No Guts, No Glory

Found Remembrance
Rouge River, Ontario. May, 2015
Taken with an iPhone 6+

It’s no secret that the camera industry is in poor health. Sales are down. Each Quarter’s numbers from the major manufacturers in Japan show a continuing erosion in both units sales and profits. A few years ago it was just in the compact camera segment. Now it includes DSLRs.

As but one example, Nikon’s 2015 financial results shows year-over-year sales to be down 15%, while income is down 12%. To quote from the company’s latest financial report (May, 2015). “Digital camera ― interchangeable lens type and interchangeable lens did not reach the forecasted volume and sales fell short of achieving the revised forecast“.

Canon is no better off. In Q4, 2014 it was reported that “Canon’s imaging business saw its operating profit fall 6.2% year-on-year“. Other companies results are mixed, notably with Sony and Fuji’s imaging activities being better than analyst’s expectations, though still nothing to write home about.

Of course, it’s camera sales that are down, not the number of pictures taken. Indeed a recent industry estimate reports that there are 1.8 billion images upload to the Internet each day! That’s just upload, not actually taken. It boggles the mind.

But of course these photos are mostly taken with smartphones. Smartphone’s with built-in cameras had sales of one billion units world-wide for the last year for which there are solid figures – 2013. One can only imagine what 2014 was like.There are now more than 2 billion smartphones in use worldwide with the number projected to double over the next few years. This is out of a total world population of about 7 billion. In other words, within a year or so half the human race will have smartphones, almost all of which have built-in cameras.

So – enough mind bending numbers. The situation is clear to most of us, but with the only ones with their heads clearly stuck deep in the sand being the major camera makers. Just look at what most of them are doing; producing cameras with little in the way of real innovation to attract new customers or entice current ones. Some occasional “new chrome and better bumpers”, as one major company’s product manager once complained to me.

In the meantime camera phones are gaining high megapixel count sensors, better lenses, and even raw mode.

If you were running Canon or Nikon’s camera division what would you do? I’ll tell you what I would do – I’d realize that history is moving in only one direction, and that direction does not include increasing camera sales unless action is taken. (The ghost of Kodak is watching those who ignore reality).

What to do then? I would realize that the smartphone has won, and that salvation for my company and product line lies with specialization and differentiation, and with offering those photographers who are seeking a superior picture-taking experience truly differentiated and therefore desirable products.

The Big Two are, in my view, failing at this. Nikon seems asleep at the wheel, and Canon’s only recent innovation, their 51MP 5Ds, appears to have laid an egg – at least in terms of initial customer excitement. Dealers with whom I’ve spoken recently, in both the U.S. and Canada, report that preliminary interest in this camera seems quite modest. A curious situation, since we’ve had ever-increasing megapixels touted as must have’s. The reality is, few photographers actually need high pixel count cameras, and as the digital revolution nears its closing days, most photographers have discovered that unless they make very large exhibition prints, more than 24-36MP simply isn’t necessary. Better high ISO, more dynamic range and the like are always welcome. But, more megapixels no longer are as appealing as they once were.

Which brings us to the two companies that look like they know what they’re doing – Sony and Fuji.

I want to focus on Sony, because the rumour mill has been rife all spring with the expectation of a new camera to augment the A7 series. Will this be a 50+ megapixel model? Will it have in-body stabilization like the A7 MKII? Will it have 4K video like the A7s, but with in-camera recording this time.

Thinking what I would do if I were Sony – seeing that Nikon and Canon are on the metaphorical ropes, and that my (Sony’s) sales and market share is increasing steadily, is that I would blow the entire wad on a new super-high-end model. Hit the marketplace with the whole enchilada – 36-50MP, in-body sensor stabilization, and 4K video with in-body recording. Kick the competition hard while they’re down with an updated 7 series body. Mirrorless is now 50% of the interchangeable lens camera market in Asia, and growing steadily elsewhere. Sony is in a position of strength in this segment. Capitalize on it, now!

With some recent new G series and Zeiss branded FE glass from Sony, along with Zeiss’ own exciting new Batis lens line, Sony is primed. Introduce a no-holds-bared high-end FE mount model and the community of serious (non-smartphone) photographers will reach into their wallets. Take half measures and dole out the features slowly over time, and Sony will give Nikon and Canon time to breath (if they still are doing so). In other words – wearing my marketing hat, I’d say – hit them hard with all barrels – now.

Is that what will happen? We’ll likely know some time this summer.

In the meantime, it’s a lovely spring morning and I’m heading out to enjoy the warmth and the sunshine. What camera will I be carrying? None. Ahh, sorry, actually, my iPhone 6+ will be in my pocket.

Michael Reichmann
Toronto. May 19, 2015

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