Nikon Just Released Some Terrible Financial Results

Nikon Just Released Some Terrible Financial Results

Nikon has just published its figures for the first half of the 2019 financial year and it’s looking bleak for the Japanese manufacturer.

The company as a whole has reported year-on-year figures that don’t make for pleasant reading for shareholders: revenue is down 13.3% and operating profit has fallen by 42.9%. Profit before income taxes is down by 40.6%.

Nikon is a huge company and readers will be most interested in the performance of its Imaging Products Business. Although there were some reasons to be optimistic — sales of high-end cameras has increased  — year-on-year revenue fell by 21.1% with profits down by 84.7%. As detailed in the report, “Unit sales of full-frame cameras increased mainly in Europe and US” thanks to mirrorless cameras, but a collapse in sales in Asia of DSLRs has had a big impact on revenue and profits.

The company has revised down its forecasts for imaging for the year ending March 31, 2020, acknowledging that it overestimated both the size and its share of the market, and that the “ Shift toward ML cameras and the product mix change in the full-frame category have not been accelerated as expected.” The report doesn’t seem to pull any punches, saying that sales plan for mirrorless cameras was “overestimated,” and the company more broadly suffered from “slow execution on drawn out decision making.”

Also included are plans on how to address the decline. Nikon will “Intensify focus on professional and hobbyist segment” as well as expanding the lens lineup, but perhaps the most significant proposed changes are a restructuring of the Imagine Business Unit and a plan to “Drastically revise the sales strategy.” These are influential as it could see a change in how the slow-moving, cautious, and traditional company approaches the industry, particularly in how it markets its products. 

Within all of these figures, it becomes trickier to understand how the NIKKOR Z 58mm f/0.95 S Noct has come to market. As a halo product, it’s impressive (and in demand, apparently!), but until Nikon broadens its lens lineup for its mirrorless cameras, it seems unlikely to create the sense of prestige around the brand that Nikon is seeking. It seems a bit pointless to demonstrate the ability to create some of the best glass in the world when there’s a significant lack of fast lenses available for professionals.

What are your thoughts? Leave a comment below.

Andy Day's picture

Andy Day is a British photographer and writer living in France. He began photographing parkour in 2003 and has been doing weird things in the city and elsewhere ever since. He's addicted to climbing and owns a fairly useless dog. He has an MA in Sociology & Photography which often makes him ponder what all of this really means.

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I’m a little unclear on what they mean by intensifying focus on professional and hobbiest markets...what else is there? The only other category I can think of is maybe “Enthusiast”? I’m not trying to be sarcastic, just trying to sort out what they’re planning on focusing on (or focusing Away from).

Isn't that what they teach in business schools? If you cannot clearly define your focus or market you lose. I think you are spot on in your assessment.

I kind of see "hobbyist" and "enthusiast" as basically the same. You're right...what else is there?

I disagree. A hobbyist is going to buy a camera that allows them to enjoy their hobby. The lower price DSL/Mirrorless the better (Z50) with the kit lenses.

An ENTHUSIAST buys the best they can possibly buy. Z5/Z6/Z7 with Far nicer glass.

Currently I have a z6, 14-30 f4.0, 24-70 f4. I still have several lenses on my list.
Enthusiasts love the gear and the action of taking good photographs.
A hobbyist loves the action of taking good photographs.

Its the difference between consumer grade gear, and PROsumer grade gear....
Just my opinion.

PS I love Nikon.

PPS, I know I just resurrected the thread, my bad.... X-D

Perhaps they mean the casual customer that buys a camera to have at birthday parties and sports events for their kids. They aren't in to photography like a hobbyist would be, they just want a camera for the family.

Other than hobby and pro they have industrial, medical and other imaging customers

Ahhh yes, the hobbyist medical practitioner! ;)

I don't know exactly either. Maybe dropping some of their consumer point and shoots? I'm not sure where the line is between "hobbyist" and just a regular consumer. Maybe less focus on their D3xxx line and more on higher-end DSLRs and mirrorless? I'm not sure either.

Nikon makes and maintains the etching harddrive heads for Seagate that's not going anywhere soon..

What I mean is they are apart of the industrial processes where they etch the silicone wafer. I'd say these machines still make a lot of money per unit. But not a volume process.

I seen these machines in Seagate Derry where they use them to make the harddrive heads. Layers of chemicals thick .04 and thin .02 microns layers.

I think they mean focusing on potential buyers for higher-end products - people that are willing to pay more than entry level prices. I think a large proportion of sales has traditionally come from entry level DSLRs in the past and that trend may be changing. I'd expect more of a focus on full frame cameras and less investment on the bottom end of the market.

I remember when Nikon had an endless number of Coolpix cameras, probably lost that market to iphones.

Yeah, that seems like a safe bet. Phones are demolishing the casual needs for a dedicated camera.

"professional" spends lots of money on gear for paying clients

"hobbiest" Spends the same amount of money on gear to take photos of his kids and on vacation.

Its their way of saying the market is limited and they need to get more of the shrinking market.


Although sales numbers are dismal (as is the case for every manufacturer in the camera industry) I have admired the majority of Nikon’s moves leading into the mirrorless era. I love my D5 and have enjoyed using the Z7, and I’m happy I can use my old lenses. All of my colleagues using Canon are frustrated with their new offerings and are now considering Sony cameras. Interesting times.

Agreed. I love what Nikon did with the Z series and I love the lenses they've released so far. I don't care that there aren't any f/1.4 or 1.2 lenses, as if that's somehow what defines "professional."

Also, EVERYONE has experienced declining sales and profits from what I can recall from recent reports. Canon and Sony were also both down.

It's not like Nikon is the only one that dipped.

A fellow friend and tog - Christopher Dodds Photography, who was a Canon ambassador and big user of their product, dumped them and went with the full Sony line. He loves the high shutter burst speeds for his nature imagery, and not having to fine tune the sensor on his tellys like he had to do with his former DSLR.

For an upgrade in camera bodies last year, I compared the D850 to the Z7, and decided to purchase the D850 - the price was better, and there were more features that worked for me in the type of imagery I was doing. Plus having to buy an adapter for the Z7 to use my existing extensive lens lineup was a non-starter.

Like others have mentioned here, the iPhone and other recent model smartphones, has decimated the low end DSLR & mirrorless market for casual and amateur picture takers. I have an iPhone 7plus, and marvel at the 4k video performance I can achieve using Filmic Pro, with features not available on my Nikon DSLR's. Should be interesting to see what new rabbits Nikon can pull out of its hat.

Frederic in Montréal.

I guess I'd better sell up and buy whatever is most popular and profitable brand then.

I thought your portfolio looked great Rob until I realized how unprofitable your camera brand is. Better get cracking a new portfolio with a profitable camera brand ASAP. /s

I was just thinking about Nikon after reading the Olympus rumour. The Z system was a roll of the dice.

Nikon has been around for ages. Nikon will make the adjustments needed like they have with every market shift prior. I think the P&S market is really taken a hit due to phone camera quality for all brands.

Agreed. I think their P&S market will probably go (and it really should). They don't really make any great P&S cameras (the Coolpix A was the last one that was good and it was overpriced compared to the Ricoh GR).

Probably. On the other hand, I'm sure people said the same thing about Kodak.

Should I worry, should I panic or should I not even care. The later, that's what I'll do. I don't have stock in this industry and I don't need new lenses all the time. No need to cry for big corporations that won't go away any time soon.

Like I've said before, dump the entry-level and focus on the pro and enthusiasts. Nikon, Canon etc should look into either making smartphones with a more photocentric spin or license/partner with one of the smartphone manufacturers for entry-level and, steer them up into their respective systems. Entry-level dedicated cameras both DSLR and mirror less and dead if not rapidly dying

I'd be fascinated to see a tie-up between Samsung and Nikon. Samsung could bring the user interface design skills that come from being in the phone market and Nikon could bring the optics.

Me too. I think these companies are missing the point by not seeing what's pretty much obvious. Partner up with these smartphone makers or release one of their own and use that as a entry-level gateway into their systems. This is where photography is starting for a lot of people and growing.

Nikon Z 70-200 f2.8? Bueller?

Exactly! I waited for Canon and Nikon to enter the mirrorless market with a bang. Instead, they entered with a whimper and I went out and bought A7RIII & A7III with a bunch of lenses. This could have been Nikon or Canon's money. I am happy with Sony, a few things about the interface bug me, but the images I'm producing now do not lie, best keeper rate I ever had. Amazing photo-taking devices. We will know better next round how they do, however, I think the Canon R cameras show more promise than Nikon.

well, technically, for nikon, it's their 2nd try....don't forget '1'

Alexander - That is a false straw-man argument. Sony was pioneering/developing the technology with generations 1 through 3. When Nikon went to make their first FF mirrorless, they just cobbled many off the shelf components from Sony - EVF, Imaging processors, Image Sensor, AF tech and much more. They basically just cobbled together a bunch of parts from other manufacturers. As such, Nikons efforts are a joke in comparison...

The benefits of a dedicated camera and lens are shrinking by the day for the average person as software replaces hardware. The companies that are left will need to figure out a way to survive... Too many forks, not enough pie.

Their customer service on repairs is also abysmal. I recently bought a 24-70s 2.8 for my z7, but unlike past experiences this wasn’t filled with resent and trepidation as I seriously contemplated jumping to Sony. Regardless of financial loss, Sony is hungry and hustling while Nikon operates in “slow execution on drawn out decision making”. Hope my investment was not foolish.

Step it up Nikon

If I recall correctly, Canon and Sony and Fuji have all experienced declining sales and profits this year. Maybe not to the extent of Nikon (don't have the numbers here), but everyone was down this year.

Nikon will readjust and continue forward. Always have.

Canon's sales were down dramatically (down more than anyone) if i remember correctly.

They were down dramatically, yeah. I think Sony and (maybe) Fuji experienced the least dip. But Sony still dipped more than anticipated.

So, yeah, not like Nikon is the lone wolf suffering in the wilderness here.

(sorry, double post...)

There are too many cooks in the kitchen for slrs. Everyone has a cellphone in their pocket and we've seen more images of the world than we have ever seen ever before. Maybe that's it, no saving photography, we don't need to capture more because we've seen it all.

In the short term, my future camera better be able to process more in camera like a cell phone, otherwise there is no need to buy a new one until the sensor is miles better than my previous one. Even then that's a luxury since editing can make up for a lot of shortcomings.

By the time sensors improve dramatically imagine where computational photography (cp) will be. Sensors haven't changed much in the last 5 years but look what's happened in the cp arena....

With quality like this, who needs a DSLR. Just use that amazing phone camera! Amazing iphone 11!

Aniston -- who will appear in AppleTV+'s "The Morning Show," was reportedly gifted an iPhone 11 -- as were other stars who'll appear in the streamer's original content.

That's really funny.

What Sony did right and Nikon did wrong was Sony designed sensors and sold them to Nikon and others. Sony also built their own cameras using their own sensors and also sold their sensors to phone makers. That's what Nikon should have done utilizing their branding in a partnership build.

These days, while software and color science is one thing, the sensor is a pretty big part of what makes the camera. Not to mention bolstering the bottom line.

sony sensor and camera division are two different companies. but i do notice that nikon feels more like a sony sensor in a nikon body with its own software. i do think the Z mount is a plus over the Sony mount.

Also remember that Sony has muuuch more resources to draw from. Sony is an electronics and entertainment corporation while Nikon is an optical imaging company.

Sony was making large sensors (and selling them to Nikon) well before it started making DSLRs. However, I think Sony learned from Kodak's mistakes. Kodak made sensors, and digital imaging hardware, but not cameras, and they were edged out when Nikon and Canon introduced their own DSLRs with the D1 and 1D. Sony buying Konica Minolta's camera division is probably a big part of what allowed them to stay relevant here and eventually become a significant player.

Nikon is not a sensor manufacturer. They could have maybe gained some revenue by Leica-like consulting and branding, but I'm not sure their name carries the cachet of Leica or Zeiss. I think the suggestion above, about partnering with a sensor fabrication company, makes sense. Samsung, would be one option. Maybe ON Semi, who bought Aptina? Panasonic is already tied up with Leica and Sigma. Sony really does dominate the sensor fabrication business, though. Probably the better plan is for them to look at all the things they did right with the D800 series and bring that back to the Z cameras. Also look at the things Sony has done wrong (slow to provide pro-level bodies, minimal in their efforts to retain A mount shooters, still lagging in flash and strobe support, not all in on videographer support)... Panasonic seems to be filling that last niche, but there are a lot of things that Nikon knows how to do that they could be doing to win and keep customers with the Z cameras.

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