Olympus still hopeful. Is MILC a serious alternative for DSLR?

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HappyVan
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Olympus still hopeful. Is MILC a serious alternative for DSLR?
10 months ago

At CES, Oly's Terada (product planning) offered this tidbit.

“Yet, as far as CSCs are concerned, Terada believes Olympus has the potential to take a large chunk of the market, in two ways: by winning over existing DSLR users; and by pulling in complete newcomers to system cameras.

‘The world of interchangeable lens has changed,' said Terada.

'This is our opportunity to grab current DSLR users to switch to mirrorless...

Read more at http://www.amateurphotographer.co.uk/photo-news/540335/ces-2014-olympus-may-re-enter-dslr-arena#91ahpQciSJY0fGGy.99

First, Terada is quietly acknowledging that DSLR is not going away. Indeed, the guys at Olympics are still emotionally attached to the DSLR because those were their days of glory. That's where their best lenses are.

In the next post (Is MILC a serious alternative for DSLR?), I will examine whether MILC (as a group) is really doing its job in pulling in new users, and converting DSLR users.

In this section, I will merely point out that the last 43 cameras were launched in 2010, and are due for replacement. The last film cameras were sold in 2002. Therefore, the M43 OM-D cameras are essential to stop the lost of Oly DSLR customer base to other brands.

Historically, Oly DSLR market share was 6% in 2007 (according to wikipedia). Currently, Oly market share of ILC is just @3% globally! Since, most of the M43 cameras sold by Oly is without viewfinder, the inference is that Oly is seriously bleeding DSLR users to other brands.

Just to put a perspective on Terada's spin. Oly will maintain its own DSLR user base only when it sells enough cameras with EVF. That's equivalent to @6% of ILC.

At the rate that the Olympus DSLR customer base is eroding, it is unlikely that Oly will return to DSLR.

HappyVan
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Is MILC a serious alternative for DSLR?
In reply to HappyVan, 10 months ago

Is MILC a serious alternative for DSLR?

MILC (mirrorless) fans have been trying to get DSLR owners to switch. What does the global sales data tell us.

At present (CIPA January to November 2013), MILC has about 19% of ILC (interchangeable lens camera) unit shipments and about 17% of shipment value.

http://www.cipa.jp/stats/documents/e/d-201311_e.pdf

Compact camera shipments 43.1 million units. MILC shipments 3 million units. DSLR shipments 12.8 million units.

Disappointing! A detailed analysis would suggest that the amount of DSLR defection is very much lower.

There are two major pools of potential MILC buyers. Upgraders from compact cameras and DSLR owners downsizing.

Let's make simplifying assumptions. That upgraders buy MILC without VF because they are familiar with the form factor. That DSLR downsizers would prefer a MILC with VF because they are familiar with that functionality.

Looking at the Japanese BCN sales numbers, none of the top ten models have built-in EVF. Though Oly and NEX have optional EVF.

http://www.sansmirror.com/newsviews/bcns-preliminary-2013-numbe.html

Let's use a 20% rule. Assume that MILC with EVF represent 20% of total sales. That would imply that MILC globally sold 2.4 million without EVF and 600,000 with EVF.

Bottom line: MILC upgraders were only 5.6% of compact sales (2.4m versus 43.1m). Despite low-end MILC selling at $200-$400.

DSLR downsizers represented only 4.6% of DSLR sales (600k versus 12.8m).

In the past, MILC has been compared in its entirety to DSLR sales. But, most of MILC sales are at the $200-$400 price points which is below DSLR price points. Therefore, most of the low end buyers WOULD NOT HAVE BEEN DSLR BUYERS.

Conclusion: That MILC under-performs as an upgrade to compact cameras. Despite better IQ and a competitive price, buyers still think that compact cameras represent better value. That MILC is not a significant alternative to DSLR. With a sales ratio to DSLR (with OVF) of 1/22, MILC today is not a threat to DSLR. Not even close.

Much has been made about the better functionality, lower weight, and smaller size of MILC. Particularly, on sites like DPR where it seems that MILC is the Next Big Thing. But, that is far from the truth. THE AMOUNT OF DEFECTIONS FROM DSLR IS TRIVIAL.

As a confirmation, look at the response of Canikon to MILC. Slow to enter the game. Nikon One has several innovations but uses a small sensor. EOS-M is built from the DSLR parts bin.

Canikon is not worried about their DSLR sales. Bear in mind that Canikon are the only mass market brands that are making money. Perhaps, their understanding of the market is superior to the MILC fans?

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Martin.au
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Re: Is MILC a serious alternative for DSLR?
In reply to HappyVan, 10 months ago

I sense someone is concerned that their Nikon 1 system isn't getting enough attention.

Do you really need instruction on why mixing and matching numbers from various sources and different markets isn't a good idea, Happy? This is basically FUD.

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Ontario Gone
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Re: Olympus still hopeful. Is MILC a serious alternative for DSLR?
In reply to HappyVan, 10 months ago

There are two functional advantages at stake when discussing mirrorless vs reflex. On the side of the DSLR, you have dedicated PDAF for superior predictive tracking. You also have a VF with no lag, so erratic subjects will be exactly where you see them at. Those are the only two advantages to having a mirror present.

For mirrorless, you have an EVF which gives you visual aids that a mirror system cannot. Peaking in the VF, real time exposure, ect. Any electronic aid that can be integrated into a screen can be put to your eye. The second thing is reduced vibrations. This is very helpful when trying to pull every bit of detail out of a shot, and slower SS will benefit more.

So there you have it, two differences for each side. Autofocus and visual interface. Now, when on-sensor PDAF catches up, or even when CDAF catches up (i personally think CDAF will be the best eventually), one of the two main advantages of having a mirror is gone. When EVF screens improve to the point where response time is a non factor, the other advantage to a mirror will be gone.

For now, one is better for fast motion, the other is better for the rest. Eventually, getting rid of the mirror will be the better choice in every way. It isn't here yet but to deny that it will be eventually is dishonest. It is only a matter of time, mirrors will be a niche market only for people who don't mind using an inferior system because it brings back memories, similar to what film is now.

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Jim Salvas
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Re: Is MILC a serious alternative for DSLR?
In reply to HappyVan, 10 months ago

Yes, and in 1984 PC columnists were saying the mouse was the reason the Macintosh would fail. After all, it had such a small share of the market.

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HappyVan
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Not sure what your point is?
In reply to Jim Salvas, 10 months ago

Jim Salvas wrote:

Yes, and in 1984 PC columnists were saying the mouse was the reason the Macintosh would fail. After all, it had such a small share of the market.

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Jim Salvas

As I recall, PC eventually annihilated Mac because Apple stuck to a premium price policy and limited add-on.

With the return of Steve Jobs, Mac was resurrected as HIP. But, Apple's current prominence is based on their mobile communication devices. Currently, PC is still the overwhelming favourite for desktop computing.

Gotta remember that most startups fail rather quickly. To demonstrate success, startups must maintain momentum and get to the point where they can go toe-to-toe with the industry biggies.

My point is that MILC has not achieved success against either compact cameras or DSLR. The question is why?

.

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Jim Salvas
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Re: Not sure what your point is?
In reply to HappyVan, 10 months ago

My point was that not only is the Mac still around, but Apple is one of the most valuable companies in the world, despite the shortsighted gloom and doom predictions.

You don't have to take over the market to make profits. You have to market smartly.

I think Olympus has finally figured that out. Time will tell if they are right.

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HappyVan
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It is possible ...
In reply to Jim Salvas, 10 months ago

Jim Salvas wrote:

My point was that not only is the Mac still around, but Apple is one of the most valuable companies in the world, despite the shortsighted gloom and doom predictions.

You don't have to take over the market to make profits. You have to market smartly.

I think Olympus has finally figured that out. Time will tell if they are right.

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Jim Salvas

... that Olympus imaging can one day be profitable. However, that Oly would be very different from the Oly with 6% market share. Or, the Oly selling less than a million cameras.

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Ontario Gone
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Re: Not sure what your point is?
In reply to HappyVan, 10 months ago

HappyVan wrote:

Jim Salvas wrote:

Yes, and in 1984 PC columnists were saying the mouse was the reason the Macintosh would fail. After all, it had such a small share of the market.

-- hide signature --

Jim Salvas

As I recall, PC eventually annihilated Mac because Apple stuck to a premium price policy and limited add-on.

With the return of Steve Jobs, Mac was resurrected as HIP. But, Apple's current prominence is based on their mobile communication devices. Currently, PC is still the overwhelming favourite for desktop computing.

Gotta remember that most startups fail rather quickly. To demonstrate success, startups must maintain momentum and get to the point where they can go toe-to-toe with the industry biggies.

My point is that MILC has not achieved success against either compact cameras or DSLR. The question is why?

.

Lets not confuse brands with formats though. Apple vs IBM is not the same as reflex vs mirrorless. What if Nikon and Canon unveiled a brand new mirrorless to replace their DSLR lines, tomorrow, and never made another DSLR. Then what?

I think the problem is some people, maybe you, are in support for a particular brand and that brand just happens to be pure. So you think you are supporting a format, since Canikon is very much a pure DSLR segment, but you have mistaken a brand for a format. This isn't about going from apple to IBM, it's about going from pencils to computers. This is beyond a brand, and all brands will eventually succumb to mirrorless. Canon Nikon and Pentax just happen to be taking longer than the rest.

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HappyVan
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What is a fanatic?
In reply to Ontario Gone, 10 months ago

Ontario Gone wrote:

Lets not confuse brands with formats though. Apple vs IBM is not the same as reflex vs mirrorless. What if Nikon and Canon unveiled a brand new mirrorless to replace their DSLR lines, tomorrow, and never made another DSLR. Then what?

I think the problem is some people, maybe you, are in support for a particular brand and that brand just happens to be pure. So you think you are supporting a format, since Canikon is very much a pure DSLR segment, but you have mistaken a brand for a format. This isn't about going from apple to IBM, it's about going from pencils to computers. This is beyond a brand, and all brands will eventually succumb to mirrorless. Canon Nikon and Pentax just happen to be taking longer than the rest.

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"Run to the light, Carol Anne. Run as fast as you can!"

A fanatic is someone who can't accept the validity of a different view. Can I quote you?

"...all brands will eventually succumb to mirrorless..."

You're completely sure that MILC is the next big thing. Therefore, DSLR must be doomed. What about hybrid VF alternatives?

At this time, it sure looks like Canikon know what they are doing. Eventually, Canikon may offer serious MILC systems. However, nothing is certain except what today's numbers tell us.

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Tim Devine
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Re: Is MILC a serious alternative for DSLR?
In reply to HappyVan, 10 months ago

You've obviously put a lot of analysis into this, so who am I to argue? I've been using DLSRs since 2003 (10D, 20D, 5D, 5D II) and I picked up a Sony a7R last month. Absolutely love it...bought the 35 FE and 55FE, also pre-ordered the 24-70 FE.

Even if it's a slow migration, I think at some point momentum will increase. As the cameras advance, and more people buy the cameras, word of mouth will have an impact.

Towards the end of your analysis it seems like emotion is creeping in. Were you wronged by a mirrorless camera as a child?

In any case I think both will continue to survive, but I have no idea what the ultimate ratio will be in terms of sales.

HappyVan wrote:

Is MILC a serious alternative for DSLR?

MILC (mirrorless) fans have been trying to get DSLR owners to switch. What does the global sales data tell us.

At present (CIPA January to November 2013), MILC has about 19% of ILC (interchangeable lens camera) unit shipments and about 17% of shipment value.

http://www.cipa.jp/stats/documents/e/d-201311_e.pdf

Compact camera shipments 43.1 million units. MILC shipments 3 million units. DSLR shipments 12.8 million units.

Disappointing! A detailed analysis would suggest that the amount of DSLR defection is very much lower.

There are two major pools of potential MILC buyers. Upgraders from compact cameras and DSLR owners downsizing.

Let's make simplifying assumptions. That upgraders buy MILC without VF because they are familiar with the form factor. That DSLR downsizers would prefer a MILC with VF because they are familiar with that functionality.

Looking at the Japanese BCN sales numbers, none of the top ten models have built-in EVF. Though Oly and NEX have optional EVF.

http://www.sansmirror.com/newsviews/bcns-preliminary-2013-numbe.html

Let's use a 20% rule. Assume that MILC with EVF represent 20% of total sales. That would imply that MILC globally sold 2.4 million without EVF and 600,000 with EVF.

Bottom line: MILC upgraders were only 5.6% of compact sales (2.4m versus 43.1m). Despite low-end MILC selling at $200-$400.

DSLR downsizers represented only 4.6% of DSLR sales (600k versus 12.8m).

In the past, MILC has been compared in its entirety to DSLR sales. But, most of MILC sales are at the $200-$400 price points which is below DSLR price points. Therefore, most of the low end buyers WOULD NOT HAVE BEEN DSLR BUYERS.

Conclusion: That MILC under-performs as an upgrade to compact cameras. Despite better IQ and a competitive price, buyers still think that compact cameras represent better value. That MILC is not a significant alternative to DSLR. With a sales ratio to DSLR (with OVF) of 1/22, MILC today is not a threat to DSLR. Not even close.

Much has been made about the better functionality, lower weight, and smaller size of MILC. Particularly, on sites like DPR where it seems that MILC is the Next Big Thing. But, that is far from the truth. THE AMOUNT OF DEFECTIONS FROM DSLR IS TRIVIAL.

As a confirmation, look at the response of Canikon to MILC. Slow to enter the game. Nikon One has several innovations but uses a small sensor. EOS-M is built from the DSLR parts bin.

Canikon is not worried about their DSLR sales. Bear in mind that Canikon are the only mass market brands that are making money. Perhaps, their understanding of the market is superior to the MILC fans?

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Bob Tullis
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In reply to HappyVan, 10 months ago

Well, working through a 1D and many models in between up to a 5D2, I'm very happy with m4/3 now, no distractions caused by FF sensors and larger formats.

And that's all that matters.   To me.   All that other stuff is just down-time masturbation, afaic.

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justmeMN
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Olympus admits...
In reply to HappyVan, 10 months ago

"Olympus admits that its overseas marketing has been lacking so far." - Reuters: Sept. 10, 2013

Among other obstacles, unless they improve their marketing/advertising and product placement/visibility, their mirrorless cameras will only be popular in their local market.

Here in the USA, I don't know if I have ever seen an Olympus mirrorless ad, or an Olympus mirrorless camera on a store shelf.

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MichaelKJ
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Re: Olympus admits...
In reply to justmeMN, 10 months ago

justmeMN wrote:

"Olympus admits that its overseas marketing has been lacking so far." - Reuters: Sept. 10, 2013

Among other obstacles, unless they improve their marketing/advertising and product placement/visibility, their mirrorless cameras will only be popular in their local market.

Here in the USA, I don't know if I have ever seen an Olympus mirrorless ad, or an Olympus mirrorless camera on a store shelf.

They've recently had ads for the OMD system in the NY Times, but TV ads appear to have disappeared.  Olympus also dropped their co-sponsorship of the US Open Tennis tournament (I always thought it was a strange to see Olympus ads in a venue with a bevy of pros capturing the action with their Canikons.)

So, if anything, I think their marketing in the US has decreased recently.

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MichaelKJ
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What do you consider MILC?
In reply to HappyVan, 10 months ago

With the arrival of the A7/r, we now have MILC cameras with sensors that range from the 1/1.7" Pentax Q to FF.  However, you rely on data that overwhelmingly reflect sales/shipments of the small MILCs made primarily by Olympus, Panasonic & Sony.

Smaller sensor MILCs have a size advantage that, at a minimum, will allow them to continue to survive as an option for those of us who place a premium on size and weight.  However, the companies making these cameras are going through a difficult time and it remains to be seen whether this segment of the market will blossom or be relegated to serving a niche market.

The question of whether DSLRs will eventually be replaced (for the most part) with FF MILCs is a different question.  At this point, sales/shipment data are lacking and meaningless for attempting to answer this question.

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digitallollygag
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Re: Not sure what your point is?
In reply to Jim Salvas, 10 months ago

My point was that not only is the Mac still around, but Apple is one of the most valuable companies in the world, despite the shortsighted gloom and doom predictions.

You don't have to take over the market to make profits. You have to market smartly.

I think Olympus has finally figured that out. Time will tell if they are right.

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Jim Salvas

I sure hope you're right about Olympus.

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EvokeEmotion
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Re: Olympus admits...
In reply to MichaelKJ, 10 months ago

MichaelKJ wrote:

justmeMN wrote:

"Olympus admits that its overseas marketing has been lacking so far." - Reuters: Sept. 10, 2013

Among other obstacles, unless they improve their marketing/advertising and product placement/visibility, their mirrorless cameras will only be popular in their local market.

Here in the USA, I don't know if I have ever seen an Olympus mirrorless ad, or an Olympus mirrorless camera on a store shelf.

They've recently had ads for the OMD system in the NY Times, but TV ads appear to have disappeared. Olympus also dropped their co-sponsorship of the US Open Tennis tournament (I always thought it was a strange to see Olympus ads in a venue with a bevy of pros capturing the action with their Canikons.)

So, if anything, I think their marketing in the US has decreased recently.

NY Times? Who reads newspaper anymore? Oh that's right, the 'DSLRs are too heavy' crowd. Great demographic targeting.

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HappyVan
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The irony is that ...
In reply to justmeMN, 10 months ago

justmeMN wrote:

"Olympus admits that its overseas marketing has been lacking so far." - Reuters: Sept. 10, 2013

Among other obstacles, unless they improve their marketing/advertising and product placement/visibility, their mirrorless cameras will only be popular in their local market.

Here in the USA, I don't know if I have ever seen an Olympus mirrorless ad, or an Olympus mirrorless camera on a store shelf.

,,, Oly is withdrawing from North America where DSLR form factor is dominant. So, how to win over DSLR users when support is disappearing. Means that Oly is abandoning their American DSLR customers.

They are concentrating their efforts in Asia where the compact form factor is important. Wonder how they are going to get OM-D sales up?

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MichaelKJ
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Re: Olympus admits...
In reply to EvokeEmotion, 10 months ago

EvokeEmotion wrote:

MichaelKJ wrote:

justmeMN wrote:

"Olympus admits that its overseas marketing has been lacking so far." - Reuters: Sept. 10, 2013

Among other obstacles, unless they improve their marketing/advertising and product placement/visibility, their mirrorless cameras will only be popular in their local market.

Here in the USA, I don't know if I have ever seen an Olympus mirrorless ad, or an Olympus mirrorless camera on a store shelf.

They've recently had ads for the OMD system in the NY Times, but TV ads appear to have disappeared. Olympus also dropped their co-sponsorship of the US Open Tennis tournament (I always thought it was a strange to see Olympus ads in a venue with a bevy of pros capturing the action with their Canikons.)

So, if anything, I think their marketing in the US has decreased recently.

NY Times? Who reads newspaper anymore? Oh that's right, the 'DSLRs are too heavy' crowd. Great demographic targeting.

Nikon and Canon regularly have separate 4-6 page inserts in the NY Times (here in NYC)--much more extensive print advertising than Olympus or any other camera company.

As a funny aside, Willoughby's has been advertising the ultra expensive wooden Hasselblad cameras (adaptions of Sony mirrorless models) in both the Times and the Wall Street Journal for several months.  Despite being made fun of, it appears that Hasselblad may have been successful in targeting the ultra rich.  Could this be the one profitable market niche for mirrorless cameras.

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HappyVan
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Focus on the strengths
In reply to MichaelKJ, 10 months ago

MichaelKJ wrote:

With the arrival of the A7/r, we now have MILC cameras with sensors that range from the 1/1.7" Pentax Q to FF. However, you rely on data that overwhelmingly reflect sales/shipments of the small MILCs made primarily by Olympus, Panasonic & Sony.

Smaller sensor MILCs have a size advantage that, at a minimum, will allow them to continue to survive as an option for those of us who place a premium on size and weight. However, the companies making these cameras are going through a difficult time and it remains to be seen whether this segment of the market will blossom or be relegated to serving a niche market.

The question of whether DSLRs will eventually be replaced (for the most part) with FF MILCs is a different question. At this point, sales/shipment data are lacking and meaningless for attempting to answer this question.

Each format and form factor has their own inherent strengths. MILC's strength is its compact size. Therefore, it makes sense to use FF MILC with a few prime lenses.

The small DSLR is the better camera for big lenses and for heavy duty work. Their inherent strength lies in their larger batteries and VF. As well as the proven high end AF systems.

Sony now has a very formidable product line against M43 because they have a full product range. FF and 1" sensors. Compacts and systems. Rangefinder-types and DSLR form factor. I would expect Sony to take 50% of MILC.

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