Canon has just announced its financial results for the third quarter of 2019, and in line with recent performance, the news is not good. For the first time, the report seems to acknowledge that aggressive pricing by its competitors is having an impact.
Canon continues to cite a global economic slowdown, partly as a result of the ongoing friction trade between the U.S. and China, with Europe and China being worst affected. The report states that as a result, “net sales declined 6.2% to 869.5 billion yen, operating profit dropped 43.7% to 38.4 billion yen, and net income fell 42.7% to 26.5 billion yen.”
Notably, and perhaps for the first time, there is a hint that Sony’s aggressive pricing and release cycle might be having an impact. The report mentions “price competition surrounding higher-end full-frame models” as being one of the major factors in falling sales. It explains that the “energy that each manufacturer is putting into this segment” has intensified, and it’s always interesting to try and read the hidden meanings buried in these reports.
Sony certainly positioned itself very aggressively when it released the a7 III last year, with many customers realizing that the a7 line had matured to a point that it was genuinely a viable alternative to their pro and prosumer DSLRs. With adapters ready to help Canon users make the transition, the relatively low price made it an attractive option.
On top of this, Sony has adopted a system of incremental updates across its top-end cameras, offering new models that offer relatively minor upgrades, as seen in the Sony a7R IV. This has had a knock-on effect of pushing down the price of preceding models, such as the a7R III, which is currently available for less than $2,500. Given that this went to market in October 2017 at $3,198 and arguably still offers more than Canon’s EOS R, it’s understandable why Canon might be now feeling the squeeze.
While pro cameras are taking a hit, the report does note that consumer cameras are performing well and that total camera sales for 2019 are still in line with projections.
What are your thoughts? Will we continue to see Canon fighting at the top end of the market? Leave a comment below.