Notwithstanding problems with ramping back up production to pre-COVID levels, manufacturers have been generally optimistic about the emerging camera market as consumers start spending money that has been hoarded over periods of lockdown. Canon looks set to be the big beneficiary, but what about the other manufacturers?
Last year, 2020, was a year to forget for camera manufacturers as shipments of cameras (as recorded by CIPA) imploded from a record low of 15.2 million units in 2019 to a barely believable 8.9 million units. It's not so much the fact that shipments nearly halved, but rather that 10 years previously, camera shipments peaked at an incredible 121 million units. Of course, that isn't an entirely fair comparison, as compact cameras made up some 90% of those shipments; the margin was slim, but spread across a large number of units meant manufacturers made a very healthy profit. The camera world has changed significantly since 2010 with compact cameras now accounting for just 39% of units shipped. Perhaps of more interest to enthusiasts is the dramatic decline in shipments of DSLRs at the expense of increasing mirrorless units. Crucially, 2020 was the first year where more mirrorless cameras were shipped than DSLR. So, how is 2021 shaping up?
If there was a phrase to sum things up then it would be: "not good, but not disastrous." Looking at the monthly CIPA shipments to date (below), 2021 is significantly up on 2020, having reached parity in February. However, that is against a backdrop of a stop in manufacturing as COVID hit. Looking at 2019 is a better comparison, and shipments are down 40%, a significant drop; it is worth noting that we are not back at 2019 production levels yet, though. That said, by May in 2019, shipments were valued at ¥170 billion on a total year's value of ¥587 billion; 2021 is currently sitting at ¥134 billion, a 21% drop. This proportionately smaller reduction reflects three factors: a shift in production away from compact cameras, which now make up only 35% of shipments, the increasing price of cameras, and a shift toward more expensive models.
Perhaps of more interest is the split between DSLRs and mirrorless. Canon and Nikon have the former market sewn up, with Pentax desperately clinging on to whatever is leftover. The latter, however, is a complete free-for-all, as manufacturers battle to establish themselves in this emerging market. Of the 2.3 million interchangeable lens cameras shipped this year, 1.3 million were mirrorless (and 1 million DSLR) meaning that they make up 56% of the market. This compares to 2019 where 3.2 million units had shipped by this point, with 1.4 million mirrorless (and 1.8 million DSLR) making up 43% of the market.
Let those numbers sink in, then read this: mirrorless models make up 71% by value. And even though mirrorless shipments were down by 100,000 units, the value actually rose by 9%. There are some huge takeaways from (nearly) the first half of the year. Firstly, the value and shipments of DSLRs continue to implode. Not only are they shipping in significantly smaller numbers, but they are worth much less than the mirrorless market. DSLRs are rapidly becoming a small (but still important) camera segment. Secondly, ILCs share an increasing proportion of total camera shipments as manufacturers ramp down compact production. Thirdly, mirrorless models are now the single most important segment by volume and value. In fact, they make up 59% of the value of all camera production. The short story is that manufacturers have shifted production to mirrorless, and consumers are buying them. Quite where the balance between consumers wanting them and manufacturers wanting to produce their lies remains to be seen. If you are a camera manufacturer not making mirrorless cameras, then you are in a rapidly contracting market. Pentax, take note.
Canon Shines in the Mirrorless Market
I previously commented on 2020 sales figures and how these align with CIPA shipment figures. Canon was the best performing manufacturer last year. However, we are now halfway through the year. So, how are sales looking? There is limited evidence on this front; however, Nikon Rumors recently reported BCN sales data. As a reminder, BCN Retail reports online and in-store sales data for Japan and is believed to represent some 40-60% of domestic Japanese sales, with Japan accounting for about 15% of worldwide shipments.
In terms of mirrorless sales, Canon is closing the gap on Sony at about 28% and 32% respectively. The big loser has been OM Digital, dropping from over 25% to less than 15% of sales. This has now started to recover, and the brief bump for Fuji sales above 20% appears to be reversing. BCN doesn't report on sales below 10%, and so, Nikon is excluded, a worrying sign. When you switch to all ILC sales figures, Nikon pops back into contention (on the back of those declining DSLR sales) but at a worryingly low 10.9%, beaten by OM Digital at 11.3%, with Sony (25.8%), and Canon (36.8%) leading the pack. In fact, Canon has had an exemplary start to the year at the expense of almost everyone else but particularly Nikon. In short, while DSLR sales continue to drop, Canon is shifting plenty of mirrorless cameras, something which Nikon is struggling to do.
As expected, 2021 is proving to be a pivotal year for manufacturers for a variety of reasons. First and foremost, the DSLR is dead in terms of significant revenue and profit generation. Less than a third comes from DSLRs, and that figure is dropping with each month. In the same way that compact cameras serve a niche, so does the DSLR. The sooner that it becomes a small-scale, low overhead concern, the better for manufacturers. Secondly, rolling out a full suite of mirrorless models while at the same time filling out APS-C and full frame lens lineups is critical. This is where revenue is coming from.
Where does that leave manufacturers? Sony and Canon are both benefiting from the mirrorless pivot and remain highly competitive. Nikon is continuing to produce a range of highly desirable cameras, but for whatever reason, is not selling as many as it needs to; its quarterly report should provide more detail. Olympus has completed its transition to OM Digital in what has been a difficult year that has seen sales drop to low levels. Going forward, it remains to be seen if new management can provide a stable platform for future development. Pentax remains strangely wedded to the DSLR and must surely be cross-subsidized as a loss-making division by Ricoh. Fuji, through all of this, has remained buoyantly successful, quietly filling out its X and GFX lines while also selling an awful lot of Instax cameras and film. Eyes will almost certainly be on Nikon as the camera market continues to evolve.