Where is the industry heading - some thoughts.

Started Mar 31, 2014 | Discussions thread
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Bill Robb
Senior MemberPosts: 3,332
Re: Where is the industry heading - some thoughts.
In reply to GeraldW, Mar 31, 2014

GeraldW wrote:

This is an attempt to throw out some ideas for discussion. I have divided the industry products into five categories.

1) Smartphones, Tablets, PDA's and the like: There's no question that use of these for taking pictures is a big thing and is affecting the camera industry. All the camera companies acknowledge it. THeir use has eaten away around 50% of the low end fixed lens camera sales and that is having an effect on other categories as companies strive to offset the losses in sales. This area is the province of peaple from preteens to folks in their 60's.

2) Lower end fixed lens cameras (FLC's), AKA Point and Shoot cameras. Sales loss here is around 50% and is the segment most affected by camera phones. However, the sales are not zero - there are still millions being sold. What it does mean is fewer models and longer times between new models to minimize costs, amortize tooling and start up costs, and maintain profitability. I think that some more basic and less "feature laden" models might work here. Something like a return of the Canon A series with AA power. People who want all the "features" will gravitate to phones or more upscale FLC's. Older folks and the non-technological would be targets.

There is no doubt that the old single use film camera user has switched over to smart phones. This was a huge market which temporarily moved to cheap digital cameras as a tech bridge between film and cell phone camera.

3) Premium FLC's: This seems to be a growing segment. It encompasses cameras like the Canon G & S series, Sony RX models, Fuji X-20, and so forth. I'd include the so-called "bridge" cameras here, small sensors or not. For the camera companies it's a refuge from cell phones. For the serious photographers, it's a lighter and smaller (in most cases) alternative to DSLR's and mirrorless. A lot of DSLR users that I know have one of these as a second camera. sensors range from tiny to FF. The better ones have very good image quality, rivaling or even exceeding DSLR's and Mirrorless.

This segment may well also be at risk, depending on how smart the smart phones get. Don't put too much attention on ultimate image quality, that is something that is not really all that important to most users.

Good enough is all they look for. In this, they actually share philosophy with real working pros.

4) Mirrorless: These cover sensor sizes from 1/1.7" to Full Frame. They seem to have gotten past the "look how small the body is" marketing approach to a more mainstream emphasis on image quality and ergonomics, and bodies have subtly increased in size with better grips. Lens inventory has been a real issue and still is for some brands; but most lines, and particularly Olympus and Panasonic are now quite broad for amateur use. Olympus, Panasonic, Fuji, and Sony appear quite focused in their lines now. Samsung and Nikon are looking less focused, Pentax has the Q line, and Canon has only token presence.

This is where the industry is moving, like it or not.

5) DSLR's: Only Canon, Nikon, and Pentax are still reliant on the DSLR. Sony says no more SLT's. I think the entry level DSLR is vulnerable to Mirrorless; but much less so in the upper-middle and top lines. Focus tracking of fast action is still a strong suit here, so the camera bays at ball games will still be mostly Canon and Nikon. They have the rugged cameras, the lens inventory, and both have a strong professional photographer support organization. I don't think DSLR's will go away; but I do see some erosion from Premium FLC's and Mirrorless as the Mirrorless lens inventory grows. You do need some size and weight to balance and control large, heavy lenses. Recently Canon celebrated their 65 millionth DSLR and 100 millionth lens. That's 1.5 lenses per camera sold on the average. What that tells me is that only a small percentage buy extra lenses, and that most DSLR buyers only ever use the kit lens. Those who only use the kit lens might as well have a Premium FLC. And I'd bet most of them only shoot in Auto. They bought the camera in the expectation of "better" pictures, and have found they look a lot like the shots they get from their P&S. You're not going to get a lot of repeat DSLR sales from those people. That logic also applies to a lot of Mirrorless buyers.

I think you are operating under a mis conception. High end DSLRs may be better at some things than others, but lower end DSLRs are easily eclipsed by mirrorless in features and often in speed. More and more people are discovering that it is much nicer to carry a more compact camera that gives them the same quality as their larger DSLRs.

The DSLR is in serious peril from mirrorless, and will more and more find itself maginalized as mirrorless cameras start to really hit their stride.

As has been pointed out in several other posts on this forum, all of the camera companies, except Nikon, get the majority of their income and profits from something other than cameras. Nikon is 74% camera derived, Canon 26%, Olympus 14%, and Fuji 3%. So if they bleed red ink too long, there is a real possibility that their Board and shareholders will shut it down or sell it off.

Were I a Canon or Nikon user, I would be concerned, simply because if those camera divisions bleed for too long they will be shut down. Sony is the same way. They are on record as saying they are going to throw money at every possible camera niche and then concentrate on where it sticks. If it doesn't stick anywhere, they are out. Pentax is actually in good shape, Ricoh bought the name with the intention of growing an imaging division. The fact that everything Pentax is now plastered with the Ricoh name is telling about how they view their new division. They seem quite pleased with themselves. Of course, the K3 gives them ample reason to be pleased. Fuji has always been all about imaging. It is all they have ever done, and they see their camera division as a way to drive sales towards the rest of their imaging products. They are in it for the long haul. Olympus has, for me, always been a wild card, but I don't see them going anywhere. Panasonic is another wild card, and they may or may not stick it out.

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