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#611 The Monday Post (26 June, 2017) Where is our industry going?
By philberphoto | Monday Post
By philberphoto | Monday Post
Where is our industry going? Sales have started falling off a cliff some years back, and give no signs of recovery. Indeed, smartphones are getting better with time, whereas mass-market compact cameras are not, so the trend is unlikely to reverse itself.
What triggered my thinking is this post, from Mirrorlessrumors: Trouble at Ricoh
Ricoh, in the camera world, is a established player in compact cameras. Among them, the highly regarded GR, with a 28mm fixed lens. Then they bought Pentax, so they also field entries in the DSLR market (APS-C and medium format, with the 645Z). Together, they released the well-received FF DSLR K-1. They also have the small-size- interchangeable-lens-mirrorless cameras called Q.
All in all, well-regarded products but with a limited following, in a marketplace that is crumbling. Is that enough to survive? Even more, is it to our advantage that they survive? Basically, despite the sharp sales fall, only one player has, so far, decided to give up. Ironically, it is the largest and richest of all, Samsung. All others are, for now, hanging on.
Should we, as customers, be happy to see others fold, potentially leaving existing users out in the cold (typically, people who have recently invested in pentax K-1 or 645Z), but bringing a mesure of stabiliity back to the remaining players?
Or should we be happy to see each competitor pursue whatever path they can so that we have the greatest level of choice and competition?
For (extreme) example, does the photo world need 4 “smaller MF” systems (Leica, Pentax, Hasselblad, Fuji)?
Now I don’t want this to sound like I am happy for others to lose their preferred supplier (and investment) so that mine can prosper, but the question does matter IMHO. This because an industry fragmented well beyond the economical optimum translates into higher prices and less R&D spending for everyone.
So, tell me what you think….
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Difficult topic – lets have a look back at 2 factors which the industry has neglected:
1) User experience and the changing demand
2) there has been little effort to grow a new generation of customers for various reasons
Ad 1) R&D deficiencies of the industry & model cycles
Canikon thought that a touch screen was not a ‘professional feature’ or its integration would lead to a decline in sales in top end models – even Sony refused to put it in FF models till the A9 showed up. Same issue with Fuji: either the fabulous XT 2 with a durable body w/o touchscreen or the XT 20 vice versa. Every – even cheap – smart phone has it, every tablet and even my (high-end) notebook ! This denial of a megatrend is critical.
Olympus/Panasonic did their research, coming up with many useful new features (e.g. GX8 with flexible EVF, focus stacking, live bulb in the new Olympus models a.s.o.). Still they count on very small sensors (my taste, that is – and after trying micro 4/3 I sent the camera back as I was used to a much more natural, film like appearance of the photos from my Canon.
Instead of pumping out new models with hardly any changes (think of Canon’s bloated 18 MPix DSLR range during the last 8 vears – and still going with the EOS 1200/1300), less frequent but more substantial changes would have helped, keeping manufacturing cost and prices down to attract new customers.
The interest in a brand and its products also depends on the market expectancy of model changes. Sony did that mistake with the Nex and A7 series in the beginning, pumping out new models every year or so. Quick depreciation of a product holds back investment into it. On the other hand, price jumps like we have seen (e.g. from EOS 5 D II via III to IV doubling) hasn’t helped either. The same is true for Sony. If you compare the A9 with a Leica SL, the LEICA is incredible value for money.
2) As the customer base for high value camera/lens business is shrinking (ageing/saturated/small improvements), it would have been wise to grow a new base, not to drop into the same hole as the stamp collectors market. Fortunately there are a couple of initiatives like at Photokina or at some of the photo festivals, which create some interest among young people. And there is this great blog, which is a pleasure to read for anyone truly interested in photography/creativity.
Anything that helps stabilising the market will be of advantage for everyone – the industry players, the consumers and the pros, in order to keep variety in terms of brands and their R&D going.
I hope that Pentax will remain. Their K 1, the 645 and now the KP are all over average and show that it is possible to launch advanced products – even with comparatively small market shares at very attractive price point. To say it bluntly – the recommended retail prices of an A7rII, an A9, an A99 II or a 5DMk IV are rip offs …
To sum it up, a lot of the problems of the market are home-made by the players themselves. We can only hope that the current trend will get into turn-around mode and that the current olygopole will remain as it is or even attract new players for niche products.
I agree that one real problem is the lack of efforts to grow a new customer base. There are many blogs, video channels etc. around that deal with photography, however many focus on really highend gear and are nitpicking on minor flaws of various products. Or even if some bloggers show off how to create stunning images with old gear, they often have professional models to go along or they shot at unique locations that most people won’t have access to. And the camera companies usually focus on the ‘new essential’ features of their latest gear.
For someone new and potentially interested in photography it must feel almost devestating and I can see how they could easily get the impression you need to spend thousands to get into this hobby and have fun.
Creating enjoyable content for young people that teaches them how to create good photos with very limited resources would help in the long run. There are so many people that want to create great pictures and share them – the potential customer base is larger than ever. But the gap between the casuals (with their smartphones) and the enthusiasts/geeks and their highend gear seems to be growing.
Thanks for your comment. The market place is where really should finally resolve. In terms of Pentax, it was really bad customer product service. To hang on and prosper, you have to be better than the competition, as good as, doesn’t sustain profitability. You have a really functional, affordable (in terms of the competition at the time) mid formate product and a growing cliental demographic that can afford it, albeit, not huge numbers; looks workable. The you quickly shoot yourself in the foot by offering either no service or really slow service, and no peripheral products that your demographic is going to want with their new shinny product. Just about that time, a well known reliable company with an outstanding industry reputation with it customers, announces a new mid formate to be released soon, at or below your product. Pentax should not survive, it didn’t earn the right to.
Nikon is in a similar position. Living off a reputation earned in better days with great equipment, respect for its customers, great service, efforts to accommodate professionals and private repair shops, and most importantly, its dealers. To their credit, they have given up on the point and shoot market, conceding that market to the cell phone. Smart. As a customer, I know they are “on the ropes” with some really bad luck, and really bad business decisions regarding treating customers and dealers with equal contempt, failing to effectively deal with the D600 problem by copping out on repairing/replacing a defective shutter mechanism with the old standby excuse: the camera was dropped, we don’t cover that!!!” If they don’t get on board with a higher megapixil camera, mid formate, and mirrorless, they might as well close their factories as well. These camera companies aren’t worth the paper to file bankruptcy without their customers. Right now the DLSR market is in free fall at about 15% per year, over the smaller, lighter, and more in-camera programed mirrorless units.
It seems to me that we need at least 3 major camera companies to spread the talent, options and research so we can all prosper. Visual art will always be in demand, and without good and reasonably affordable cameras, we will all be the lesser.
I sort of feel ever so slightly sorry for Nikon. Their 1 system is an excellent consumer product (20-30fps, full af tracking, really fast operation – the ultimate “what camera do I need to take photos of my kids?” camera) but has been really badly marketed, and probably suffers bad sales due to bad reviews from people who didn’t understand it and are judging it by the standards of products the. 1 system doesn’t compete with.
However… There were some reports that they were launching new Coolpix products. Why? Mediocre pocket cameras. font sell as consumers already have excellent smart phones with their internet connections and online sharing.
They can their DL 1″ sensor enthusiast pocket cameras because they are not economic. Why? Sony, Panasonic and Canon all do a.brisk trade in posh expensive enthusiast compacts that cost more than a low end SLR.
As you say, they had the D600 and then a host of other quality control issues that we’re dealt with unprofessionally.
They introduce WiFi smart phone app, but it doesn’t work very well, and they don’t fix it do any market motivation it might have garnered is totally eroded by bad user reports and no fixes. Why?
They enter the action camera market with products that get no more than 3 star reviews in a world where nobody looks at anything with less than 4 stars, released at a time when market leader GoPro are struggling, GoPro’s shad price has dramatically declined and all the indicators are thr action camera market had peaked and could be in decline.
It’s a master class is bad management and bad decisions, not of it because their products are fundamentally bad, but because they make the wrong products at the wrong time, don’t have a presence in important sectors, and have indifferent service and support.
Pentax? I don’t see the K-1 full frame SLR flying off the shelves, indeed most places don’t even stock it. Their consumer SLRs are nice and good value, but as you say they don’t have all the widgets to go with them to make them appealing. They make 1 good compact camera (GR1), and the Theta…. Is that a sustainable business?
Sigh – is it just because I get to read new articles in DS before everyone else gets out of bed, or is the rest of your audience mute because they are in a state of shock, after reading your comments, Pascl?
If it’s any consolation, I don’t think cameras (as such) are going to disappear. There are way too many people having way too much fun for that to happen – even some of the people you might expect to be switching to smartphones are, in fact, using cameras.
Cellphones have undoubtedly had a rather devastating effect on camera sales. But cameras survived the era of Kodak Box Brownies, Instamatics, Polaroid cams, etc.
That said – I think you are quite right in questioning how many we need, competing head to head. And, perhaps, worrying about who might falter and who will survive.
Four making “small MF” cams? And of course for serious pros, there are still “real MF” cams. I have no idea what sales are like for these toys, but I’d be a bit diffident about it – we had one not so long ago that launched a “new camera” and everyone thought it was pretty hot, till about a year later with poor sales the maker decided not to proceed with the promised range of lenses that might have made the switch worth whole. Is that a likely outcome for one or more of these four?
And lower down – there still seems to be a thriving market for compact cams – Ming Thein recently bought a 4/3 Panasonic GX85, and heaps of people just don’t want or need an FF or even an APS-C, they just want something they can slip into a pocket. Just a like a smartphone, only it IS still a “camera”.
I have a Nikon compact with a 4/3 sensor – for precisely that sort of reason. It’s a bit like the nursery rhyme about the girl who had a little curl that hung down the middle of her forehead – “when she was good she was very very good, and when she was bad she was horrid”. Some shots with it are great – but I do a lot of available light stuff, or shots in poor light, and my experience with (now) three 4/3 sensors is that they don’t handle that well. Strangely, my wife’s aging Olympus compact with its 4/3 sensor does passably well on that test, most of the time. I ditched my Panasonic 4/3 Lumix because it couldn’t handle “weak” light (let alone “poor” light) anywhere near as well as the aging Olympus.
Which has left me wondering – if smartphones can fit larger sensors, why can’t compact cameras? My Canon PowerShot has a 1″ sensor and being mirrorless, it’s not much bigger than a compact – in fact, I can’t see any reason why it couldn’t BE a compact, although Canon’s build quality has produced it as a slightly-larger-than-compact cam.
It’s questions like that, that leave the public a bit mystified as to what the manufacturers are up to. DS has numerous comments suggesting that manufacturers need to stop dreaming up new ideas in a vacuum, and start paying attention to what their customers want. It isn’t rocket science – it’s like the Ford Edsel, a famous marketing belly flop, but there was nothing really “wrong” with it** – the public just didn’t like it as much as Ford imagined they would.
** (other than the fact half the population took a very dim view of the central portion of the radiator grill, which they apparently found quite offensive)
I’ll be in a mess if Nikon doesn’t turn itself around – I followed the advice of the gurus and spent up big on glass, but it all has Nikon couplings and would be worthless without Nikon cams to use it on.
I imagine Sony is OK – and Fuji seems to be bucking the trend. I was surprised by Ricoh’s announcement, with its implications for Pentax – I hope they can pull themselves together. Sigma are doing well with lenses – I wonder about their camera sales, but I confess to having more than a passing interest in their Foveon sensors.
Leica has proven over the years that there is something to be said for being very good at doing what you do, and to hell with following everyone else. Haven’t seen a graph of their trading figures over the past two decades, but I don’t imagine smartphones have impacted them seriously.
In summary – your questions make me nervous. I’m going to go and play with my cameras, to engage my mind on other things. I did like the photos you used to illustrate your article, though.
Phil
Not sure if loosing another manufacturer will be better overall for all in the long run, probaby worse if we only have Canikon and maybe Sony.
For the smaller companies they often seem to survive with one really profitable line, such as instant photos for Fujifilm, so it could easily be a medium sized player that goes under than a small one due to lack of adaptability .
Regards Noel
Fiji went through a fairly painful restructuring process a few years ago, as a result of declining film sales and other Market trends. It was unusual for a Japanese company to do this as it led to job losses in an economy and culture that still clings to a failing conceit of employee loyalty and jobs for life. The camera business is a tiny blip on their balance sheet; they make their money selling polymers and make up, other optical devices etc. I suspect their cine lenses that coat thousands of dollars make some profit; the X system probably not so much as they don’t sell enough volume for a mass Market player, and they don’t price in the same way as Leica as a niche player. In a few years I fully expect the X system to cease to be, as I don’t think they have the resources or the ability and know-how to ride the storm, and the ageing photographers and hipsters who buy them will eventually die or move on to another fad.
Pentax is third in the SLR market, a tiny third, after sony ceased to bother with their SLR products in the face of no return on investment and the success of E mount and the RX products. I laughed when I read the linked story – their copier business has stalled – as having worked in offices with their products, they clearly have a great sales team, and the copiers and printers were terrible and broke down all the time. Given that the overall camera market appears to be declining, SLR sales appear to be in overall decline, and mirrorless sales appear to have started to plateau, it’s hard to see how such a niche player can ride the storm. I actually quite like their SLRs, as a Minolta refugee (they saw the storm coming and got out early), but their market position is too weak to survive for long without incredible innovation.
Nikon is starting to feel the pain, whilst Canon continues to make money by being the brand for the unthinking herd and manufacturing the same old things or “me too” products that purely sell on brand rather than ability. Canon at least have their professional video business and if they play it smart they can probably survive all the future upheavals in the market.
Leica survive from rich poseurs and collectors, and their “innovation” has been fairly slow – I laughed at the S type cameras and their prices launched years after every other market player, and offering nothing unique except branding. I’ve seen disgruntled comments from their medium.format users about the SL, and who knows if that behemoth has legs outside rich studio photographers and those sponsored to shoot Leica.
I honestly see the market for interchangeable lens cameras going into constant decline as the people who use them will become more and more specialist – because cheaper simpler products that take images will fulfill most other peoples needs. It’s not that there won’t be a need to make images, but most people won’t need expensive still camera systems to do what they want.
Sony? Either Canon or Nikon or a new player will steal the rug from under them, and undo their current advantage… Or Canon may continue to do a half baked job, everyone else may see a declining market they are not interested to enter, and Sony could continue on a roll to dominate an ever declining market.
Is this good for consumers? Well, consumers are the reason all this is happening – they are simply not buying lower tier stills camera products. The “blame” is with phone makers, who make it easy for consumers to take half decent snaps and share them. Camera makers and professional photographers should take note – if they don’t it will be their demise.
Adrian
I have no real knowledge to what you have written re specific companies, only to say that my understanding is that the non smartphone digital photography market is still larger than the pre digital photography market (excluding consumables), and what is still strong is the higher quality, higher margin products with slower model churn. This could still be profitable though could require significant corporate restructure.
With perhaps the general exception of ease of digital use/work flow /integration that smartphones excel at, all of the consumer companies are producing good product much cheaper and better than before.
I remain optomistic, perhaps simply because I cannot do anything to change the future!
Regards Noel
24 hours can be a long time, some days. Since you posted your article, Philippe, this has appeared in the Digital Photography Review for 28 June 2017:
Lexar discontinued: Micron announces the end of Lexar memory cards
Published on Tuesday, June 27, 2017 at 4:58:00 PM
It’s the end of an era. Parent company Micron has announced that they are discontinuing the Lexar retail brand. This includes ‘memory cards, USB flash drives, readers, and storage drives.’
ADDENDUM – some stores will quit existing stock at reduced prices, and there’s nothing wrong with the product, so this should offer some bargains for anyone interested. What is more troubling is what next? Cards are vital – some people swear (“swore”?) by Lexar, others prefer SanDisk – competition is supposed to be “good for the market”, boosting quality and keeping prices down. Now we face a future with little competition, so it’s uncertain what pressure there will be to pursue improvements in product quality or performance, and what (if any) pressure there will be to keep prices down to a moderate level. Since cards are an essential component of digital cameras, this is unsettling news.
I personally prefer Lexar cards, and I love my Lexar card reader, so this is not something I wanted to read.
Wow! Does that mean they will continue to sell the products under a different brand name? I hope so, as Lexar cards have been good (value, performance), as have Samsung – but the problem with such commodity technology products as the market is a race to the bottom with cards offering ever more for the same price or less (as fast as you can tool up , manufacture them and get them into distribution the retail price jas dropped and the consumer wants a higher spec).