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New Report States That Only Canon, Nikon, and Sony Will Survive in the Camera Market

Discussion in 'Back Room' started by TPiorkowski, Dec 30, 2013.

  1. TPiorkowski

    TPiorkowski New to Mu-43

    5
    Nov 24, 2013
  2. Gary Ramey

    Gary Ramey Mu-43 Veteran

    240
    Dec 27, 2012
    Aurora Colorado
    I don't see u43 going away and right now there are only 2 players. Olympus and Panasonic have partnered in this venture. While I like Sony's full sized sensor It is pretty clear that M43 is here to stay. Canon and Nikon both have ventured into mirrorless but neither successfully. While smartphones will definitely take a bite out compact camera sales, I think it is a ridiculous assumption to say they're hurting mirrorless. Technology will continue to cut the perceivable gap between M43 and its bigger SLR cousin. Eventually, just like the dinosaur, the SLR will become extinct because of its mechanical mirror. Sony has been, and will continue to be a viable competitor with its line of mirrorless cameras and the recent full frame addition will further chew into SLR sales. IMHO, both Nikon and Canon are more at risk than Olympus. Panasonic could be at risk because its camera's really don't offer any advantages over the Olympus.
     
  3. Wisertime

    Wisertime Mu-43 All-Pro

    Aug 6, 2013
    Philly
    Steve
    Yawn. Opinions. Credit Suisse might have a conflict of interest, so take that with a grain of salt.
     
    • Like Like x 8
  4. madogvelkor

    madogvelkor Mu-43 Top Veteran

    937
    Feb 22, 2013
    Connecticut
    Like Sony, Panasonic can share technology between their camera lines and their video lines. I don't see Panasonic getting out of the camera business unless it is getting out of the video business too.
     
    • Like Like x 1
  5. Ron Evers

    Ron Evers Mu-43 Regular

    Likely as good a prediction as a weather forecast. :rolleyes:
     
    • Like Like x 1
  6. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    There were many competing formats even in the film days, if some of you guys are young enough to remember. Ultimately, it's all about cost, perception and brand loyalty. There is some truth in the article and I agree with it somewhat as I work in this industry so has a clear picture of what it entails.

    There are 2 main disposable income consumers; the well-off baby boomers who want light weight cameras that mimick DSLR performance and functionality and the selfies (the younger iPhone/Android generation) that will become the main income stays for the near future. It is this younger generation of shooters who do not accept the confines of a DSLR, let alone any camera. These folks shoot with iPads and iPhones or adapt a Sony WIFI camera to their iPhones, shoot and post on Facebook. This will only increase in size numbers because as they become older more established their income capacity will grow. And since they are grown up with iPhones as their main camera, they will tend to stick with what they know best.

    The baby boomers are getting older,and soon one by one will be dying off in the pastures so it is not a far fetched analysis when the younger generation will be replacing their main income source (from us) to them that they need to market their products to them.

    Making money is not about maintaining nostalgia. Camera gurus and experts can be up and arms and writing reports stating the contrary. The reality is that, the North American market is dictated by Canon and Nikon and will continue. They have the strong cash flow from established feeder products of mid to low end soccer mom camera kits which btw are the selling points and cash flow for both Canon and Nikon. Despite the Fuji, Olympus and Panasonic, their feeder products are decreasing because people aren't buying them because Canon and Nikon deliver the price point.

    In the camera market today, PRICE is the determining point in any sales.. Just a few days ago, I went to visit a camera store that are having a holiday sales and the customers were actually buying the main brands because of the freebies they get -- like a back pack with free memory card. One of the customers in the store wanted to buy a Fuji mirrorless, but then a Canon DSLR which came as a kit came with a free memory card. The buyer bought the Canon because of that 1 free memory card! Unbelivable, but this is the reality in the camera retail sales landscape and Fuji, Olympus and Panasonic are always like salmon swimming up river!
     
    • Like Like x 1
  7. demiro

    demiro Mu-43 Hall of Famer

    Nov 7, 2010
    The opportunity that exists is to turn some percentage of the young phone-shooters in to photo-geeks (like us), and to sell them cameras and lenses as their disposable income grows. I'm not sure how that can be done, but a big DSLR and a bigger lens doesn't sound like the answer to me. I think a Sony/Olympus and/or Panasonic/Fuji "partnership" of some kind is the best opportunity for success. The consumer electronics part of the puzzle cannot be ignored.
     
  8. Jeff1:1

    Jeff1:1 Mu-43 Regular

    70
    Dec 2, 2013
    Chicago
    ...Nostradamus turns over in grave.
     
    • Like Like x 1
  9. bigal1000

    bigal1000 Mu-43 Veteran

    337
    Sep 10, 2010
    New Hampshire
    I guess this baby boomer better sell his Olympus and go die in a pasture,I find that comment above insulting... bikerhiker
     
    • Like Like x 1
  10. jnewell

    jnewell Mu-43 All-Pro

    Jun 23, 2011
    Boston, MA
    With respect, there is a big risk that the analyst doesn't understand Japanese corporate dynamics. That doesn't mean that the report is wrong, but in Japan, life is more than raw numbers.
     
    • Like Like x 1
  11. Wisertime

    Wisertime Mu-43 All-Pro

    Aug 6, 2013
    Philly
    Steve
    Lmao... thank you.

    Sent from my SAMSUNG-SGH-I747 using Mu-43 mobile app
     
  12. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    Sony already owns a bit of Olympus and Ricoh owns Pentax and both of them were after the medical business of their respective businesses. Again, it's because of the baby boomers -- the demand of medical services will only go up not down. Only their camera divisions are not exactly money makers.

    What's also interesting is that, most of the news agencies had already shed their best award winning photographers in favour of guess what? Young cheap phone or photo shooters, although they had re-hired a few back. The industry today is simply not the same as 10 to 20 years ago and are putting a lot of emphasis of contract work that pay very little.

    Secondly, the economic conditions simply do not justify people owning more than one system compared to say 5 to 10 years where the housing boom and the dot.com boom were making people feel wealthier. This is simply not the case today. Today people with a limited disposable income buy a camera if they need it. They don't want to experiment with a lesser known brand like Olympus. In fact because of the media blitz with the ex-CEO and the fraud case, most people assumes Olympus is bankrupt. Who wants to buy a system who's company is on a brink of bankruptcy? Camera phones are good enough and they would buy a DSLR because, for most reasons, they had started a family and needed a serious camera. The mom wants a camera to document the kids. It's not the same as in the past where photography is a hobby. With today's modern technology, many of things had taken away photography as a hobby. Fewer people are using a camera to create a visual art and are not willing to spend hours with Photoshop to create those special art effects. For most people, it's photo sharing that's a real hobby with minimal photoshopping.

    And this is the problem facing not all Olympus, Sony and Panasonic, but also Canon and Nikon. They too are stuck.
     
  13. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    At the end of the day, you don't get awards and kudos for running a business with a mandate of loosing money. ;)
     
  14. Gary Ramey

    Gary Ramey Mu-43 Veteran

    240
    Dec 27, 2012
    Aurora Colorado
    it is hard to imagine Olympus not making money hand over fist with their line of ILC's. With an expanding line of quality lenses for the product and a solid M43 base, they're not going anywhere. As far as Nikon and Canon go, I suggest you read up a bit on the business. Nikon is not in great shape right now. Canon has yet to make a serious foray into mirrorless cameras which I think is a mistkake. They keep trying to lower the price point of their older APS-C cameras in order to compete. Olympus Imaging is also bolstered, as you mentioned by their medical line.
     
    • Like Like x 1
  15. robbie36

    robbie36 Mu-43 All-Pro

    Sep 25, 2010
    Bangkok
    rob collins
    I think it is a pretty reasonable prediction myself.

    All the camera manufacturers apart from Canon and Nikon are losing money and predicting that they will continue to lose money and remain in business indefinitely doesnt hold much logic.

    There are a lot of problems in the industry.
    1) The compact market is totally collapsing (down 40% this year) and looks to be in terminal decline. Appauling demographics of current buyers point to further sharp declines.
    2) The ILC market appears to have gone ex-growth - both mirrorless and DSLRs will be down around 18% this year. My guess is that this decline is temporary but that the market is unlikely to grow much. There is still growth potential from the new affluent to acquire better cameras. The problem to me is that 1) innovation in the market is slowing and 2) really the innovation has reached a stage that most of the current cameras are good enough for most people. Do people really want a lot more megapixels or even better low light performance? Well probably - but not as much as they were looking for better performance as in the past. That means that an individuals product cycle - the time between new camera purchases - is likely to be longer.

    And all this leaves the smaller camera manufacturers in a very precarious position.

    Sony, Canon and Nikon have 45% of the mirrorless market and 95% of the DSLR market.

    That means the ILC revenues of Olympus, Panasonic, Fuji, Pentax and Samsung combined (as in all added together) is US$2.6bn. Now in 2008, the last year that Olympus's imaging division was profitable - its imaging division had US$3.2bn of revenues. And the salient problem these companies face is that the fixed overheads - the costs of marketing, selling, distributing and servicing these cameras is very high. In Olympus's case it is US$500m a year. Now you cant run 5 lots of overheads on the combined revenues of what was one company 5 years ago.

    Now my guess would be that these companies (or brands) will not simply disappear. What is quite likely is that they will be merged into another company - so Sony could easily acquire Olympus's imaging division and then absorb its revenues under their own marketing, distribution, selling and service cost overhead. In that way you would remove US$500m of cost overhead from the industry.
     
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  16. robbie36

    robbie36 Mu-43 All-Pro

    Sep 25, 2010
    Bangkok
    rob collins
    I would suggest that you read up a bit on the business. Olympus imaging division lost US$250m last year and will lose US$100m this year. Considering its total mirrorless sales this year will be US$420m that really is quite bad. Their gross margin on product is quite good (better than Canon and Nikon) but they dont sell anywhere like enough product to even show the vaguest sign of a possibility of reaching profitability. Nikon and Canon are both in good shape - they are both profitable with strong balance sheets. While you might think that the fact that they havent moved into mirrorless aggressively is a mistake - the simple fact is that no manufacturer of mirrorless has reported a profit in mirrorless ever. Furthermore Nikon has the second highest market share in mirrorless in the US (at c.20% behind Sony) and it isnt even trying.
     
  17. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    Olympus is definitely making money from ILC sales, but overall keeps loosing money. I wouldn't say hand over fist though. ;) Olympus is saddled with a few problems with a big one called "debt" and that eventually to be determined by creditors. The second problem is with the current market conditions. You probably saw a lot of holiday sales going on this year, but what you didn't know is that, camera makers this year SLASHED prices to move excess inventory. There are vast inventory sitting in their respective warehouses of each maker and when you have inventory, it meant that forecast sales were OFF, really off. Canon and Nikon were way off and so where Olympus, Panasonic and Sony, though I think they are not off by much because they had not much inventory to offer to begin with. The economic recovery they hoped happen in 2013 just didn't materialize. Excess inventory needed to be cleared for new 2014 models. And of course slashing prices and dumping kit lenses and a few goodies like bags, flash kits and so forth are just not helping.

    This simply educate the consumer that. It's GOOD to wait for prices will drop, a premise for deflation. You DO NOT want deflation happening on your product line ever.. Olympus isn't helping the case, especially if they are flogging away their PEN lines which I think are somewhat superior than the plastic crap Canon and Nikon are flogging away. But Olympus can't help it. If they don't lower the price, they sit on excess inventory. But if they do lower prices which they did, people will then just wait for Olympus to lower the prices again. That's not conducive to running a profitable business. That's basically running a business with a mandate of loosing more money. If you want a good business model, look at Apple Inc!! They have no problems making money.

    Canon and Nikon's entry into the mirrorless market was hap hazardously and poorly done, though even without trying hard Nikon did pretty well! And look at how Nikon tried to capitalized on the retro market with an overpriced Nikon Df which is basically a D4 sensor in a cheap D610 body with a few dials and expect $3000 for it. Ahhh, who's going to buy that huh? You think a kid will buy that? It is with the high disposable income of the baby boomers. I think it will do well, but Nikon wasn't the one that's doing this retro look rabbit out of the hat kind of trick though.

    One can access the time machine into an era where Pentax was somewhat king of the manual SLR with their ME Super, K1000 and the likes. Then they lagged Minolta, then Nikon and then Canon on their AF technology with their lousy SAFOX system with the SF-1, then SF-10, then PZ-1, PZ-1p and the likes. So desperate where they then that they pulled a rabbit trick out of the hat with, guess what, a Pentax MZ-5. A retro tons of dials camera that actually sold really well. Then the MZ-7, MZ-10 and they even have a MZ-M (a retro manual focus film body with AF peaking assist) and lastly with the MZ-1. A rather fine machine I say. I owned one of that too. Then of course, Pentax lament the fact that digital was just a fad; because they once got burned getting into the video business.
    Oh well, they were wrong and now relegated to the division of Ricoh.

    You and I agree that Nikon is in trouble, but not financially though. When I see Nikon pulling a Nikon Df trick. It's a stop gap measure to resist bleed until they bring out an evolutionary product. They will. They like Canon and everyone else misjudged the DSLR and ILC market. They thought this would last forever, but it didn't. The camera phone market has always taken sales away from them year after year, but the economic downturn hastened camera makers' predicament. What the article simply said is that and if this economic downturn continue its current course unabated that there would only be Canon, Nikon and Sony. And that the strongest and fittest would survive. Now of course, things can change in 2014, but that would mean USA's economy will all of a sudden begin to rise and function again like before the housing boom or even the dot.com boom. If this is a likely scenario, then surely enough there would be enough consumers to have excess disposable income to own more than 1 camera system. But I personally think that 2014 will be equally challenging as 2013.

    The majority of the American household own a DSLR or an ILC and a few lenses. Very few are keeping up with the Joneses now. The holiday sales only garner consumers who are replacing their older or broken camera systems with the new one that has more bling, more freebies etc... There is no brand loyalty like you used to imagine in the good old days. If they are Canon users, and Nikon is cheaper that they'll be a Nikon until the warranty runs out. Then perhaps they jump back. So Olympus and Panasonic are reacting to this and caught on the cross fire and they both can't afford to bleed more.
     
  18. RT_Panther

    RT_Panther Mu-43 Legend

    May 4, 2011
    Texas
    Nikon's success is quite amazing though when you factor in that unlike Olympus, Panasonic, Sony, Samsung, & Canon, they don't have any other huge product divisions to fall back upon (even though Nikon does make prescription eyeglass lenses and range scopes)...
     
  19. robbie36

    robbie36 Mu-43 All-Pro

    Sep 25, 2010
    Bangkok
    rob collins
    Look Olympus is definitely losing money from ILC sales. You cant make up fundamentals. Its ILC sales are US$420m, the SG&A overhead of its imaging division is US$500m - how can it be making money? Olympus has said it needs to sell 1m ILCs a year to reach profitability. Last year it sold 600k, this year they will sell 600k (if they are lucky - considering 250k 1H). The overall business is in fact making money.
     
  20. bikerhiker

    bikerhiker Mu-43 All-Pro

    Dec 24, 2013
    Canada
    David
    You are right. Olympus is loosing money from ILC sales in net profit. In gross sales profit terms, they are making money. Is this fact alone that kept these Japanese guys in Olympus on the "HOPE" mission that some day they will turn a profit.

    I likened them like the NICE guys who let their women treat them like door mats, meal tickets and so forth in the hopes getting laid. Who are the jerks who get laid? Well none other than Canon and Nikon.

    You see that these companies will maintain market share at a loss because they are clinging to hope that one day they will actually make a profit, so they are looking at the wrong picture. They are looking that production wise, they are making money but overall loosing money as with the whole operation. These guys are no different than the Nice Guys trying to get laid and though the girls like that. Nice guys finish last I'm afraid. Sadly the shareholders are the nice guys.