Nikon Is Cautiously Optimistic: Sales and Profit Up, Record Numbers of Mirrorless Cameras Sold

Nikon Is Cautiously Optimistic: Sales and Profit Up, Record Numbers of Mirrorless Cameras Sold

Nikon has just released their latest financial results, which make for mixed reading and a bumpy road still ahead for them. It's not all bad news, so how will 2021 look for them?

The financial impact of COVID-19 on 2020 will be considered by many an annus horribilis, with the business world severely stunted. For photography manufacturers, it has most certainly caused significant pain, but I'd argue that for Nikon that accolade goes to 2019 when it first truly began implementing its pivot to mirrorless cameras. It's clear that DSLR sales are plunging, with mirrorless selling more units for the first time. Nikon's 2018 move to mirrorless has meant trying to replace DSLR sales with mirrorless sales, but when you don't have anything to go on, releasing a new system and — more importantly — lens lineup is difficult. Nikkei's report on 2019 mirrorless sales suggests that Nikon wasn't nearly as successful as it needed to be. This is backed up by similar results on the domestic front. In short, income from DSLRs continues a long term downward trend, but sales in mirrorless are not making up for the shortfall. There is some serious restructuring going on: closing Chinese factories, shuttering compact camera production, and shifting manufacturing to Thailand. Nikon can't seem to escape from the bottom line — there is not enough money coming in for the costs it is accruing, and the importance of camera sales to the overall business exposes it to significant financial risk.

There are great expectations with every quarterly financial return Nikon files, as they give more insight into how they are performing. The second quarter again showed low sales and income (¥110.9B) along with large losses (¥23.1B). That said, Imaging sales had actually increased by 56% on the previous quarter (¥25B to ¥39B), and most of the hit was taken by impairment losses (asset depreciation), making the Imaging Division largely profit neutral. So, what was the third quarter like?

Revenue increased to ¥150.6B with a surplus of ¥9.9B, which equates to a 36% increase quarter on quarter and remarkably is the same as 2019, all of which goes to show how bad 2019 was for Nikon. The Imaging Division saw revenue increase again to ¥52B and is now profit neutral. This is down from the ¥70B in 2019, perhaps not as low as might have been expected; that drop has largely been made up by better performance from the Precision Equipment Division. Of more interest is how many units they are actually shipping and, of those, what proportion are made up of compact, DSLR, and mirrorless cameras. Sadly, that level of detail is unavailable, and we can only see the ILC/compact split at 280,000 and 80,000 respectively, along with 470,000 lenses. That's compared to 580,000 and 230,000 last year, and 950,000 lenses. Given that the global CIPA shipment data for this same period is running at about 75% of last year, this is not a great performance from Nikon, which seems to have halved sales, bar compact cameras, which have all but ceased. We know that most of Nikon's sales come from DSLRs; however, the key question remains as to the performance of its mirrorless models. Their financial report blithely states "record quarterly sales for mirrorless cameras." However, this is from a very low bar on the back of having more models on the market. The financials show Nikon is heading in the right direction, but it remains to be seen how well its mirrorless models are performing against fierce competition from Canon and Sony.

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14 Comments

David Pavlich's picture

Not out of the woods by a long shot, but certainly encouraging.

jim hughes's picture

Seems like it's become a "thing" to promote a detailed and complicated theory of why Nikon is doomed.

How many here remember when it was Microsoft spiralling down the drain to certain death because they just didn't "get it" anymore?

Herco le Fevre's picture

or Apple around 1995? I wish I'd bought some Apple shares back then ;-)

Khalid Faraj Al Wdhaihi's picture

Nikon will rise and is now reinstating its policy to confront the fierce competitor Sony, who has changed the direction of the camera to the mirrorless

Rick Rizza's picture

Best of luck to Nikon. I hope they become the giant again and will never parish for generations ahead.

barry cash's picture

I hope they make it Nikon was always a leader in photography

Jim Tincher's picture

This is old information, a lot of things hit them all at once.... Nikon's projections are to return to profit in April of this year.

Lawrence Huber's picture

Consumers today want "Sizzle" as well as amazing AF.
As of right now Nikon mirrorless offers nether like Sony and Canon offer.
Yes they can, I am sure, change that problem but that means really dropping the F products and getting some Sony sensor technology into their mirrorless cameras.

John Kelsey's picture

Baloney....

jim hughes's picture

There's always a segment of a market that can be sold "sizzle" but they're never the entire market.

James Redondo's picture

Every Nikon mirrorless (save the APS-C Z50) has a Sony sensor. And Z AF concerns are grossly overblown by the bloviators on YouTube who complain for clicks.

Robby Pedrica's picture

The consistent barrage of negative press from influencers and media has surely had some effect on Nikon. Even this article barely acknowledges that there may be light ahead considering that Nikon's restructuring and write-off costs (impairments) are included in the latest results. What's interesting is that Nikon has done very well with the Z*ii series in 4th quarter of 2020 which is not reflected yet in financial reporting so the next report may have more positive news. Also, many Westerners are unaware of how Japanese corporate structures operate, the upshot of which is that Nikon is unlikely to be let go of without a fight, and various stakeholders would commit to assisting Nikon back to a financial positive. Having Nikon in the market is a positive for everyone, not just Nikon, so everyone involved from press to consumers, and partners to influence peddlers should get onboard with making sure that Nikon returns to health. Losing a significant player in the market does no one any good.

Nacona Nix's picture

The problem Nikon has, it seems to me, is that for new users opting into the market for a prosumer or professional camera, there's no value added for choosing Nikon over any other brand--Sony and Canon in particular. Sony has a huge mirrorless lens collection now and seems to be mostly leading the technology push. Canon still has dual pixel auotfocus and a reputation for color science, addition to a growing and excellent collection of pro lenses. With Fujifilm and Panasonic and others putting up good fights on multiple fronts, too, I wonder, what makes a person choose Nikon in 2021? Their DSLR bodies had the reputation for being rugged tanks for outdoor, adventure, and journalist work of all kinds, but I'm not so sure that's the case for their mirrorless offerings.

Are there any relatively new first-time camera buyers who chose Nikon over the competition? If so I'd be curious to know what was the deciding factor.

Jason Savelsberg's picture

Not a first time camera buyer, but I chose Nikon when I finally chose to go full frame and leave Fujifilm.

I liked the size, feel and dynamic range of the Z7, but the biggest draw for me was the lenses. The quality of the professional Z lenses is second to none. I got the 24-70mm 2.8 and the 14-24mm 2.8, and those lenses just blow the competition away.

I also got a lens that nobody else makes the equivalent of, and that is the F mount 300mm Phase Fresnel. So for me (and others I know) the deciding factor was lens quality.