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

Adam Ottke's picture

I think a much more interesting deal would be a separation of their imaging business and/or major investment akin to the DJI/Hasselblad deal. Imagine that... Wouldn't be a bad way to go to get all kinds of great tech and merge the future and past to create a whole new beast of an imaging company.

Ansel Spear's picture

I made these comments on a web site a few days ago. I was almost laughed out of town. Given today's news, I rest my case...

It's no wonder that we keep hearing reports that Nikon's profits are on the decline. It seems to have completely lost its focus on which market it wants to target.

It has an eye-watering 14 Coolpix models on the market in the UK (a sector that is in freefall due to the advance of the smartphone), together with 8 DX DSLR cameras, a clutch of premium point-and-shoot and, finally, the semi/pro range of about 5 models.

To the average punter buying his/her first DSLR, to be presented with such an arbitrary choice of specs and bizarrely haphazard nomenclature must surely lead to utter confusion.

I would imagine that if the DSLR range was consolidated - and half were consigned to the scrapheap, not one potential punter would feel there wasn't enough choice,

Upon visiting Nikon's webpage, the headline feature is currently it's range of action cams - a market so dominated by the GoPro, that I'm convinced it's really lost its way.

Professionals have to drill down further and further to get to the pro section.

I'd love to know Nikon's vision of the future. It does seem rather scattergun at present, targeting neither one market nor the other.

Ciaran McGrenera's picture

+10 to this. I'm a supermarket buyer, and one of the key things that makes any range successful is to keep it focused and reduce duplication.

Yep. That has always been a strength for Apple. Focusing on a much smaller range of products drastically cuts costs and allows for much better focus on quality for the remaining products. Most camera makers today are guilty of having far too many cameras in the market.

Rob Mynard's picture

Agreed, hopefully the news that there are dropping some of their compacts is indicative that they are moving in the right direction. The D750 and D500 showed they're wiling to try new things with their line and was a good move that I think probably sold very well for them, but focusing on the action market might come at a loss in the end like the Panasonic HX-A1 (a great camera lost in a crowded market).
Having said that if companies didn't try to move into other markets we'd still all be shooting Kodak, the question is whether CaNikon can move fast enough to avoid Kodaks fate.

It seems to me that Nikon's mirrorless gear is not up to par with the likes of Fuji and Sony etc. so their enthusiasts sector sales are reliant on optical viewfinder cameras which people are switching away from.

Anonymous's picture

Reading the report it's not the photo business bleeding more than other industry players, but the lithography and meteorology, plus the decline of consumer camera segment.

A clueless company out of touch with the market. I've been waiting to check out the new Nikon DL line. How long has it been delayed now? Over a year? And now they are canceling them. A highly anticipated product line.That's why Sony could sell the top RX100 for $1000, and why it will now be able to continue doing so. Crazy.

A shame.

Anonymous's picture

Apparently details are overrated when you can simply look at the headline and use it as an excuse to complain.

Nikon is somewhat smaller and less diversified than some of their competitors (Canon, Panasonic, and Sony) and when another part of their business is down, it has a much bigger impact on them than other players.

Also, according to the related press release, they ran into a major technical issue with their DL series cameras and that delay has now led to them being cancelled due to the other areas of Nikon's business.

Anonymous's picture

Sony and canon are battling it out...all the rest are trying to survive by securing a niche...Nikon has its pro segment, but beyond that hasn't kept pace with the times...I really wonder if anyone is making money as results get lost in opacity of financial engineering ..add to that where factories are located vis a vis weather caused supply issues...

Anonymous's picture

*Insert obligatory Canon vs. Nikon joke here. Share hearty laugh and slap leaping high-fives*

Kyle Medina's picture

I really liked the DL series. Welp too bad.

Eric Lefebvre's picture

Damn, I'm a Canon shooter and I was excited about the DL line. That DL 24-85 looked like a really nice compromise.

Travis Alex's picture

Did anyone talk about the fact that Nikon slugged by investing all the energy and time into those key Mission action cameras, which were flawed from the start?

I'm blown away that Nikon executives saw that that was the future of the company, and poured so many resources in marketing campaigns into pushing those action cameras out the door, instead of focusing on making the mirrorless technology better and pushing those more.

360 videography is new, and in my opinion, a massively gimmicky at this time, that has not caught on enough yet (and may never fully catch the way its projected too).

It's clear to see that mirrorless technology cameras have been the buzz of the photography world for the last three to four years, and the tech specs consumers have been demanding more and more, especially since Sony released the second generation of the A7 line series cameras. It was staring them in the face, and they still didnt do anything.

I'm sorry, and people can respectfully disagree in the other as much as they like, Nikon did this themselves. Its a hard lesson to learn. Sure, we can debate the earthquake played a factor in production lines and costs, but you have to admit, it boggles the mind.

A few have remarked about "listening to customers" . . . something Nikon stopped doing decades ago. While the pro market is not the lion's share of their profit, it is the banner that allows them to market to the masses. Because Nikon has for decades run its business with an holier than thou attitude, it got stomped by Canon, in innovation, and most importantly for the working photog, service. Nikon has a horrible reputation for service, with the exception of its paid "ambassadors".

Kodak did the same with its "we are god attitude" and lost a substantial share of its market to Ilford (black and white), and Fuji (transparency film).

I am slowly upgrading and replacing my gear. The dslr is next on my list and while I don't like taking a financial bath, I do value service over any other attribute allowing equal quality. Canon, Sony, or Fuji are the only choices with Canon coming first . . . Nikon hasn't been in the game for years . . . so in all likelihood, I, like thousands of other working pros will dump some decent gear and be done with a company that believes they know it all.

I have shot with Nikon for decades, before that Canon . . . I will be relieved to go back. Lenses are not a question mark . . . Zeiss serves either, and I still have Sinar and Hasselblad for real quality

Nikon, Canon, Sony, Fuji, it doesn't matter. Since the smartphone and apps making poor photos looks good. The writing has been on the wall, Only pros need big cameras and only a few people want compacts. I love how everyone is all of a sudden is a business and marketing genius and says what Nikon should and should-not do. This year is there 100 year anniversary as a company, so they have been doing something right! I am just hoping the clowns jump ship, flood the market with used gear and I score myself a cheap D5/D810 and awesome glass.

As I Nikon Owner, I have been complaining about their old-school type of management for years, from high pricing, to very incremental upgrades and completely ignoring that 4K is a wanted feature. ironically, during their heyday, they were the first to offer Full HD, 24MP with good DR and uncompressed HDMI out. From there, their ego got the best of themselves while the competition zoomed past. Here's a thought Nikon, listen to your customers and take serious note of what they have to say in forums!

The impact of micro four thirds and mirrorless has cut deeply into market share. Nikon have a new range of cameras due and their colaboration with Kodak on the new RGBW sensor has been clouded by a rumour they may again turn to Sony for the new camera Here in the UK and Parts of Europe Panasonic, olympus Fuji and Richo/Pentax are cutting deeply into both Nikon and Cannons margins. As for Sony. Look where their profits come from... not cameras

I think its logical for Nikon to lose battle. Even my phone has focus peeking and my DSLR - not? How that can be happpening? OMFG

Fritz John Asuro's picture

You're happy now you Canon fan boy? My beloved Nikon will be soon gone! T.T

Okay jokes aside, I hope Nikon pick up themselves sooner. The times has changed and technology is pushing the boundaries of photography. They need to start to innovate and "be Nikon". As of the moment, they have been hard headed with a very confusing business plan.
I really can't switch to another camera brand yet (for my preferred brand).

Jason Lorette's picture

While I don't think this is bad as it sounds it is telling that a company that's been around this long cannot rest on it's laurels in its anniversary year.

I was so excited when the D500 came out, then I saw the price tag of $2700 (CDN)...just for the body before tax, and thus I'm still using my D7100. When I bought my 70-200mm I wanted the 2.8 so badly, but opted for the f4...which was literally $1000 cheaper and half the weight!

Last year I bought my first non-Nikon lens (which I was sure I'd never do), a Sigma ART 18-35mm 1.8 and it is hardly off my camera, it's a fantastic lens. The comparible Nikon 17-35mm, is again $1000 more and only 2.8.

I'm drooling over some of the other ART lenses, and the rumored 135mm has me excited...funny thing is, I'm not even looking at Nikon lenses anymore or at least not near as much. I still want the body, but the lenses are overpriced in many cases or simply not as good.

Nikon (and Canon too) need to wake up and look around, they are not breaking the mold and leading the way as much any more and there are companies out there that are making better products that pair with theirs...and essentially make their offerings better.