Thom Hogan writes more about Nikon's plans for the coming year

Started May 19, 2008 | Discussions
Thom Hogan
Thom Hogan Forum Pro • Posts: 13,660
Re: Thom Hogan writes more about Nikon's plans for the coming year

Canadianguy wrote:

Interesting to note on page 11 they don't see a growth in market
share for themselves on the imaging side of the business - fixed at
40% but they see the overall pie increasing in size so that everyone
will benefit from the overall market growth.

Well, given that they've got a strong competitor with a similar share, it's unlikely that either can increase their share much, if at all. Historically, the highest share we've seen in SLR/DSLR history is about 60%, and that was at the end of the film era when most of the competitors had given up. More normal has been for the leader to be in the 40's.

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Thom Hogan
author, Complete Guides to Nikon bodies (18 and counting)
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kdc41 Forum Member • Posts: 60
Re: Thom Hogan writes more about Nikon's plans for the coming year

I can see the D300 sensor showing up in the D80 replacement this year and in the D60 replacement next year (at PMA 2009). I can see a new full frame sensor in the next high resolution camera (D3X?). But I'm not so sure about the future of the D3 sensor... I expect the Canon 5D replacement to have more than 12mp, and I'm not sure that the prosumer Nikon full frame (D10?) will be competitive with just 12mp. If Nikon plans to reuse that sensor, could it come up with a consumer full frame at some point? Like a D90 full frame?

Ken

Chris Elliott Veteran Member • Posts: 3,979
Re: Thom Hogan writes more about Nikon's plans for the coming year

kdc41 wrote:

If Nikon plans to reuse that sensor, could it come up with a consumer
full frame at some point? Like a D90 full frame?

That is exactly the Niche the 5D fills and most people expect the D10 to occupy. I would expect Nikon, having developed the 12Mpixel sensor to get their money's worth out of it. The number of megapixels matters not one jot. The output is stellar.

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plimkon Regular Member • Posts: 311
Thom--any word about 08 est in 07 vs 08 actual?

I looked up your archived notes and in may 07, nikon estimated:
total sales: 480b
operating income: 48b
dslr units: 2.5 million
coolpix units: 7.5 million
lenses: 3.5 million

but as per your front page, they totally walloped those estimates:
total sales: 586b (+22%)
operating income: 84b (+75%)
dslr units: 3.09 million (+32%)
coolpix units: (+24%)
lenses: 4.45 million (+27%)

did you hear any rumblings of how nikon is going to "spend" all this extra from projected?

surely, companies on these grand scales don't live on year-to-year projections...they've got to be planning on 3-5 year outlooks, and with (what seems to be) huge surpluses, does that throw in some extra "wiggle room" for some new stuff?

Dodi73
Dodi73 Senior Member • Posts: 2,053
Re: Thom Hogan writes more about Nikon's plans for the coming year

Thom Hogan wrote:

Dodi73 wrote:

Kept the first one, why Nikon should invest in three (average)
lenses? Couldn't they make only one good 24-135 F/4 AF-S VR FX and
save money?

Saving money isn't the goal of a business. Making money is the goal.
If all you make are high-priced lenses that aren't exactly the focal
length the user wants, they'll go to a third party who makes what
they want. Just as we have a range of bodies from D60 to D3, we need
a range of lenses from 18-55mm to 600mm (to use price as the range
determinate).

Thom I think in that case Nikon can just erode what Tamron is doing actually, not replace. If the 28-300 reveals to be a great lens for the price, none would ever buy a 24-120, more expensive and less versatile... Nikon should invest clearly in quality and speed, not always in sluggish 3.5-5.6 zooms. The 16-85 has for sure a great potential but try to think if just Nikon would have done it F/4 fixed aperture how many other people would have looked at it with lust. It's you who write "Let's repeat together to Nikon: F/4, F/4 F/4... not me"

PRO ZOOM: 24-70 F/2.8
PROSUMER: 24-135 F/4
AMATEUR: 28-300 F/3.5-5.6

I'm betting that the 28-300 and the 24-135 wouldn't be that different for price, but the amateur could have only one lens with him, the prosumer could count on a higher-than-average quality one. Of course, this is FX-wise, of course. I'm not considering DX here.

Of course you have to fight on several fronts, but where you fight you have to be sure to win, otherwise it's a loss of resources for other things and companies like Tamron - the first who's clearly believing in AF-S and VC potential - can be advantaged. Nikon shouldn't underestimate them.

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All the best
I'm on the NIK side of photography.

Thom Hogan
Thom Hogan Forum Pro • Posts: 13,660
Re: Thom--any word about 08 est in 07 vs 08 actual?

plimkon wrote:

did you hear any rumblings of how nikon is going to "spend" all this
extra from projected?

They've paid down debt (by over half in two years) and all overall liabilities are down, they've increased shareholder dividends, now they're talking about buying back shares. Cash has doubled, receivables are up a bit as are inventories.

44% of the unit value of shipments was DSLRs, 22% was lenses, meaning that about two-thirds of the overall revenue coming in is being generated from the DSLR area. Europe will remain at 32% of the imaging division's sales, North America is 33% next year versus 34% last year (Japan is the only gainer curiously).

I should point out that the imaging division ran a 14% sales/income ratio, which is a figure that I believe is unsustainable for a consumer manufacturing company (10% is a good sustainable mark). (I should say that the last six years I ran companies my division's ratio never fell below 15% and was as high as 40%, but that's just not a sustainable rate with competition in your market.)

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Thom Hogan
author, Complete Guides to Nikon bodies (18 and counting)
http://www.bythom.com

nikonrumors Junior Member • Posts: 46
Re: Thom--any word about 08 est in 07 vs 08 actual?

I do not understand why Nikon stock is not available on the US stock market. Don't they need more investors/cash? I guess not, based on the latest financial results.

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Because it is good to know...

Vandyu Veteran Member • Posts: 8,897
Re: Thom Hogan writes more about Nikon's plans for the coming year

Well, that's a chunk of change. But, on the bright side, it's cheaper than my first computer! Thanks, Thom. Wish Nikon models weren't always priced higher than Canon. I'll have to wait until the price falls a few hundred.

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Kokopelli_Rocks
Kokopelli_Rocks Senior Member • Posts: 2,528
Do low end camera DSLR buyers buy lenses?

Just wondering, when I see people with Rebels and D40s and D60s almost all of them just have the kit lens on the camera. The forums for these cameras talk a lot about budget 3rd party lenses. I am just wondering if Nikon is seeing less value in these cameras because they don't generate sales of high end Nikon lenses?

This is not a statement - more of a question, so don't jump on me I am just wondering.

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balster_neb New Member • Posts: 10
Re: Thom Hogan writes more about Nikon's plans for the coming year

Thom Hogan wrote:

balster_neb wrote:

It's not clear what Thom means by "upper end" cameras. Does that
refer to DSLRs in general, or only the pro-grade ones?

The statements were in Japanese, and I'm not 100% sure I'm
translating them correctly. The wording was vague but seemed to imply
that high-end consumer (which I read to be at a minimum D80 but more
like D200/D300) and pro bodies would be the primary emphasis in their
upcoming year plans. You can kind of get that from the numbers,
themselves. If Nikon had a D30 (or whatever you want to call it) up
their sleeves that broke new ground in either price or performance or
both one would think that this by itself would sell in the millions
of units. Before the D40/D40x came out, it was easy enough to see
their impact in Nikon's forward estimates: there was a clear uptick
in unit growth predicted just prior to their appearing.

What's interesting is that only two years ago Nikon executives were
quoted as saying that a US$399 DSLR was going to be necessary at the
bottom of the lineup. We've yet to see that, and Nikon's forward
numbers don't see to indicate it's coming from them anytime soon.

My take on the numbers coupled with other rumors is this for the
coming year:

D40/D40x sell off the remaining inventory and it's gone
D60 is new low end
D80 sell off remaining inventory and it's gone
D80 replacement coming
D300
D3
D3x coming
FX-frame D300-type camera coming

Thus, I'm predicting that by Christmas the Nikon DSLR lineup will
look like this:

D60, D90, D300, D3, D3x, and possibly the D10 or whatever the
lower-speced FX body is called.

I suppose the following link (and associated news story) clarify what Nikon meant by "upper-end":

http://nikonrumors.com/2008/06/03/nikon-to-concentrate-on-highend-digital-singlelens-reflex-cameras.aspx

They seem to refer to the high-end DSLRs. While this points towards a D3X in the very near future, I wonder what it means for the D80 successor.

If they really are focusing on higher profit margins, perhaps we'll be seeing a semi-pro FX DSLR before a D90.

Just speculation, of course.

Diddlbiker Contributing Member • Posts: 608
No, no, no, no, no...

I discussed the issue two weeks ago with a coworker (canon shooter) without having read the pdf. I regret that, because I almost look like a fool now! FWIW, we're market analysts at a Fortune-500 company. Not in imaging, but many camera manufacturers are our customer though.

His reaction was: "they have to be ... nuts to do that" (insert the f-word at the ellipsis). Why would Nikon give up the largest share of the market. The part where all your new loyal customers are coming from? The part that generates the volume that will surpress your overall production cost? The part that makes you visible in the market? The part that, per camera, doesn't make that much money, but by golly, you sell the units by the millions! That 40% market share that Nikon is showing in the pdf on the SLR markets is about UNITS , not dollars. And I'm willing to bet that the VAST MAJORITY of those units are D40/D60 cameras.

I suppose the following link (and associated news story) clarify what
Nikon meant by "upper-end":

http://nikonrumors.com/2008/06/03/nikon-to-concentrate-on-highend-digital-singlelens-reflex-cameras.aspx

They seem to refer to the high-end DSLRs. While this points towards a
D3X in the very near future, I wonder what it means for the D80
successor.

If they really are focusing on higher profit margins, perhaps we'll
be seeing a semi-pro FX DSLR before a D90.

Just speculation, of course.

Both the above link and the Nikon PDF are fairly clear on the whole thing and I don't understand why everyone is mis-interpreting this. Well, actually... I do. It's because we're all gearheads here.

Keep in mind that these articles are press papers, written for journalists, investment bankers and like. These articles are not written for dpreview gearheads.

Nikon Corp President Michio Kariya said Friday the company intends to boost

sales of its high-end digital single-lens reflex cameras, whose profit margins are
higher than those for other cameras.

This year, we will shift the focus of our strategy to strengthening brand power,' > Kariya said. He indicated that he does not mind if his company is replaced by rival > Canon Inc as the top digital SLR camera seller in Japan this year in terms of > volume. According to Kariya, Nikon places more emphasis on profitability than on > a market share.

Is this so hard to read? "High end" refers to "DSLR" in general, as opposed to compact cameras. Yes, WE call "high end" the D300 and above. But for the average journalist (PJ's excluded) and the average investor, ANY DSLR is high end.

How many times do we laugh when we see a D40 advertised as "professional" in a BB or CC flyer? Or cringe when our "Professional Camera Equipment" is not allowed in a stadium/concert hall/musuem?

THAT is exactly the "professional high end equipment" that Nikon is talking about. I highly doubt that Nikon is really so stupid to drop the largest segment in a highly profitable market to fully focus on the cameras for a bunch of freaks. Leica does that, and Hasselblad does that. I think that Nikon gets a lot more profit out of the D40 than those companies do out of their cameras.
Not per unit. But for a large company, only the bottom line counts.
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Cheers,
Bart

Jeri_ Contributing Member • Posts: 537
Re: No, no, no, no, no...

FWIW - You make total sense to me.

Jeri

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Stujoe Veteran Member • Posts: 5,857
Re: Thom Hogan writes more about Nikon's plans for the coming year

I don't think they need a D40 and a D60. They just need the D60 close to the current D40 price point. If that happens, then I think D60, D90, D300, D3 is enough of a differentiated and competative lineup.

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rhlpetrus Forum Pro • Posts: 26,472
Re: Thom Hogan writes more about Nikon's plans for the coming year

Stujoe wrote:

I don't think they need a D40 and a D60. They just need the D60 close
to the current D40 price point. If that happens, then I think D60,
D90, D300, D3 is enough of a differentiated and competative lineup.

The strategy of bracketing Canon's models worked well with D40/D40X/D90. My bet is that D40 goes out of lineup early in 2009, D60 is priced at under 500USD and a Dxx whatever comes between the D60 and D90, with LV and 12MP sensor. D90 will be priced higher than 450D, likely 1000-1200, so the gap is too large, moreover now with Sony playing hardball in the 500-1000 USD price bracket.
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Medic1210 Senior Member • Posts: 2,055
Re: No, no, no, no, no...

Jeri_ wrote:

FWIW - You make total sense to me.

Jeri

Me too. I guess we'll all see in a few months.

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Mike
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I'm not resourceful enough to insert a witty quip or intelligent quote here....

Thom Hogan
Thom Hogan Forum Pro • Posts: 13,660
Re: No, no, no, no, no...

Diddlbiker wrote:

Both the above link and the Nikon PDF are fairly clear on the whole
thing and I don't understand why everyone is mis-interpreting this.

Well, read on. You may be misinterpreting it, too ; )

This year, we will shift the focus of our strategy to strengthening brand power,' > Kariya said. He indicated that he does not mind if his company is replaced by rival > Canon Inc as the top digital SLR camera seller in Japan this year in terms of > volume. According to Kariya, Nikon places more emphasis on profitability than on > a market share.

Is this so hard to read? "High end" refers to "DSLR" in general, as
opposed to compact cameras.

Actually, go back and read the quote you quoted. I'll give you a moment. Read it again. One more time.

Okay, note the words "top seller...in Japan." The remarks actually seem very narrowly focused to a particular question he was asked. They're being interpreted much more widely than I think they were intended. There were other comments made during the press conference and after-interviews that do seem to indicate that Nikon is more interested in shoring up product margin this year than market share, and I'm struck by the fact that Sony may end the year with more low-end DSLR models than Nikon.

The curious thing is that we have players shifting all over the landscape:

  • Fujifilm out of DSLRs but a new push in compacts.

  • Pentax mostly out of compacts, emphasizing DSLRs.

  • Sony with so many low-end DSLR models, only one high.

  • Canon rumored going lower in DSLR models.

  • Sigma producing multiple APS compacts, no new DSLR.

  • Nikon with potentially 4 DSLRs that would be labeled "pro" (D300, small FX, D3, D3x).

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Thom Hogan
author, Complete Guides to Nikon bodies (18 and counting)
http://www.bythom.com

Tianium Veteran Member • Posts: 4,280
D90 not high end???

balster_neb wrote:

They seem to refer to the high-end DSLRs. While this points towards a
D3X in the very near future, I wonder what it means for the D80
successor.

If they really are focusing on higher profit margins, perhaps we'll
be seeing a semi-pro FX DSLR before a D90.

Just speculation, of course.

As always translations from Japanese are vague at best.

But they do seem to be talking about models with higher profit margines. This may well include a D90. I would think the profit margin in a D90 would be far higher than the D40/D60.

One of the key market strategies for the D40/D60 is price point.

The D80 is getting VERY long in the tooth now. It MUST be due for replacement.

Darin

David314 Veteran Member • Posts: 4,790
I agree with Thom

Here is a quote from the Nikon international site under investor relations Q&A

"Q: What marketing strategies do you have in place for the Imaging Products business?

A: Last term we concentrated on expanding our product line-up for digital SLR cameras. The new range of products were well received, allowing us to increase our market share, however this term we will be concentrating more to build a brand and the sale of our middle to high-end products. In that context, and in consideration of the effect of a sluggish economy on consumer spending, we anticipate growth in our shipments will fall slightly under that of the general market. "

now they use DSLR and middle to high-end products in the same paragraph - not exactly clear - if that is the middle of their whole camera line or the middle and upper tier of the DSLR line

interesting reading here

http://www.nikon.com/about/ir/event/frconference/briefing/pdf/08_all_e.pdf

look to page 16 and you see sales predictions for 2009 - only a small increase in total dSLR and P&S cameras

the currency valuation predictions are also interesting

notice page 20 of the above report where it lists shipment value by percent and DSLR is predicted to go from 44% to 47% of the shipped value while P&S cameras drop

In practical terms i think that means no D30 DSLR in the near future -

the rumored D3x and D90 seem very probabal as well as the D10 but probabaly later in the year or early next.

probabaly more lenses

so from the looks of it Nikon is planning on maintaining the current volume of camera sales both dSRL and P&S

putting it all togethor - it is pretty easy to support Thom's view

I also think it is a pretty good strategy - instead of slugging it out on the low end with say an Olympus which seems to be losing money on selling dSLR cameras - Nikon is going to go up a tier

I also was in a discussion with Thom and argued that the low end was more important but I have to confess, I have changed my mind and it was the D300 that has done it

Since I bought one, i have been astonished by the number of people who know about the camera and ask about it. Also, from the D300 forums i find a lot of people have bought it as their first DSLR. The camera has held its price well and that is a great place to be.

so anyway, we will see what Nikon pops out of the factory in the next year

David

rhlpetrus Forum Pro • Posts: 26,472
Re: No, no, no, no, no...

Thom Hogan wrote:

The curious thing is that we have players shifting all over the
landscape:

  • Canon rumored going lower in DSLR models.

The so-called EOS 1000D? What, a cheapie 8-10 MP camera with LV?

  • Nikon with potentially 4 DSLRs that would be labeled "pro" (D300,

small FX, D3, D3x).

Looks like Nikon is getting back to where it was 40 years ago, the very top of portable camera market (essentially Nikkormat and F/F2 Photomic then, no compact, or, yes, one, Nikkorex, a big flop).

IMO a mistake, they should keep the entry-level market they earned (with a great effort), launching a D60+ at 12MP and LV for about 700USD and letting D60 slip to 450USD as D40 is now.

The present market requires all types of camera levels, since once one starts investing in lenses at the bottom, the chances of changing systems later is less and less.

One interesting fact: from 1948 (launch of first Nikon RF) to 1960 (end of RF cycle), Nikon sold the GRAND total of 140,000 RF bodies. Now, in one month, they sell about twice that number in dslr bodies.

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Barry Fitzgerald Forum Pro • Posts: 29,888
Re: No, no, no, no, no...

Thom Hogan wrote:

  • Fujifilm out of DSLRs but a new push in compacts.

I heard the S5 was not a great seller, but fuji owners are convinced a new "higher res" fuji is on the way...no idea myself.

  • Pentax mostly out of compacts, emphasizing DSLRs.

Pentax are a small player for compacts..and most of them are not that great anyway..no loss being honest. They need either a big K20d price cut, or something pretty nice to turn up soon.

  • Sony with so many low-end DSLR models, only one high.

Strange move, as a KM user I expected a mid point A500, never turned up. I think sony will sell well, esp with the low end stuff, A200 is very cheap in europe..and some do like the live view. Just dont look at the accessory prices! The A900 FF could turn heads..or it could just be a "trophy camera" ie we can do this..but sell not that well. I think its all low end push on sony...

  • Canon rumored going lower in DSLR models.

Agree, its getting a bit boring just putting out the "last years retired model" in the superbudget zone. canon look at nikon with their D40..and think..hmm we want some!

  • Sigma producing multiple APS compacts, no new DSLR.

SLR probably not, handles like a dead cat..shame, some potential. Sigma are appaling on prices..and the name doesnt pull buyers in. More APS compacts..can they release one that people can afford though???

  • Nikon with potentially 4 DSLRs that would be labeled "pro" (D300,

small FX, D3, D3x).

Looks pretty solid..no shocks there. Nikon need that D90 out ASAP though..time drags on.

And you have to feel for old Ken Rockwell, no new Nikon's to review..and I did like his "pizza critique"
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