Christmas Selling Season – steady as she goes!

Started Feb 24, 2014 | Discussions thread
jkoch2 Senior Member • Posts: 1,198
Christmas Selling Season – not so steady!

HappyVan wrote:

Christmas Selling Season – steady as she goes!

IDC has reported (for subscribers) the camera sales results of the last quarter 2013. With DPR providing a short summary for Canon, Fuji, Nikon and Olympus.

The Xmas season continues the cyclical decline of camera sales.

Not cyclical.   Displacement by phone cameras makes the drop in P&S sales permanent, if not fatal.  Phone cameras also put a dent in demand for compacts or casual buyers of DSLRs.  Pro's upgrades of high-end equipment may also level off, or even sag, as the technical improvements mature and diminish.

Fortunately, the decline of the yen has reduced the pain. So, the big price cuts of 2013 will remain for the foreseeable future.

Some price cuts owed to over-supply.  As the manufacturers trim output to match demand, prices should firm or rise.  The companies can't go on selling cameras at a loss.

Bottom line for the big players is steady as she goes.

Almost so, for Canon and Nikon.  The others are still swimming against a stiff current.

The good news is that the collapse in compact camera sales is starting to de-accelerate. IMO, compact cameras will remain a substantial and important part of the industry.

As phone camera quality improves, demand for compacts could erode.

For Nikon, forecast for sales of of ILC continue to be revised down. Compact camera sales down 33% for the three quarters of the current fiscal year. Roughly in line with Canon which has a different reporting period.

Steady as she goes [downward]?

My emphasis added in upper case.

“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...

Bad for DSLR and worse for mirrorless.  If 23% of shipments generated only 18% of revenues, that suggests a unremunerative activity, probably the steep discounts to clear inventory.

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.'

Not good.

... 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...”

Not borne out by careful analysis.  The companies' public financial statements do not specifically differentiate operating profits from specific lines of cameras.  They share many of the same operating expenses.  The 2013 results were also skewed by P&S discontinuation charges and the fall in the yen.  The only clear information is that P&S or compact unit sales fell more than ILC unit sales.

Olympus struggles on. As expected, following Fuji to the high ground. Away from the fierce competition at mass consumer price points.

“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.

A decrease in losses is an "improvement" of sorts, but still not a path to success if sales volumes continue to fall or flatten.

The value of mirrorless sales grew 5%, year-on-year,

Less than the fall in the yen.  Measured in dollars non-Japan camera revenues would have been down.

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.

Careful: Yen translation effects.

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