CP+ 2014: Nikon Interview - 'our cameras need to evolve'
The CP+ show in Yokohama Japan has just closed, but in between visits to the various booths we made time to sit down with four senior Nikon executives to get their thoughts on the state of the market, future opportunities and the inevitable coming together of stills and video.
Note that this interview was conducted through a translator. Unless specifically noted, responses are combined. Minor edits have been made for clarity.
The camera industry is challenging at the moment, with sales of compact cameras in particular declining dramatically. What’s your opinion of the current market?
There have certainly been changes in the market, such as the decline in compacts, and also when you look at the number of units shipped, the same decline has been seen for interchangeable lens cameras as well. So there have been changes, and there are geographies that aren't doing well as we’d thought, such as China, but that situation specifically we believe is temporary.
Our mission is continue to respond to the needs and demands of various users in the various countries around the world.
How important is China to you?
it’s the most important of the emerging markets because it has the highest potential. When I say ‘potential’, we’re not just talking about the cities, like Shanghai and Beijing, but also the vast population inland.
Do you see the same market trends across the entire world?
The trends differ by geography. If we take Japan as an example, DSLRs have been doing well recently, helped by economic policies introduced by the Government. In emerging countries, growth is not as fast as we’d expected, but there is still slow growth. It’s the developed countries where we’re struggling, and we’re seeing decline in some areas.
The trends are different by product category, too. For example with mirrorless, the situation differs very much by geography. In Japan and Asia mirrorless is still growing, but in Europe and the Americas, including North America we've determined that the market for mirrorless is shrinking.
You mentioned economic policies in Japan that have helped you - can you go into detail?
The adjustment of the Yen was important - because the Yen is weaker now, companies are thriving again, and stock prices reflect this. That situation stimulates consumer confidence. We will also have an increase in VAT in April from 5% to 8% so we've seen a rush in domestic demand before that comes into effect.
When you’re in the stages of planning a product, do you make decisions about which countries you’ll target at that point?
We do - we think about the target user and we have strategies that differ by geography, so yes.
Do you have any products which are only marketed in certain territories?
When we launch certain products we’re aware of where on the globe that camera might be popular, but we don’t specifically target products in that way. But we might offer certain color variations or styles exclusively in some territories, such as flowery motifs in Europe and India for example.
The Nikon 1 V2 is Nikon's flagship mirrorless camera, featuring DSLR-style ergonomics and full manual exposure control. Sales of mirrorless are healthy in certain parts of the world but the market is still relatively small in the USA and Europe.
Why do you think that mirrorless has been relatively slow to gain popularity in Europe and America?
Let’s talk about North America because that’s one of the worst geographies when it comes to the mirrorless camera market. The market for our mirrorless cameras is not growing there. We’re still studying the reasons but we believe that North American customers believe that if they want image quality they’re supposed to buy DSLRs, not mirrorless. In reality, mirrorless can offer high image quality, it’s just a smaller system, but the American customers don’t view it in that way.
So you find that in America your customers equate physical size with quality?
Perhaps, yes. We have done some studies where we presented consumers with a DSLR and a mirrorless camera and ask them if the image quality was the same, which one they would chose, and generally they chose the DSLR. We asked them why and they said ‘of course bigger ones are better!’ We literally heard that response from one customer.
In Europe, DSLR sales are strong, especially among women. So maybe using a DSLR is a more of a status symbol for someone wanting to become a better photographer, compared to mirrorless.
More photographs are taken and shared now than ever before. This is a huge opportunity for you, in theory. How are you taking advantage of it?
One of the ways we’re addressing the huge popularity of image sharing is by creating affinity between our cameras and mobile devices like smartphones. We believe that smartphones are an opportunity. We used to think they were a threat when they first emerged but now we think that having a good affinity with smartphones is a great opportunity which is why we have features like built-in Wi-Fi in our compacts and DSLRs.
How important is video capture to your non-professional users?
It depends on what product category, and geography. In Japan for example, our customers place less importance on video functions, compared to consumers in western countries. For many western customers video shooting is a daily practice. We've introduced video functionality into most of our cameras, but we promote it with different emphasis depending on which market we want to talk to. And video performance is improving all the time.
When you first added movie recording to your DSLRs with the D90, did you create a new team specifically for video?
Not as such, no. We put together a team for the D90, and some of that team worked on the video function. After that, video dedicated teams just sort of evolved, because we needed to have a group of people who could respond to the requests that followed the launch of the D90. So now in fact we do have a team that works solely on video.
What challenges does video create these days when you’re designing stills cameras?
We can give three examples, which we’re actively working on. First, the biggest difference between stills and video in terms of the design challenges is actually audio. Sound matters a lot, so minimizing the sound of the autofocus, for example is one challenge.
Another challenge is focusing speed. For shooting stills, fast focus is better but in video you’re focusing as you’re filming, so focus speed has to be appropriately slower. This is something we’re trying to optimize.
Thirdly, because we output the content onto television, and there are so many types of TV output we have to be aware of things like color calibration.
|The Nikon D800 features a 36MP full-frame sensor and an advanced video capture mode, including the ability to output uncompressed footage over HDMI.
Read more about the Nikon D800
Canon is putting a lot of energy into Cinema EOS. Is there an opportunity for Nikon in the professional video space?
When we made the D800 we got a good response from the market for the video functionality, which naturally leads us to consider our next steps in terms of what we should do with video. We are considering various options, and we’re listening to the voices of our customers. But it’s not really about what to do to compete with Canon.
One thing we've found in our testing is that mirrorless cameras have a big advantage over DSLRs in terms of autofocus accuracy. As sensor resolutions increase, how are you addressing this in your DSLR design?
We’re addressing this by evolving the autofocus in both categories. The autofocus in mirrorless is very precise, as you say, and in some cases it does exceed the precision of DSLR autofocus, for example in our Nikon 1 series. But when it comes to low light, the autofocus of a DSLR is faster and more precise, so it depends. The main goal with our DSLRs is the best possible image quality in stills photos.
As you’re putting higher and higher resolution sensors into your DSLRs, did you have to change your quality control process to deal with the necessity for greater precision?
Not especially. It was very rigorous already.
Looking ahead five years or so, what do you think the future is for news media?
The skills required of photographers will change dramatically. There will be less separation between traditional still news media and video, and this will affect the professionals. Cameramen will have to be able to address both stills and movie very well, and they will demand better equipment.
If 4K and 8K video becomes a practical reality in the future, will professional photographers need stills cameras?
Stills will continue to be required because of speed. It’s not just about image quality, the most important thing is to deliver images quickly. So the bigger the image file becomes, the greater the bottleneck. That’s the challenge - how to deliver large files quickly for fast-moving news coverage. Still cameras do that very well.
In the future, how will you create products for a professional audience that needs cameras to capture both stills and video?
We can’t answer that specifically, but we can say that we will continue to listen to them very carefully. Feedback from those users is very important to us and we will use feedback from both stills and video photographers to evolve our cameras. And our cameras do need to evolve.
If someone asked you why they should buy into Nikon, what would you tell them?
If you want good image quality, you should choose Nikon. We’re very confident in the image quality of our cameras, which also includes the image processing and lenses. The optical technology of our lenses is superb. That’s why you should choose Nikon. Another very important asset is our legacy of NIKKOR lenses. There are a huge number of lenses out there, both new and on the used market. There are 55 years’ worth of Nikon F mount lenses in existence, so you can use your grandparent’s lenses on a new Nikon DSLR that you buy today.
How much business do you lose to third-party lens manufacturers?
Not a significant amount, we believe. NIKKOR lenses are good value, even though the price is higher.
The retro-styled Df is a 16MP full-frame DSLR which offers a combination of traditional and modern ergonomics, including manual shutter speed and ISO dials.
Speaking of legacy lens compatibility, how well has the Df has performed for you since its release?
Very well, we’re actually back-ordered in some countries. Even in Japan, we had a tough time getting hold of enough Df samples to display here at CP+ for our visitors. If you order a Df now in Japan you’d have to wait around two months. So if you order now you’d probably end up paying 8% VAT!
The Df is proving very popular, especially among the younger generation - both male and female. Older people know that the Df looks like a traditional camera, but to young people the design is completely new and fresh.
Even internally there was some debate about how the concept of this camera should be positioned in the market but it turned out very well.
In a changing market, which kinds of advertising and marketing activities work best for you?
Globally, the trend is definitely moving towards online advertising and we’re no exception so we’re utilizing various types of media to be most effective. Specifically, if we’re talking about how to communicate the benefits of a product, it’s impossible to do that in print now. For the Nikon 1 line for example we had to create videos, and those videos had to go on the web.
Looking ahead a few years, what worries you?
[Shigeru Kusumoto - General Manager, Marketing Department] I sleep well at night, but we do wonder how much more the compact camera market will shrink, and I worry about the negative trend in DSLR that we've seen recently and about how that will develop. Market conditions worry me most of all.
How do you maintain profitability in this kind of market?
By doing the basics. Developing our products more efficiently and reducing costs, such as the cost of components. The last thing we should be doing is asking our customers to carry the burden with their spending money.
We’re also adding value by differentiation. There’s a question of how much people are willing to pay for added value but we’re quite confident when it comes to cameras like the Df and Nikon 1. The Df occupies a unique position, and the 1 AW1 for example is also unique. These are the kinds of things that we believe consumers are willing to pay for.
Looking ahead, what are you most excited about?
[Shigeru Kusumoto - General Manager, Marketing Department] Personally I get most excited when I think about planning new cameras.
Will you make a replacement for the D300S?
Our official comment about this question is that we are not able to make any comment on future products. But we always consider every possibility to meet users’ needs and market trends. We are of course considering all such requests!
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