Weak Yen masks hard times as Mirrorless and DSLR sales decline
Manufacturers are putting on brave faces as compact sales continue their decline and interchangeable lens camera sales fail to shine. Canon, Fujifilm, Nikon and Olympus have all put out their financial results covering the Christmas period, and there's little to be positive about, with falling sales of interchangeable lens cameras being reported by the industry's biggest players.
Market research company IDC's report on the period describes the period as 'a bust for camera vendors.' The report's author, Director, Global Imaging Practice, Christopher Chute expresses particular concern about 'the lackluster performance of the [Interchangeable Lens Camera] segment, which had been driving market growth and profits for the past several years.'
Industry body CIPA's figures for cameras shipped during the period confirm the declines - with a 6% fall in DSLR and 22% fall in mirrorless sales volumes over the period. Mirrorless models accounted for 23% of shipments by volume and 18% by value.
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The weakening Yen has helped companies by increasing the reported value of overseas sales. This has kept the books looking healthy, despite falls in sales volumes. Several makers pointed to sluggish sales in Europe and China, as their economies have not recovered as quickly as forecast.
Both Canon and Nikon forecast still-lower sales in 2014, and IDC predicted: 'more trouble for digital cameras in 2014, as camera demand remains anemic, second- and third-tier vendors question their long-term prospects in this declining market, and top vendors choose strategic choices based on growth opportunities.'
These lowered expectations for 2014 will factor-in a drop in Japanese sales that is expected when the country's consumption tax is increased in March.
Canon was first to announce, with compact camera sales volumes falling 20% in the three months to December 31st and 28% over the whole year. The company said sales of its larger sensor models and high-zoom SX range grew over the same period, but didn't break-out the figures.
It also reporting its first sustained fall in interchangeable lens camera (ILC) sales since the launch of the EOS Rebel / 300D in late 2003. Interchangeable lens camera sales volumes fell 7% for the year. These falls only resulted in a 1.7% decline in sales income, thanks to exchange rate changes - it would have been a 18.8% fall if currency effects were removed.
The company said 37% of its unit sales and 81% of its camera income came from ILCs during 2013. Strong inkjet sales drew a 16.2% increase in income, helping the Imaging Systems division (of which cameras are part) grow sales values by 3% to ¥1.4tn (~$14.2bn). The division saw its operating profit fall by 3% over the year, to ¥204bn (~$2bn).
Canon said it expected a further 1% fall in ILC sales during 2014, but only a further 20% decline in compact cameras. These figures would leave ILCs making up 42% of the company's camera sales in terms of units and 83% in terms of value (for comparison, just five years ago DSLRs made up 15% of camera sales and 44% of income).
Although none of these figures sound positive, IDC's research led it to conclude: 'Canon managed to gain share in the United States at the expense of nearly all other vendors with the exception of Sony, which gained a slight share in the ILC segment.'
Fujifilm's Electronic Imaging (digital) group saw sales fall 14.2% year-on-year in the three months to December, and 13.6% across the previous nine months. The Imaging Solutions division, of which Electronic Imaging is part, saw income rise 7.2% over the same period, thanks to sales of instant cameras and optical units for smartphones, TV cameras and projectors. The increased sales saw the division reduce its loses to ¥1.5bn, from ¥3.9bn over the same period in 2012.
The company doesn't give fine detail about sales of camera types, instead rather coyly saying that sales of its high-end X-series models 'proceeded smoothly.' This is contrasted with 'sales decreases due to the continuous worldwide decline in overall demand for compact digital cameras.'
Nikon blamed slow sales in the Americas, Europe and Asia for a 6% fall in net sales income - to ¥553bn (~$5.4bn). Despite this, the more rapid fall of compact camera sales, compared to ILCs and lenses meant that the higher-margin ILCs and lenses accounted for a greater proportion of sales - resulting in an increase in operating income from those sales.
|Sales in final 3 mths of 2013 (¥bn)||Digital Camera sales as proportion of whole company|
ILCs made up 33% of the company's sales volumes in the nine months to December, up from 28% the year before. However, the company made the third downward revision to its sales projections - now aiming to sell 6m ILCs and 8.4m lenses, rather than the 7.1m and 9.8m projected in May 2013. The weak Yen meant the company didn't reduce its sales target of ¥710bn, despite the reduction in unit expectations, but this had already been scaled-back from the original ¥810bn projection for the year.
Compact sales declined 33%, to 9.6m units for the first nine months of the year.
Olympus halved its camera division's operating loss over the nine months to December - losing ¥4.4bn over the period. Reductions in costs and increased mirrorless sales meant the company was able to make the improvement despite a 14% fall in overall sales values, compared to the same period the year before.
The value of mirrorless sales grew 5%, year-on-year, with them now accounting for around half of the company's camera sales by value. Much of this was generated by a 19% increase in the last three months of 2013. However, the company notes that lower PEN sales meant it didn't hit its sales target, suggesting much of this increase comes from the lower value of the Yen and a spike in sales of the then-new, range-topping OM-D E-M1 model.
The company also said it had reduced its compact camera inventory - meaning it is not sitting on warehouses full of compacts that will then have to be substantially discounted.
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