Nikon Experiences 'Extraordinary Losses,' Will Restructure Company

Nikon Experiences 'Extraordinary Losses,' Will Restructure Company

Nikon recently released a set of reports detailing severe financial difficulties for the camera company. As a result, they will be cancelling the release of a new line of premium compact cameras and the company will undergo major restructuring in an attempt to make it profitable again.

The reports (released today) indicate that the company recorded "extraordinary" losses of approximately $263 million mostly due to inventory write-off and write-downs over a span of nine months in their semiconductor lithography section, with overall losses totaling approximately $465 million. Though this is not directly due to their photography business, their revised financial forecast for the fiscal year ending March 31, 2017 notes:

Regarding the consolidated financial forecast for the year ending March 31, 2017, despite the continuous boom in sales of FPD Lithography Systems in the Precision Equipment Business, consolidated operating income as a whole is expected to fall below the previous forecast, impacted by the sluggish and shrinking markets of digital cameras in the Imaging Products Business and industrial metrology equipments in the Instruments Business.

As such, the company is cancelling the release of their DL series of compact cameras and will undergo "fundamental company-wide restructuring in order to enhance our ability to generate profits and create value." While it's unsurprising to hear of decreasing camera sales, particularly in the compact market, where cell phones have essentially pushed the point-and-shoot to the brink of existence, one would hope that Nikon will be able to recover successfully and continue to fill the needs of many photographers who rely on their gear. 

[via Nikon Rumors]

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51 Comments

Joseph Anthony's picture

I am no expert, and I am sure it is more complicated then I would be privy to understand, but it seems, like with many "Name Brands" that the time comes when just having the name "Canon" or "Nikon" does not carry the same weight it once did. Will be interested to see how they adjust, to see what changes they make in the photography department.

Adam Ottke's picture

The nature of technology is such that those who first pioneer that technology will hold the lead for quite some time. But eventually, everyone else will catch up. Eventually, fast autofocus isn't only a Nikon or Canon game... And I think this is exactly what's happening today. Everyone has low-noice, high-ISO sensors (whether from Sony or elsewhere). Everyone has great autofocus. Everyone has great overall image quality.

At this point, it comes down to listening to customers needs and implementing the features customers really want/need at an appropriate price-point with a simplified product lineup that makes sense for two or three target markets. The sad part is that it's really not that hard to listen to your customers...unless you think you know better...

Canon and Nikon became lazy through arrogance and conceit. Meanwhile Sony, Fujifilm and others had no problem seeing the future. Unfortunately the same arrogance and conceit is starting to affect Sony. For example, the fantastic a6X00 line has no decent compact zooms for them. Ridiculous.

I think Sony is given too much credit for their impact on the camera market. Prior to the E-Mount, Sony had +/-15% Market Share by selling the A-Mount. I believe their share over the last 2-3 years has hovered around that number for the E-Mount with basically no share going to the A-Mount. So, all they did was keep the same percentage of the market, but sell them something different.
Now... it remains to be seen what will happen now that the A77II and A99II are out. But I wouldn't be shocked if those cameras impact the overall market in a negligible way.
Meanwhile, Nikon has lost market share and Canon has gained it.
Fuji is so small as to not matter unless lumped with other manufacturers (Panasonic, Olympus, Sigma, etc.).

Sony never had 15% of the market with A mount. It was typically 7-8%. It hit 10% with the launch of the a900. That was such a tremendous base iso shooter..... and that OVF was so nice.

Spy Black's picture

I think this news just looks worse than it actually is. It's corporate restructuring, and Nikon's photographic market is not in any worse shape than that of most of the industry.

Hopefully Nikon is simply putting the "bad news" out first. CP+ is 10 days away, and I think we'll probably see some interesting things there from Nikon. In light of this bad news, Nikon is going to have to come up with something enticing to make up for it. They may be holding out until their summer anniversary to pull out some bigger surprises, but CP+ is really big, and Nikon right now needs to wow it's customer base.

Reginald Walton's picture

Seems to me that they want to increase sales volume, lower the price of some the way overpriced products. For example, that $2700 70-200 f/2.8 lens. Yes I know it's supposed to be a fantastic lens, but if you only market the thing to the professional photographer (who may get a stipend from their employer), then you squeeze out the hobby enthusiasts and therefore, much lower sales. I shoot both Canon and Nikon and I love the D810, but the Canon lenses (to me) are far better and much more affordable.

Sigma lenses are even more affordable and often better.

Reginald Walton's picture

I would agree that Sigma lenses are more affordable that both Nikon and Canon, but not necessarily better, maybe on par with them, but not better (at least not "often).

The reviews of their Art series often so show them to be better. Sigma was recently crowned with having the highest rated lens, over the previous leader from Zeiss.

Yes, but most reviews (actually all what I saw for Canon) are reporting inconsistent AF performance. So they can be the sharpest lenses in the universe if they cannot nail the focus consistently...

That's not what I've read and sales of their lenses continue to grow, along with their reputation for now making the best value and in some cases even the best performing lenses.

Nick Murden's picture

Funnily enough, I'm a hobby photographer, and I have acquired the Sigma 35, 50 and 85mm lenses. They're unbelievable performers, once calibrated. I even sold my Canon f1.2 50mm because I just stopped using it.

Is that done with that docking device that comes with those lenses?

The two Sigma DPMs I use have tremendously sharp lenses, and coupled with the Foveon sensors, produces by far the most detailed images from any digital camera made for the area of sensor and pixels offered.

Nick Murden's picture

I can absolutely believe it. I didn't use the docking I actually did it manually via in-camera. I was a sucker for the red-ring, but these Art lenses have shown me not to make assumptions about brand. I've also seen them running out of stock quickly, so I think others have realised this.

I was curious because I am not familiar how all that works on newer and more capable cameras. The last SLR I owned was a film one back in the film days. :)

Rob Mynard's picture

As with any reviews you read, you have to go in with a grain of scepticism. I shoot a number of Sigma art lenses now, in a couple of instances I've sold my copy of the "name-brand" lens when the Sigma has proven itself to outperform them in both IQ and focus accuracy. I also work for a high end Camera store and can attest to selling a lot of Sigma lenses with no higher rate of returns or faults over CaNikon. In fact nearly all of the pro and semi-pro photographers who work for our company now shot at least one of teh art series lenses. Sometimes I feel these "focus issue" are being spread by scared CaNikon employees or perhaps camera store employees working on commission and wanting the bigger sale. :-)

That depends HEAVILY on how you define "better". Sharper across the frame? Ok, they may be better. More consistent (or even AS consistent) focus? Not better. Weather sealed? Not better. I'm a sharpness junkie and even I realize that the sharpness-obsession is getting ridiculous. That combined with a DXO mentality where all aspects of a piece of gear's performance can be boiled down to a single number (or adjective like "better") is really harming our objectivity.

The primary criteria for lens quality has always been sharpness, and likely always will be. Sigma was recently crowned king in that department. And considering how so many people, serious amateurs and professionals, are buying Sigma Art lenses and are continuing to buy more and more different models as they come out, other aspects of quality don't seem to be an issue.

Weather sealed is not a question of better in this case since none of the Sigma Art lenses are weather sealed, as far as I recall, though they may be weather resistant. I believe that is also the case for Canon L lenses.

Sigma keeps hitting it out of the park. Got to give credit where credit is due. They are now easily the most impressive photo company in the business. And they look like they keep getting better and better. I own a couple of their Sigma DPM cameras and I have never had an issue with them. They also deliver by far the most impressive image quality for the number of pixels they provide than any other camera in existence.

The primary criteria for reviewing lens quality has always been sharpness, since it's easily quantifiable.

For a professional, or even amateur photographer, sharpness is just one part of the equation.

Look at the Samyang 135mm f2. It's on par with the Zeiss 135mm f2 APO in terms of sharpness, one of the sharpest lenses in existence. Yet how many pros shoot with the much softer (though still good) Canon 135mm f2 instead? Most of them.

Despite the Samyang being sharper and cheaper, it has no autofocus. That makes it useless for many photographers.

Now, let's say a Sigma lens autofocuses properly 80% of the time, whereas a Canon or Nikon lens autofocuses properly 95% of the time. But the Sigma's 10% sharper. Which lens do you buy? If you're shooting landscapes or commercial work where you can take several shots of the same subject, the Sigma's the better lens. If you're shooting weddings, sports, or wildlife where you only get one shot at capturing the moment, you'll sacrifice some sharpness in order to have better odds of nailing the shot.

How about other factors, like coma and distortion? Well, an astrophotographer cares about coma more than sharpness, up to a point. An architectural or landscape photographer cares about distortion more than sharpness, to a point.

So while sharpness is a factor, the sharpest lens is not always the best lens for everyone. And I love Sigma lenses, I own a couple. Some Sigma lenses are very fast to focus and more accurate than competitors. But all those factors matter, and often matter more than sharpness to the typical photographer.

Of course there are other things that some people might consider important but the fact remains, sharpness is the most important criteria. Always has been.

I mean, I guess - like if the lens can't resolve any detail, it's pretty useless for 99.99% of shots. But we can look at numerous examples where a difference in sharpness is less important than other factors. Once a lens is sharp enough, other things like AF accuracy and speed are far more important for most photographers. Of course, when you get to 98% vs 99% AF accuracy, then maybe a 10% boost in sharpness becomes more worthwhile. But to say that sharpness is the most important factor without a long list of exemptions is simply false.

Relax, a generalization doesn't equal all.

lol... I love how you wrote "sharpness is the most important criteria. Always has been." In my mind, this statement leaves absolutely ZERO wiggle room. Then you reply "Relax, a generalization doesn't equal all."

I said "the most important criteria." That does not equal the only critieria. If you are still confused then look up the definition of the word most. It's very simple, most does not equal all.

Oh hey! Look everyone! We've resorted to insults of someone's intelligence! Must be time for me to bow out and leave you to your opinions.

Nikon, which is fairly niche as a brand, probably tried to be too many things to too many people. They're similar to Olympus in that regard. Nikon professional cameras are competitive with the best Canon cameras for still photography. Their flash system is still probably the best of all TTL flashes in existence. Although, I don't actually know if they've rolled the radio transmitter in like Canon did. In terms of exposure control, Nikon has superior TTL even if it's still using infrared spectrum for multiple flash control.

Where Nikon has shot themselves in the foot is in DSLR based video. The handicapping of the iris control during video capture is a significant pain. Any feature that Canon has excluded from their DSLR for video capture is something Nikon should grab onto and exploit. Video is their best opportunity for growth and viability whether they like it or not.

A merger or coordinated effort with either Panasonic or Fuji would help their chances. Perhaps Nikon would have to be acquired by either of those corporations or even Sony.

You're asserting that the number 2 brand (in terms of Market Share) in the ILC business is niche? And you're suggesting a merger with companies which have less than 5% market share? (Panasonic or Fuji)
C'mon man...

Well, look what Fiat has in its portfolio.

Fiat, Lancia, Alfa Romeo, Maserati, Ferrari, Abarth, Chrysler, Dodge, Jeep... Yep, a merger could make sense!