What Does the Future Hold for the Camera Manufacturer?

What Does the Future Hold for the Camera Manufacturer?

The film era was a cash cow, with cameras being high-precision instruments from specialist manufacturers and because they used film that needed developing and printing, a huge service sector that surrounded it. From the 1960s onward, the sector innovated and grew at breakneck speed. And then, it fell apart. Is that about to happen for digital?

There is some despondency over the fortunes of camera manufacturers, and that is understandable — the 2000s were a golden age of production, with over 120 million cameras shipping in 2010 (below). That figure dropped to a rather dismal 9 million units last year. The numbers speak for themselves, and the winner is undoubtedly the smartphone.

However, the picture is a little more nuanced, as the vast proportion of those 120 million were made up of low-value compact cameras, hardly the doyen of the sector. DSLRs and later MILCs are where innovation, value, and profit are to be found. Even at their peak, ILCs shipped some 20 million units (below), although this is now down to a more sobering 6 million but still shows some strength in the market and undoubtedly fierce competition as the moderate pool of manufacturers chase a decreasing number of consumers.

The Film Era

That said, the "digital despondency" of today is predicated on the the success of film in the 20th century, so marrying up CIPA shipment data from that era is instructive in understanding where we are now. The graph below shows a similar boom in film camera shipments that we have seen in the digital era. This was initially for focal plane shutter cameras (aka high end), subsequently followed by a peak in "shutter" (consumer-oriented) cameras. Perhaps surprisingly, the pro market (excluding the low-level trickle of medium format) peaked around 1980 at around 7.5 million units; however, the truly remarkable achievement was the 230B¥ in value this generated (not adjusted for inflation). The sales of units gradually rose, but their value spiked during an intense period of innovation, in part a result of the continued rise of Japanese manufacturers and the integration of electrical components into cameras. It is also likely a period during which there was an increasing number of consumers, greater wealth in the consumer market, and a general rise in prices. In short, there were increasing numbers of higher-value units, which is very similar to what we are seeing with mirrorless sales currently.

The 1980s was when the consumer market really took off, eventually peaking at over 32 million units and nearly 280B¥, enjoying 20 years of financial success for camera and film manufacturers. It's no surprise that Kodak and Fuji were hugely successful during this period. However, the speed of collapse was rapid, going into freefall from 1998 to virtually nothing by 2006. Of course, the reason for the sudden demise of a whole industry was the digital camera, except this time, shipments blew past 3 million in a matter of four years, eventually peaking at 120 million. Of course, the digital camera had been around a lot longer than the 1999 date that CIPA records start at, with the Fuji DS-1P ushering in the era as the first fully digital camera. Kodak was notable for leading the charge in developing the DSLR, working with both Nikon and Canon; however, it was Nikon that beat everyone to the punch with the D1 in 1999. That hides the fact that most camera manufacturers were successfully making compact and bridge cameras throughout the 1990s, which is what the success of the 2000s was built upon.

What Will the Future Hold?

What is fascinating looking at the demise of the digital camera is that it mimics the collapse of film camera sales. Back in 1998, the rug was literally pulled from under the feet of the film camera market, along with film manufacturing, developing, and printing. For an industry that had been around for about 100 years, the end was quick. The digital camera replaced it, and while there were some new manufacturers, many updated their product lines to reflect consumer demand, except this time, the market was bigger. Much bigger. By 2008, shipment value was at nearly 2,200B¥, nearly 1 times larger than the film camera peak of 1998. Although camera manufacturers enjoyed boom times, the replacement for the standalone digital camera had already arrived in the form of the smartphone. Camera shipments again imploded with ILCs now at the same level as the pre-1980s.

The driver for these dramatic changes in the photographic industry resulted from the success of photography and democratization of the image. It was only by the 1980s that the camera was cheap and simple enough for anyone to own, with the scale of developing and printing making costs relatively low. Digital cameras have simply continued that trend by making images easier to capture and distribute, and the underlying reason has been technical innovation. The digital camera has perhaps inevitably been the successor to the film camera. Innovation has also been key in the miniaturization and integration of cameras into smartphones. The consumers who bought film cameras in the 1980s and digital cameras in the 2000s are now buying smartphones.

Perhaps the burning question is: what is the next "big thing" for camera manufacturers? There is no obvious replacement technology waiting in the wings to take over from the digital camera, so what are the options for manufacturers? Firstly, there will always be demand for professional and semi-professional cameras; it will just be much smaller than in the past, with sub-5 million units annually seeming likely. Secondly, no volume manufacturer solely makes cameras, perhaps with the exception now of Olympus, and are diversified across other markets. Panasonic, Fuji, Ricoh, and Sony are all large corporations with vested interests elsewhere, with Canon similar, although more focused on the imaging and printing sectors. Nikon's greater reliance on imaging has made it vulnerable, but it too is broadening the scope of its divisions. Thirdly, film is profitable. Profits in Fuji's imaging division are driven by their Instax film business, with Canon and Polaroid enjoying revival in this area. Fourthly, it's worth remembering that cameras are in smartphones, something that camera manufacturers have seemingly been able to exploit to their advantage. We are seeing further collaborations between smartphone and camera manufacturers; however, greater R&D into the camera miniaturization, computational photography, and operating system/firmware integration are still in their early stages.

How can manufactures leverage their expertise going forward?

Lead image compesite courtesy of RobVanDerMeijden and Capri23auto via Pixabay, used under Creative Commons.

Mike Smith's picture

Mike Smith is a professional wedding and portrait photographer and writer based in London, UK.

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For some unknown reason...I feel this whole thing will come full circle.

I keep being amazed at how sensitive some people are. If that is how you took how I feel on a subject then I guess we can all accept your profound words of wisdom as truth. Thank you mr. Pan da.

First of all...it is...mr. Pan da. Not mr. Bear. Second....I am so sorry if my comment caused you such a major crisis. I'll be more mindful in the future so I don't interrupt your psychotic episode. Have no idea what all the gibberish is about, coming from someone who absolutely does not know me. Perhaps a futile attempt to bring me to ire. But after Vietnam I have a new motto...
If it's not life-threatening
It's not a problem.
Therefore....you are definitely NOT a problem.

Ok. Now you've belittled me and made me feel bad. I am SO ashamed and embarrassed. There, feel better now? Oh...i HAVE heard that people do use corn cobs to wipe their ass, but you have to remember to remove it. Have no idea what brought you to such a low, base type of conversation and really have NO idea why you ever commented at all. Is your life that boring? Must be. When someone becomes useless, everything after that is boring. What the hell is with you anyway? Do I appeal to you that much? If so....forget it. Stick with your pets and your wife....whatever his name is.
My God...what an absolute loser. As for Vietnam....now you've shown your true intelligence. As a former POW I can assure that if you had one iota of what went on over there, how they tortured me and especially what they did to little children, you would never have pressed a key to make such low-class statements. What a complete loser.

Oh, I see that you do this all the time because America gives you the right. Now I feel better. You're not just a loser. Your also an asshole. Ok. I can live with that. You can now feel free to spew anything you like. I just consider the source....and laugh.

Have a wonderful life sir.

That's not a good one son. The ALC must not be paying you very well, but not to worry. You might get there eventually. Stick that nose in there deeper. The world is watching.

Tim, grammar please, it's 'you're an asshole', not 'your', UGH!

Yeah...I'm sorry. When in a state excitement one tends to lose what is important.

Vietnam 1964-1974 not so good in those dark days of napalm and domino theories? Another foolish venture ending in defeat.

What gives you the right to call that person and idiot? If you were speaking face to face would you have done the same? Is this something you do often to other?

Thank you sir. Seems like some people have nothing better to do than write insane gibberish like this. Have no idea what made this 'guy' go psycho, but then who knows what's in the minds of the insane. I just made a comment based on what I felt. Why would that be so sensitive to anyone is far beyond my comprehension. Anyway, thank you sir and have a nice day.

Don't worry Tim, Pan daBear is having her monthly!

Sorry, spastic finger, corrected.

See what we're dealing with? His monthly apparently lasts a whole month.

12 months of whole month monthlies. LOL.

Wow wow we have some jews/arabs level of conflict here.

Hey, you know what? With all this commotion (in your head) I forgot to ask a vital question....mr. dabear. Are you a scary bear or a cute, cuddly bear? We already know you're a grumpy, mean bear, but we were all wondering if you're cuddly and cute or just your standard old mean and grumpy one. It doesn't really matter anymore because I am bored with you. Go pester someone else now. Oh....and ALC is the company you work for....Assholes and Losers Corporation. Your comments are both mundane and inane. I am done with you

A Grizzly bear.

Yeah. It's time to move on. Thanks for the support. I will continue to comment on things I choose to. We should also stop feeding this creature the things he looks for......idiocy.

Now go collect your prize...in your anus

You win??? Awe....now I understand. You're sick. I'm am sorry if I triggered an episode for you. Ok...you win. I hope that will calm you down. Bye now.

Sadly, if you look at the sales chart, it pretty much has come full circle. The volume of serious camera sales today is higher than in the 70s, but lower than peaks in the 80s, driven both by consumer expansion and new AE and then AF tech before we got to the golden goose of early digital.

In the 70s, you mostly bought a camera when new to the market, expanding your kit, or replacing a broken unit. Tech moved slow.. the origonal Nikon F was sold new gor like 14 years. It was ten years between my Olympus OM-1 and OM-4, an addition, not a replacement.

Early digital, like any emerging tech market, barely did the job, cost beaucoup bucks, and was probably obsoleted in a year or two. So early adopters when through 3, 5, 8+ cameras in a short time. Today, not so much. I have nearly 10 year old digitals that, while not as full of bells and whistles as my 2020 gear, really do still make fine images.

Without a huge new innovation as a disruptive force -- like AE, AF, digital -- we are cirvling gavk to the 70s, I think. That coukd work, but it does not mesh with the idea of annual/semiannual model ugrades.

Yeah...it pretty much looks that way. I wonder what the next 'thing' will be in the future. Just when you think we've gone as far as we can...something new pops up

Film's demise was caused by digital, and digital is being eaten by it's own children (phones). Most sales are driven by people who just want to capture a moment, be it with friends or in a place, or a selfie, and phones do that better than any other type of digital camera. And their instant and, more importantly, integrated connection to social media and the ability to tweak and share closes the loop. So I would change my initial statement to be: film was eaten by digital image making, and that was eaten by digital image creating, manipulating and sharing devices. But like film, digital image making devices are not "gone" just not what the "masses" are looking seeking. They have moved from popular, the the realm of enthusiast only. The bump was when they were the only way to capture reasonable digital images, but cameras in phones have more than made up for the quality gap for most consumer uses. What we have left is our photo enthusiasts and pros that perceive, or actually need a level of quality or unique equipment (high quality zooms, tilt-shift, etc) that phones do not afford (and even that gap is closing for many purposes). The industry is shrinking, and will continue to do so as the quality of images from phones, and the capability gap shrinks.

Correct. But i don't think cell phones take better photos than cameras. They're just more convenient. The quality is definitely good though.

With few differences between these smartphones and with camera IQ being that now determinate like how ram and memory size, it can only get better. Also the rising cost of newer dedicated cameras, it's only going to be harder for anyone to justify that investment lenses and all when their smartphone can take a pic, have editing app right there to tweak and share with whomever all in the matter of minutes with as of today good IQ and tomorrow better IQ

If you look at a DNG/Raw files from a Smartphone, you’ll see the files fall apart very easily even if conditions aren’t that challenging. If Camera makers change the firmware on cameras to have the same computational ability as a smartphone, then they’ll make them much more friendly to those who only want to shoot JPEG.

I wouldn't even call them more convenient, they're an ergonomic nightmare in actual use. But it's un your pocket and it's connected to the world.

".... they're an ergonomic nightmare in actual use." Amen and amen!

I don't think they take "better" photos either, and probably never will, but their audience doesn't care. Any bounce in quality is just bonus points for that audience. It is the people who do care about that quality gap that are keeping the camera industry alive, you know, the people who read this blog. And a good chunk of that audience can see the appeal of the camera in your pocket.

Smartphone don't likely take better photos than most of us, engaging our photographically-trained brains with modern "real camera" gear. But in the hands of a true beginner, the smartphone actually does take better photos, because the smartphone IS pretty much taking the photos. Not the photographer. The smartphone offers an AI version of a photographer's brain to anyone who picks it up.

Take the iPhone. When you are running the camera app, it's shooting and storing photos in a circular RAM buffer, a bit like Olympus ProCapture but alternating between correct and under exposures. Wben you press the shutter icon, you're telling the phone to stop. An AI then picks the best two photo set and proceesd to do an HDR merge. Unless the luiht is low, then it uses all eight photos. If the light is reall .low, the button press takes one long photo to help the AI that figures out pleasing -- not necessarily accurate -- color for the low light photo. Additional AI and computational engines do your raw to JPEG or HEIF conversion. In short, other than basic composition, the phone does it all.

All that software is running, not on a xamera processor, but a snartphone SOC faster tgan your PC was five yeaes ago, with a nerual/AI processor possibly faster than your PC's tensor processing speed today.

This is part of the problem. Back in film days, you had to master your starter canera to get better photos, technically, not just artistically. That learning translated to that first good camera, first system camera, etc. But a novice with an iPhone might learn aspects of composition, but they will not learn anything else useful for a jump to some much better (in our hands as photographers) camera. In fact, that shiny new system camera will likely set them back in terms of the technical quality of photos they capture with that new system versus the phone.

This is no surprise. Apple reportedly has 800 people working on their canera tech. Samsung and others are probably in the same league if not more (particularly Samsung, given they design sensors, they dob't just buy fron Sony).

As they raise the cost of equipment to make up for the loss in sales, in the long term buyers may decide to add a few more years to their next purchase. It's hard to tell what the future will be but sales could drop even faster when most people have made the switch to ML.

So many camera companies gone with the wind like Rolleiflex Minox Contax-Yashica Minolta Konica Mamiya and Bronica was to be expected given the consumer market being so fickle. The rapid rise of the Japanese Yen changed everything after 1990. The future will be a test of resolve for the Japanese companies as to how long they can maintain profits. There is a global market for consumer cameras but not if the prices keep going-up; like now. With that said the next question: if the Chinese decide to step-in to save an ailing Japanese camera company; as with HASSELBLAD of Sweden. Like US hedge fund saving LEICA a company that has nine lives?

Nikon itself has said that its imaging future is in selling pro and enthusiast-level bodies at far higher average prices than the point-and-shoot and entry-level DSLRs that padded their profits in the aughts and early 2010s. They can sell far fewer $2500 MILC bodies with much higher margins than a $500 DSLR kit, and then sell that MILC buyer another $5K in lenses. That's the way forward, because the bottom end of the market is gone, happily shooting away with their iPhones.

Another article not worth reading.

What do you recommend....War and Peace for a short read?

Also read Straw Dogs by John Gray with quotes from Nietzsche Heidegger and Hegel. Karl Marx mentioned which will deter Americans from reading this book of philosophy and hope for mankind.

Take a good hard objective look at the comments here. Why on Earth would anyone want to be a part of this community?

Crap like this makes me hope the whole industry folds.

Such a pity that people take things so seriously. The world is a total mess with new wars every day. But all people like to do is complain about the weather and websites. Oh dear....