model of these camera companies is rubbish- Pushing new body models every two years and expecting people to upgrade. WTF? That model could never be sustained long term as consumers will get wise to its stupidity.
I have ignored F-stoppers for over a year now because the clickbait BS had gotten so bad, but for this I had to log back in just to say, F YOU F STOPPERS!
This article demonstrates a complete lack of understanding of how market competition works, and how "excessive" competitiveness is the only way for those with a smaller budget to ever get a half-decent product.
Keep living in your delusional world of over-priced elitist Canon and Sony products, Mike Smith, while those of us with smaller budgets continue to enjoy the high-quality products that Nikon repeatedly delivers to a better price point than any other brand (beside Pentax, ironically) can compete with.
This is a new low for clickbait, Lee & Patrick. Very sad to see this kind of stuff flying here.
Good grief, you should stop reading stuff that gets you so upset.
If anything the industry suffered because Nikon and Canon were comfortable with their large market share status quo, innovation stagnated. No Nikon should not exit. There are plenty of industries that have a plethora of manufacturers in relatively small markets (boatbuilders for example) and innovation thrives as a result.
Posts like this are bad for the FStoppers brand.
I doubt that Lee or Patrick supports this opinion, but if they do, they need to come out and say so.
I was thinking the exact same thing. Lee and Patrick are too good for this.
True. I believe, Patrick and Lee don't support this opinion. They just need to find a better way of curating articles on this platform.
New low here.
What a stupid article. I just wasted 5 minutes of my life I will never get back.
Is there a way to block Mike Smith ?
The best thing is for Fstoppers to EXIT and quit writing this kind of Rubbish.
Not my normal behavior, visit his website ... you don't have to lose more words. The article is as professional as the pictures. Incredibly bad arguments. Fstoppers, when will a blocking function be introduced?
Edit: That's a good article: https://petapixel.com/2020/08/11/creativity-not-negativity-a-call-for-an...
Your comment made me click that link and I don't like to say negative things about anyone's pictures, but definitely his pictures are sub-par with such unprofessional and pretentious article.
And you made me go to his site too! I wont use him for any of my gig photos.
Where was the option for "I think FStoppers should stop putting out moronic like this one".
Goodness, this article is pure trash. You have no idea what is going on in all the boardrooms of these companies. Al you're doing is speculating. Sure camera sales are down, but Nikon and Canon have operated during periods where sales weren't though the roof. So these are not new circumstances for them. Sure the situation may be different, but they can adjust. Also, don't forget Nikon has a base of users who will want to upgrade to mirrorless or DSLRs. Lastly, for all, you know the bean counters at Sony can decide that their imaging division is not making enough compared to their other divisions and decide to go a different direction and solely focus on making sensors for phones and cameras. The point being is you just don't know. The market will decide if there are too many camera companies not you player.
I would hate to see Nikon exit the camera market. I do believe, however, that they should rationalize their product line. Too many similar cameras, with shades of difference between them. Simplify. Pro vs Consumer Full Frame DSLR, Pro vs Consumer APS-C and Pro vs Consumer Mirrorless. They have 17 different DSLR models and 4 mirrorless! This has always been a problem in the Japanese camera industry, even in the film days.
My concise version. Basically, Mike is trying to say that golden days of Holly trinity are gone by now. And ones (namely Nikon Camera Devision as it seems) who he perceive as not as heavily invested or not too diversified or not too successful should quit for the sake of others and the sake of their own Imaging Devision. For the sake of argument I find such premise acceptable, but whole thesis desired to be developed a bit further. What do you think? Do you agree with my take?
Yeah because that's what every industry needs.....less competition. That's what drives innovation and change... what an awful article.
"Canon and Sony are both too heavily invested, too diversified, and too successful to want to withdraw."
*yet*
"No business is too big to fail, with some failing more spectacularly than others..."
Hmmm...
The fstoppers platform should be ashamed to publish such rubbish articles
Actually this article is quite successful. Look at the engagement numbers. I found it provocative but a bit unsubstantiated.It fails to articulate clearly the major danger of downsizing in shrinking market segment for any corporation with big involvement in business of any kind (factories, people, credits...). Canon an Sony clearly are bigger, but who will be more successful in doing downsizing respecting camera devision is not quite clear. What do you think? (:
PS Full disclosure.I try to be as unbiased as possible, but I own a lot of Nikon equipment... And I wish them success (: Oh well 🤟😎
If the purpose was to piss people off and make them want to stop reading FS articles, then yes, it was quite successful.
Good or bad this article caused an emotional response and chatter which alike yellow press could solidify certain audience. Do you see any alternatives to this site?
Do you measure success purely by engagement? I can get the same engagement saying all puppies should be killed. Come on. Can damage an article like this does to the rep of a good site be considered in your measure of success? Brand bash articles are quickly being considered cliche and a waste of time by the commenters on Fstoppers. Stick to creativity and ideas.
Talks about how digital cameras are complex to manufaxture and then gives Apple as an example. WTF!
utter rubbish...the logic of this article makes no sense at all.
I agree with Mr. Kinser, the article is rubbish, the man has no idea what he is talking about, As a former Army photographer in "nam", I used Nikon S & F back then and now use D850 & Z7 for my professional work. Nikon has never failed me.
It seem that among recent articles on FS, ones who start bashing Nikon attract most attention. (:
No matter what you shoot, more players in the game mean more competition, better products, and lower prices. Arguing that one of the main players should exit because there is too much production is nonsense.
The market is far better equipped than the author to determine the winners and losers. Whoever fails to compete on features and price will be removed from the market by the market, not by a clickbait monger on fstoppers.
Nikon is a very viable part of the market. Yes I am biased somewhat because I own and have owned Nikon cameras, lenses and accessories over the years and they have served me well. I have also owned Canons, Pentax, Kodak, Minolta. Each of them good in there own respect but ultimately Nikon is my go to.
There are so many things in this article that are "less than facts" and more opinion - and when the opinion is rendered one can't help but wonder how this opinion came to be. For example, "Canon and Sony are both too heavily invested, too diversified, and too successful to want to withdraw. That leaves Nikon as the single prime candidate for closing its production line. This would have the benefit of reducing capacity and so competition, allowing a lift in prices and so margins for the sector." First, I'd love to see the data regarding the level of investment compared - and why is that a metric to begin with? Just because a business has invested in something doesn't mean it's successful, or will be successful. There are many businesses that made huge investments only to have them fail. Arguably, Nikon's investments in their Z series products has yielded a successful product line, and clearly they are invested in the future with those products. Rather than take a draconian approach, the camera companies may want to consider ways to reduce their costs, which they seem to be doing anyway. For many businesses going thru transitions, supporting older product lines while transitioning to newer ones can be a costly proposition. What Nikon and the others can do is to EOL (end of life) older products and pour all of their resources into newer ones. Many businesses offer incentives to migrate those customers with older products (full disclosure - I'm a current Nikon DSLR owner with a full complement of lenses, etc.). My sense is that Nikon is already doing this - perhaps they need to accelerate this in order to survive. There are other strategies the companies can pursue as well - perhaps shrinking the number of models.
The draconian move of shutting down a brand such as Nikon solves nothing, and indeed creates a void for a sizable number of users who love that brand.And this article brings little evidence/data to support that argument, but it has generated quite a response, which perhaps may be the author's goal (polarizing articles do draw attention). A more constructive approach might have been an article that explores how to keep the industry alive by adjusting business models, marketing strategies, etc..
Interesting analysis, Barry.
I think the entry level market is dead, and has been completely crushed by smartphones. I think what we will see in the future in the camera industry is a niche market for professionals. Similar to what you see with Snap On or Shure where they specifically target the high end durable professional market. It's smaller, but the equipment is more expensive and durable. I do think Nikon needs to move away from entry level kits, and start focusing on the high end professional gear.
What a Dick!
Nikon owners right now
Click bait. By that logic, Fuji, Panasonic, Ricoh, Olympus, Pentax, Leica and Hasselblad should all exit first. Absurd article.
True except for Fujifilm which is a far bigger imaging business than Nikon or all the others on the list.
And Leica, which has a niche in luxury.
Fstoppers looks like a good website for new photographers but this guy !!! MIKE SMITH !!!! it makes me stop visiting this website! I understand his opinion about Nikon but the title of this article is clickbait !!!!
Have you seen his website?
I've never read such a dumb article. Probably who wrote doesn’t know any other brand than Canon and Sony.
Can't quite decode: "New camera systems abounded, born out of the compact camera boom; they were the perfect antidote to weening a wealthy public on to more expensive systems."
There seems to be no use for 'New camera systems' as an 'antidote' (normally a reference to a remedy for or counteracting agent to poison) to 'weening' (archaism meaning imagining, thinking or supposing) as part of the description of the actions or processes which might move 'a wealthy public on to more expensive systems.'
My guess is that the writer intended or hoped to say something like: 'New camera systems abounded, born out of the compact camera boom: They were the perfect path by which a wealthy public could be introduced to more expensive systems.'
Small article, loads of non senses....
In lists of "best cameras" I rarely see a Canon coming out on top as best camera in either of the categories or price classes, except in the category of "best Canon camera".
So why should it be Nikon folding and exiting the camera market? Canon have other lines of business as well, they can exit the camera market and persist as a company in their other markets.
And for the record, I say this while owning Canon. This must somehow make my random opinion valid.
Ya know....if you pull that stick out of your ass, ya just might feel better. Don't know what Nikon ever did to you to make you feel bitter about them, but I am sure it wasn't personal. It's ok though. They do have creams and salves that can help.