Olympus trys to Calm our fears once more

Started Feb 14, 2013 | Discussions thread
Marty4650 Forum Pro • Posts: 14,397
Dave.... my view

And before I start I will freely admit I am no expert on this.

Ask yourself..... precisely what are the products that camera companies sell today, and who are their customers?

  • Compact cameras - These currently represent around half the dollar volume for camera makers, but this market has seriously been eroded by camera phones and tablets that have cameras. This is especially true at the low end of the scale. These customers are generally snapshooters who want ease, simplicity, and reasonably good results.
  • High end compacts - This is a small but important market, as some compact users move up and some DSLR users move down. But competition is fierce in this market as it is overcrowded with lots of $500 enthusiast compacts, high priced superzooms, and has competition from budget priced DSLRs and MILC cameras. Many of these are purchased as a second camera which means the owners are very likely to be enthusiasts.
  • ILC cameras - including both DSLRs and MILC cameras. The mass market doesn't spend thousands of dollars on their cameras. Only photo enthusiasts do that. And it is pretty easy to spend thousands of dollars if you own more than just a few kit lenses for your ILC. I don't think this market has changed at all. The only difference is that the soccer moms are no longer buying $500 DSLRs at Walmart. They are now using their smart phones.

The reason that some camera makers are losing money, and the rest have declining profits is that the mass market users are more and more satisfied with the results they are getting from their camera phones. The enthusiast base has not changed, it is still the same as before. What has changed is that casual users aren't snapping up cheap DSLRs anymore.

For around a five year period from 2006 to around 2011 owning a DSLR was a status symbol for some of the casual users. They would buy them at Costco, Walmart and Target for $500, or $600 with a two lens kit, and they felt like they were real photographers. They used their DSLRS on full auto at their soccer matches, little league baseball games, and on their vacation cruises. Every college girl in America with a DSLR thought she was a photographer.

But this has all changed. Today's status symbol for a casual photographer is a high end smart phone or better yet... a tablet. The best way to get attention today is to either show up with a full frame camera and a tripod... or take photos using a tablet held at arm's length. And the smart phone or tablet is a lot easier to carry around. Today the software of choice for causal users isn't Photoshop or Lightroom, it is Instagram.

There is absolutely no status in using a $900 MILC camera, because it looks just like a $90 Sanyo compact you bought at Walmart. And unless that $900 MILC camera has a built in EVF, it is used in precisely the same way as the $90 Sanyo. The only people impressed will be other MILC camera users, and some of the DSLR users. By definition, anyone using an ILC camera today is an enthusiast, and not a casual user.

The entire bottom end of the camera market has been a victim of technology. Once the results became good enough for casual users, there was no reason for them to buy high end enthusiast cameras. This same thing happened to the low priced camcorder and the mp3 player as they gradually got replaced by smart phones for the casual users of these products.

If I am right, then this means making more high end products, and making them better will NOT get the camera makers out of this hole. It surely will thrill the camera enthusiasts, but it won't do much to increase mass market sales.

The solution isn't a $2,000 budget priced full frame camera. Or a $3000 fixed focal length full frame compact. Olympus doesn't need a $1,700 OMD-Pro model, or a $2,000 E-7, or any more $2,500 lenses.... they need a $200 E-PM3 that has a touch screen and wifi connectivity if they want the casual users back. And even that might be a hard sell, since most people don't want to carry two devices when one device will do.

The high end of the market will always exist, but the mass market is moving in an entirely different direction. I really doubt this situation can be reversed.

This situation will eventually hurt Nikon a lot more than it will hurt Olympus, because Olympus does not depend on it's imaging division. They have demonstrated that they can survive due to their highly profitable medical devices division. Cameras and lenses are just a small part of their business at around 15%, while Nikon is primarily a camera company, at around 70% of sales.

The reason Sony is in deep trouble isn't just due to camera sales. It is because they are losing money selling everything except gaming devices.

One thing is very certain. The future will not be very much like the past. Camera makers will be forced to abandon mass market products or find a way to somehow offer more convenience and value than cell phones. In the end, they may have to retreat to the high end only, because that market will always be there.

It will probably be a very long while before we see any National Geographic cover shots taken with iPhones. And no one will pay a wedding photographer thousands of dollars if he shows up with a smart phone.

 Marty4650's gear list:Marty4650's gear list
Olympus OM-D E-M5 Olympus E-M1 Panasonic Lumix DMC-GM1 Panasonic Lumix G 14mm F2.5 ASPH Olympus M.Zuiko Digital 14-42mm 1:3.5-5.6 II R +11 more
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