I disagree here. Not about the fact that ILC manufacturers have all but abandoned APS-C, MFT and everything SLR but that was not because smartphones have eaten sales of ILC:s below $1500€. It happened because camera companies intentionally made a decision to allocate their entire marketing and R&D budget for $2000€ plus mirrorless FF systems.
Those inexpensive (below $1500 ILC:s) don't sell because manufacturers don't even want customers to know about their existence, let alone spend marketing dollars on them. Manufacturers actively steer their customers towards mirrorless FF from other systems. That's why sales of other formats drop.
In reality there's no way a smartphone could compete against even 900€ Panasonic G9 in any foreseeable future so it is IMHO extremely shortsighted for manufacturers to create ridiculously high entry barriers into "real" camera world by marketing only mirrorless FF systems where even a basic kit is priced north of $3000€
With up to date sensor technology and latest FW/algorithms MFT cameras and lenses would be able to provide again an IQ that is for most (new) ILC users virtually equal to FF but at half the price which is absolutely mandatory for ILC market to grow instead of imploding back to 35mm film era levels.
Even more serious self-delusion is to think that since 5 million 35mm ILC cameras were able to support N manufacturers in the analog film world, that would be the case today too. In reality profits were supported by 15-35 million other (pocket) film cameras which were sold annually during 1980's and 1990's but these camera types were killed by smartphones. Also R&D costs were pretty low because back in the day cameras were still about mechanics and somewhat electronics.
Now the bulk of R&D investment goes to FW/SW and costs have skyrocketed at the same time when manufacturers get revenue from ILC:s only. The same thing happened in the mobile phone world when efficiency in HW design and manufacturing became almost irrelevant after high end turned into smartphones where the cost of SW and applications exploded and companies who once ruled the market like Nokia ended up in "others" category almost overnight.
Same AI and computational photography algorithms which are currently developed for smartphones will dictate the survivors of ILC market as well but not all current manufacturers will be around to see that day. ILC manufacturers are IMHO going into entirely wrong direction if they believe that they could compete against the power of SW/AI with just physically larger sensor instead of maximizing the IQ that they could get out of those less expensive and compact formats.
Of course Panasonic and Canikony went to FF and Fuji to MF for the bulk of their R&D and marketing. The sales data over a decade showed smartphones eating into ILC sales relentlessly from the low-end. Nikon even marketed the Nikon 1 having a dedicated button on the camera for near instant wi-fi transfer to smartphones.
Didn’t work.
People were simply not going to spend $$ on *both* a smartphone and an ILC. The latter still didn’t have good enough connectivity, still required additional, bulky lenses, still needed organized home PC processing, and still used idiosyncratic control systems and software. Any marketing effort competing against smartphones ran straight into those difficulties and Japan Inc. couldn't overcome the combined steep learning curve and convenience barriers. They focused (literally) on the markets that needed no marketing: big glass and big sensors. They all did so despite fierce competition between themselves because the dedicated camera industry is a dinosaur of proprietary little interfaces and software and connectivity, each brand a world unto itself. An industry that organized JPEG still cannot organize a standard chipset and camera OS.
Olympus has had dedicated YouTube Olympus PEN and OM-D channels for years in multiple languages driving home the better IQ than smartphone message, to only tens of thousands of views:
By contrast, a single smartphone camera ad will generate millions of views:
The dedicated camera companies have no ammunition to fight back against the smartphones. Their in-board processors don’t have the system-on-a-chip like Pixel Visual Core to compete given Google and poured billions of $ into their development. Smartphone chipsets run circles around anything Japan Inc. can produce or code and put into dedicated cameras.
m43 doesn’t have any cost advantage over FF given its small market share for silicon economies of scale. There is zero capacity for the smaller sensor to have any tech advantage save for buffer/heat/bandwidth and some IBIS. The industry is coalescing around FF because it delivers volume silicon that always corrals higher margins. The saving grace is the $1999 MSRP for the new Sony, as this gives breathing space to smaller sensors. If we start seeing the $1000 FF price wars....
There is simply no way to compete with the smartphone onslaught by R&D and marketing if budgets are 0.01% of Silicon Valley. Every camera manufacturer, like Sigma, speaks the same tune of retreating to higher-end, optically driven, systems of a core, dedicated camera market. They really don’t have a choice.
A decade ago I could stand by my kids’ soccer games and 1 in 5 parents used a DSLR, usually an APS-C D5xxx or similar. After a game we would all share photos and some video. 5 years later it was all smartphones and all video or the after game still photo. They could process and post clips while on the sidelines whereas the dedicated camera crowd had so many extra steps to get to the image consumption phase it wasn’t worth the extra effort and cost. If dedicated cameras cannot remove those barriers, they won’t sell, not to that crowd, the soccer parent.
The inherent design of ILCs limits their market reach in a smartphone camera world. It’s not a marketing or tech problem: it goes back to the scalar issue where the cost to increase IQ and creative opportunities through optics and analogue controls adds complexity and cost beyond what the average consumer will pay for what are effectively day-to-day snapshots. That’s why the market is contracting back to film era volumes.
