Six opportunities for µ-4/3 cameras and other ILCs to prosper

peterwgallagher

Mu-43 Regular
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Jun 7, 2017
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Oh dear, the CIPA report (http://www.cipa.jp/stats/dc_e.html) for 2020 looks pretty glum and Dr Glum (Northrup) is sure (https://www.43rumors.com/tony-northrup-again-says-mft-is-going-to-die-in-a-couple-of-years/) µ-4/3 is about to crash and burn.

Well, I’m not convinced. Some of the old-guard Japanese industry may be willing for their own reasons (pride? national obligation? company tradition?) to soldier on in the course they set themselves at the dawn of the digital age. But I can think of several much better opportunities that I’m pretty sure the smarter guys in Tokyo and Osaka have already considered. With any luck, they are pursing them or something like them right now.

Here are six reasons for not being pessimistic. What do you think?

1. ILCs are far from over. They are normal goods: as income increases, people buy more ILCs. But shipments are falling because the section of the populations that buys them is continuing to narrow to, e.g., professional image makers and enthusiasts; especially retirees with disposable income. Many commenters on the market fail to recognise that there is a substantial time investment as well as funds investment in ILCs the plays a big part in their current acceptance. We all know the ‘average joe’ market disappeared, mostly for compacts, a few years ago. But so what? In that time we’ve seen the diversity of the ILC market develop wonderfully (Sony stepping up and “taking over”, companies like Hasselblad moving “down”, Sigma moving into innovative niches)

2. Sure, phones are substitutes, not complements, for ILCs. But, despite their rapid adoption by the ‘average joe’ (and many enthusiasts), they are limited substitutes and likely to remain so. Despite the improvement and diversification of lenses on phones, the physical characteristics needed for a phone and the laws of optics tend to militate against perfect, or even good, substitutions for ILCs (although software will continue to narrow the IQ gap a bit). Also, the substitution effect is not fixed: there are certainly complementary aspects of phones/ILCs that have not even been explored by manufacturers (think e.g. of how ILCs could take advantage of range-finding LIDAR on phones). I suspect this is mostly because of the conservative bias of the Japanese camera industry even where a manufacturer is present in both markets (Sony). There is room for some very interesting disruption here, but who knows if we’ll ever see it? It won’t come from Apple or Samsung, I suspect.

3. The real price of substitute “phone” cameras is rising rapidly while the price of ILCs is relatively stable. For example, the OMD EM1 Mark III was introduced in some markets at a nominal price lower than the price of the Mark II at introduction. There is also a much more developed discount market for ILCs since few manufacturers have their own retail chain while ALL phone manufacturers attempt to sell directly or through tightly tied ISP relationships.

4. It seems likely that ILC prices can fall further (in absolute terms and relative to phones) in response to reduced demand without reducing margins proportionately and while improving the consumer offer. Note, for example, that the ILC is a “macro” product with relatively ample space inside the body. It requires clean and expert assembly especially of opto-mechanical parts, but not the level of super-miniaturization and integration of parts required by modern smartphone manufacture. (I'd be surprised if there were not economic opportuities to simplify the manufacture of opto-mechanical parts, too). The ILC is protected, to some extent, from insane pressures of industrial design by the requirement for a product that feels good in the cupped hands of the user and a product that is stable on a tripod. This means manufacturing advances can be aimed more directly at efficiency (cost savings) rather than to leading-edge manufacture and proprietary techniques such as is now the case with smartphone screens and front-camera ‘nooks’, holes and other affordances.

5. The biggest potential advance in the product offer of ILCs has, up to recently, been mostly ignored. ILCs have much better processors than they had just a few years ago. Still, they lag a long way behind phones in the adoption of computational photography. By following the lead of the phone industry in a dramatic improvement of in-camera processing (Olympus OMD EM1-X and EM1-iii show how this can be done with new processors, better firmware: but there is far to go), the ILC manufacturers could — and I predict willtransform their products even without any change in their lens line-up, sensor type or size, or overall body-design. Heat and batteries may be a challenge here (Hassleblad?) but it seems there are plenty of feasible options still to be explored.

6. The camera manufacturers have an opportunity to clean Adobe’s clock if they are clever and nimble (OK, this is seriously open to doubt) by dramatically improving their own processing software. Having balkanised the market with their (unnecessary) proprietary RAW formats, they might as well take full advantage. So far most of them (except Phase One) have made feeble attempts to do so. Olympus makes a slow, clumsy and generally second-rate ‘workspace’. Sigma, for reasons I can’t understand, crippled its innovative Merrill series with unusable software. But, in combination with more advanced processors, a serious and well-funded and researched effort could give them HUGE — perhaps unassailable — IQ and creative advantages over camera-phones. If I were Olympus (I thank the gods I am not) I would try to buy a small but seriously capable software house such as e.g. Iridient or LibRaw and throw plenty of resources at this option (but I bet they don’t have the imagination to do so).
 
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exakta

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Jun 2, 2015
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When I was a kid starting out, ILCs were a niche market...pros and what we now call "enthusiasts".

I've written this before at this forum: Canon was the first to actively mass market their SLRs, starting with the AE-1 in the mid 1970s. Prior to that the "average joe" bought whatever instant loading camera format was current or a Polaroid. People interested in "something better" might choose an auto-exposure 35mm fixed lens RF camera (in the 50s and 60s they also might have chosen a leaf-shutter SLR or a TLR). By 1980 fixed lens autofocus autowinding 35mm cameras were displacing both the 35mm RFs and the instant loaders, whilePolaroid was beginning to fade. Those auto-everything 35s morphed into the digital P&S which is now being displaced by phones.

The day of the ILC as a mass market camera is over. I hate using my phone as a camera, but I do it for the usual reason: I always have it with me when I leave the house (in the house, I can pick up my camera).

This constant discussion about the shrinking market is misplaced, the market should shrink and return to the pre-70s state of only people interested in photography for it's own sake or fans of conspicuous consumption buying ILCs.
 

Carbonman

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I would try to buy a small but seriously capable software house such as e.g. Iridient or LibRaw and throw plenty of resources at this option (but I bet they don’t have the imagination to do so).
OLympus and their competitors may already have contracted some of these companies to develop their software. There has been a lot of collaboration, rebranding and patent swapping behind the scenes in the photography business since the 1970s.
This constant discussion about the shrinking market is misplaced, the market should shrink and return to the pre-70s state of only people interested in photography for it's own sake or fans of conspicuous consumption buying ILCs.
This is what people don't understand about the photography market; the 'boom' in the 1970s was a drop in the bucket when compared to the explosion in the compact and ILC digital camera market from the late 1990s to about 2015. Camera manufacturers can withstand the shrinkage of their product sales volumes and still remain viable as long as the venture capitalists don't strip them of their assets and leave them as debt ridden husks. (This is my major concern for Olympus.)
 

Aristophanes

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Aug 9, 2017
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ILCs have, universally, terrible OSs. The transition from a mobileOS to ILC OS is inscrutable for the average consumer. This reflects the iconographic, inward and rote thinking of Japanese parochial engineering. They don’t like to network and struggle with user-friendly systems. The optical camera industry isn’t the only industry suffering from this paralysis. You see it where the panel industry is pretty much just a base manufacturer now. Automobile software...same. It’s part of a larger discussion across Japanese industry and eduction.
 

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