Different strategies – the struggle for the 21st Century

Started Feb 9, 2012 | Discussions
HappyVan Senior Member • Posts: 2,396
Different strategies – the struggle for the 21st Century

Different strategies – the struggle for the 21st Century

With the launch of Fuji Pro, Pentax K-01, Canon G1X and Oly EM5; the industry trends are becoming clearer. The remarkable feature is that each brand is executing a different strategy with regards to their future positioning.

Each brand’s strategy is strengthened or weakened by their past history, and their ambition (or lack of).

Pentax

Struggling to survive the transition to digital, Pentax has only 3% of ILC 2011 sales in Japan. Yet, they have launched two CSC formats (Q and K).

Suggests to me that Pentax DSLR is about to end as the company bets everything in the growth mirrorless industry. The Q format is the super-compact system, while K retains some of the SLR's purposefulness (IQ and lenses).

Problem for K format is that they are following in the footsteps of 43 format, as they attempt to keep their SLR faithful. And, Q has no momentum. Pentax is just hanging on, at a time when they need to lead.

Fujifilm

Struggling to survive the transition to digital, Fuji has experimented with new sensor and AF technology. Finally, they appear to be settling into a niche strategy.

Successful with the premium X100 camera, Fuji is going with premium CSC. Look at the price of their camera and prime lenses! The high prices suggests that Fuji doesn't have the economies of scale for a competitive mass market strategy.

Sony

The digital age has allowed Sony to become a serious player in still photography. Parleying their strength in sensor technology, Sony is now one of the big three (in terms of industry importance) because of their sensor biz and growing NEX brand.

Problem is that they have not deployed their video expertise to the same degree as Pany (GH cameras). Their innovative SLT technology has not paid off. Whilst the expensive A-mount adapter has not made much of a difference to NEX customers.

Instead, their brand is focused on high IQ from large sensors (APSC). However, their NEX lens selection and quality is unremarkable!

Clearly, Sony has tremendous engineering abilities, but is struggling with the vision of where they should be in the future. Very different from Nikon's integrated strategy. Hopefully, the 15 new NEX lenses announced in their latest road map will make a difference.

M43

M43 has had two years as the sole CSC format. In Japan, they represent a sizable chunk of the ILC market. Yet, their global market share is small compared to Canikon's 14 million DSLR.

Pany's larger cameras (G/GH) have had no significant impact. Could the retro-style OMD change that? Will weather seals impress the mass market?

The fundamental problem is that Pany and Oly tried to do things on the cheap. They used components off the shelf which meant that they had no distinctive competitive advantage. NEX has the best IQ and highest resolution. NEX 7 has the best EVF. N1 has PDAF and shooting speed/buffer.

As a result, Oly and Pany are only #4 and #5 ILC brand in Japan. Oly's new 5-axis IBIS looks interesting. Is it too little too late for them? How fast can M43 deploy competitive products at a competitive price into the $500-$800 price points?

Canon

Canon has made the digital transition well. In 2005-8, they looked like they might annihilate Nikon. Since then, Canon has made improvements but not breakthroughs. The only Japanese brand without a MILC competitor.

Yet, the G1X is a significant development. Canon could remain profitable and relevant with premium fixed lens cameras based on a sensor of medium size (M43 size).

Compact cameras outsell DSLRs by 100m to 15m globally. So, Canon could sell a million (or two) fixed lens high IQ cameras. IMO, a viable competitor (based on value) to the $300-$600 CSC competitors (EPL, EPM, GF, G, NEX 3/5 and J1).

Canon isn't dumb. The question is how fast they can roll out the compact cameras with medium sensors?

Next post has the discussion of Nikon's integrated strategy.

Fujifilm FinePix X100 Nikon 1 J1 Pentax K-01 Sony Alpha NEX-7
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OP HappyVan Senior Member • Posts: 2,396
Does Nikon have a better vision?

Does Nikon have a better vision?

Nikon is gaining sales in every format; compact cameras, MILC, APSC and FF. IMO, this is a reflection of a determination to win. Nikon is saying that every format can be profitable and relevant.

The key is the 2.7x crop N1 system. Eventually, premium fixed lens cameras will have N1 sensors (unlike Canon's bigger sensor). So, it will be an easy transition for compact camera upgraders.

At the same time, it implies that Nikon intends to shrink DSLR. First by miniaturizing the body. The 36mp D800 (900gm with battery) is already much lighter than 12 mp D700 (995gm without battery).

Then, eventually by eliminating the mirror box (another big round of lens changes) when the key elements are in place (OLED EVF, mirrorless PDAF etc).

The key is performance. The N1 system is not an inferior camera class. Nikon has not reserved PDAF for DSLR and fast fps/buffer for pro cameras. N1 has something of the best of everything. And, the best of N1 technology can be deployed into compact cameras.

I would suggest that Nikon intends to demolish our current hierarchical understanding of the digital industry (FF at the top, compacts at the bottom). Nikon is changing the game with a vision for the 21st Century. Nikon is the one to watch.

Summary: Many different strategies. Pentax is following customers into MILC. Fujifilm is choosing to be a niche player. M43 is facing real competition and needs to deliver value in the crucial $500-$800 price points. Sony is customer-oriented but needs to define more clearly what makes them outstanding. Canon appears to stubbornly stick to bigger sensors despite the size factor. Nikon goes for a strategy based on the 21st Century.

Conclusion: Currently, the region between compact cameras and DSLR is a bewildering choice of different sizes, competitive strengths and price points. NEX has the best IQ from a big sensor. Canon is going the same route. M43 uses a medium sensor. Pentax Q is the smallest package. Nikon is the only game in town for moving subjects. Enjoy!

That said, one has to be careful if you are making a large investment in gear. By 2015, we could be left with only three serious players (as Thom Hogan suggests).

This is a think piece. So, let's discuss this carefully and with respect for each other. Ignore it if you're not interested. Thanks.

Bangers and Mash
Bangers and Mash Senior Member • Posts: 2,447
Re: Does Nikon have a better vision?

HappyVan wrote:

Does Nikon have a better vision?

I'm not an expert in this area, so I won't go on much with it other than the fact that I feel Nikon held back in its answer to the competition in mirrorless cameras because of the needed time necessary in developing something totally different than the rest of the pack who were pumping out camera after camera along the same lines of technology each shared. Perhaps Nikon's new 1 system cameras might start a trend. Who knows?

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Bruce McL Senior Member • Posts: 1,399
Re: The struggle for the 21st Century

You didn't mention Apple. Surely they will be a factor in reducing the demand for dedicated P&S cameras in the next few years. Android based devices will play their part in reducing the P&S market as well, I don't want to leave them out.

I think that phones, tablets, iPod touches, "phablets" like the Galaxy Note, etc. could kill off a couple of the less successful dedicated camera makers before too long.

In five years, what must a dedicated camera be in order to get people to buy it and use it instead of their phone?

Note that Sony bought into the DSLR game with Konica/Minolta's system, although they did have the awesome R1 camera before that. I am impressed with how Sony is gradually but continually tinkering, improving and innovating.

I can understand Canon's actions. The production costs of DSLRs must be pretty low by now, so they will sell as many as possible for as long as possible. I don't expect them to innovate, because they make a lot of money from the status quo.

The J1 is my first Nikon camera. I am impressed by the thought that went into it. I do think that, with the 1 system, Nikon has put some thought into what people will be looking for in 4-5 years.

Bigger may always be better than smaller, but what is perceived as "good enough" or "big enough" could change as you suggest.

peter42y Senior Member • Posts: 2,201
Re: Does Nikon have a better vision?

quote

I would suggest that Nikon intends to demolish our current hierarchical understanding of the digital industry (FF at the top, compacts at the bottom). Nikon is changing the game with a vision for the 21st Century. Nikon is the one to watch.

unquote

I do not agree Nikon does want to demolish the current hierarchy in the digital industry. On the contrary : Nikon does want to preserve it.

Canon had the G series. Nikon made the nikon p7000 and 7100.

In a relatively small sensor they did a wonderful camera full of buttons and control. A Small sensor with a DSLR camera.

Meanwhile the m4/3 was gaining traction as well as Sony NEX.
Nikon was forced to reply to this threat .
They launched their own mirrorless camera.
This time they used a larger sensor ( but not as large as DSLR one ) .
The body : A body with no buttons . A body in which the settings are buried.

P7100 - DSLR BODY - small sensor.

J1 - Point and shoot body ; Not even hotshoe for flash. - larger sensor.

Both the 7100 and the J1 have shortcomings.

The only line that have DSLR bodies and large sensors is the old dslr line.

In other words : Nikon does launch cameras with shortcomings in order to protect their DSLR line and to keep digital hierarchy as it is.

In the top : DSLR.

Next J1/ V1

Next 7100

Next point and shoot.

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(unknown member) Senior Member • Posts: 2,308
Re: Does Nikon have a better vision?

peter42y wrote:

In other words : Nikon does launch cameras with shortcomings in order to protect their DSLR line and to keep digital hierarchy as it is.

Unfortunately I have to agree.

I know the guy is over-quoted these days, but from the Steve Jobs bio: "One of Jobs’s business rules was to never be afraid of cannibalizing yourself. “If you don’t cannibalize yourself, someone else will,” he said. So even though an iPhone might cannibalize sales of an iPod, or an iPad might cannibalize sales of a laptop, that did not deter him."

Bruce McL Senior Member • Posts: 1,399
Re: Does Nikon have a better vision?

Mouser wrote:

peter42y wrote:

In other words : Nikon does launch cameras with shortcomings in order to protect their DSLR line and to keep digital hierarchy as it is.

Unfortunately I have to agree.

I know the guy is over-quoted these days, but from the Steve Jobs bio: "One of Jobs’s business rules was to never be afraid of cannibalizing yourself. “If you don’t cannibalize yourself, someone else will,” he said. So even though an iPhone might cannibalize sales of an iPod, or an iPad might cannibalize sales of a laptop, that did not deter him."

I don't put all the blame on Nikon. First, it is extremely difficult for any successful company to bring out a product that disrupts their own business.

Second, it seems like all of the other camera companies try to protect what they have as well. For example, it took Panasonic to popularize wide angle and hardware based image stabilization in point and shoot cameras. They didn't have any "big camera" business to protect at that time, so they had nothing to lose by making P&S cameras better.

OP HappyVan Senior Member • Posts: 2,396
Photography as solutions

peter42y wrote:

In other words : Nikon does launch cameras with shortcomings in order to protect their DSLR line and to keep digital hierarchy as it is.

I have a different take.

In the past, action photography was limited to $$$ big cameras. In the new paradigm, Nikon seems to be striving for a solutions approach. The limiting factor is the amount of electronics they can cram into the body.

If I am correct, PDAF will be possible in every segments (compact, N1 and big cameras). The difference is the power of the camera. Compact cameras will have low fps and small buffer because of the small body. N1 has fast fps and good buffer. Big bodies will have powerful AF and big buffers.

In the meantime, most of the other brands are still striving for good IQ.

The implication of an integrated Nikon strategy is important. The N1 sensor will have very good economies of scale if it is sold in the millions. Nikon doesn't need Sony here.

In fact, N1 sensor is a Nikon effort and manufactured by Aptina. Of course, Nikon will still share sensor technology with Sony where volume is small, e.g. D3X and D800.

What are the implications for the other brands?

normsmith Veteran Member • Posts: 3,372
Re: The struggle for the 21st Century

In other words : Nikon does launch cameras with shortcomings in order to protect their DSLR line and to keep digital hierarchy as it is.

On the face of it, it looks exactly like the N1 has been placed in such a way that neither the p7100 or DSLR lines are directly threatened and that the new product will actually grab new market share.

HOWEVER, Nikpn say that development of N1 took four years, that being the case, you have to wonder what will roll off the line in say 12 - 18 months on the DSLR side of things. If we do keep the DSLR mount but lose the mirrorbox and also get some of the amazing features of the N1 in DSLR's then the differences between N1 and DSLR's will be viewed in a different light than they are at this moment in time and users will likely have a better feel for which single system suits them best as both systems will be on a more parallel couorse.

The production costs of DSLRs must be pretty low by now, so they will sell as many as possible for as long as possible. I don't expect them to innovate, because they make a lot of money from the status quo

The innovation in the DSLR world has been huge in terms of auto-focus and sensor design and live view / video. Even my 'simple' D5100 blows everything else I have owned at that level away in terms of capability and image quality.

While digital was looking like 'maturing' just a coiple of years ago, the new technologies have exploded into a new golden age of digital improvement, 2012 is a massively exciting time in the camera world. I believe that the next 12 - 18 months will bring DSLR's (currently on the drawing boad - and the J1/V1 is a hint of what is to come) that will just be total game changers.

In the past we have had film users not wanting to go to digital (most now have), DSLR users not wanting Live View (but this is now seen as a massively valuable asset - or you can simply not use it) and DSLR users not wanting to lose their OVF (yet the march onwards of ever improving EFV is relentless). In 18 months time, the workings of a DSLR will be unrecognisable from something of 5 years ago (as the Sonly SLT's are showing). So I think DSLR's have been and will remain at the cutting edge of innovation.

VBLondon Regular Member • Posts: 470
Re: Does Nikon have a better vision?

Mouser wrote:

peter42y wrote:

In other words : Nikon does launch cameras with shortcomings in order to protect their DSLR line and to keep digital hierarchy as it is.

Unfortunately I have to agree.

I disagree, or at least it's not as clear to me as the standard forum-myth-wisdom that the 1 System main design criteria were to avoid competing with DSLRs.

First point: Remember the CSC history. m43 launched with some more 'enthusiast' models. Then Sony launched the NEX. Oly and Pana followed with endless iterations of consumer-orientated bodies (eg. the GF1-2-3 progression). It seemed that all the volume in the CSC market was for very compact very consumer bodies. So Nikon targeted that same market with the J1 and V1. Seems sensible to me. That is where the volume is, and the sales figures suggest it's working.

Second point: People assume "not competing with DSLRs" because of the lack of manual controls. Who's to say that's the key factor? It may be for enthusiasts, but I'd guess that focus performance, operating speed, image quality and low light performance are the key reasons most people by APS-C DSLRs. Well, on the first two, the 1 System out-competed m43 IMHO and matched it in the last 2. My V1 is a more credible DSLR competitor than most CSCs, relative to my personal preferences on focus/operating speed.

I don't actually believe Nikon desgined the 1 to avoid competing with DSLRs. I think they desgined it to maximise 1 sales in what was already a crowded market.

I do agree that it needs a more enthusiast body. I like my V1, but I'd like a 1 system take on the OM-D, which to me is a more attractively designed camera. The firmware fixes and a standard fast pancake would be a nice start.....

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ConJunTuraL New Member • Posts: 14
Weight a moment!

I believe the future points to small lenses, light yet powerful and with excellent IQ!

This makes possible small sensors and almost pocketable bodies. Technology will take care of IQ as we have seen in those last years. The sensors can easily duplicate or triplicate those pixels in months!

I'll put my money on the new Nikon 1!

(I just don´t understand why the camera-makers have not yet put a micro 3G slot in they cameras! They know what PS means but they have to understand that people love PSP (point&shoot&publish) like the Instagram phenomenon! Is possible to put much more quality in those easy, funny, and LIVE pictures! Right?!
There are already cameras with wi-fi capacity... it's OK but not the good path!)

Bruce McL Senior Member • Posts: 1,399
Re: four year development

normsmith wrote:

HOWEVER, Nikpn say that development of N1 took four years...

I think that four years number is misleading. I'm sure Canon and Nikon have good research departments. When they heard about 4/3 and micro 4/3, I'm sure they each came up with several alternative designs that could compete.

I seriously doubt that marketing told them to go full speed ahead right away. I think they waited until the PEN cameras started selling.

So, the first 1 System mockup camera took less than a year, it sat on a shelf for two years plus, and then when the PEN sales numbers started climbing, marketing took a second look at the alternatives that R&D had, chose 1 System, and told them to get it in production in a year. That's my view of the four years in development.

(unknown member) Senior Member • Posts: 2,308
Re: Does Nikon have a better vision?

The thing is that Nikon's announcement specifically says that J1 is for "lifestyle" and V1 for "enthusiasts". In my view they hamstrung what is a very impressive camera with limited features and minimal external controls. The J1 makes sense to me, but they didn't add enthusiast features and controls to what they claim is the enthusiast camera.

This has to be the result of either rushing the thing to market (e.g. with incomplete firmware) or trying hard to avoid impacting DSLR sales. Given the four-year development cycle, I don't think this was a rush job...

D200_4me Veteran Member • Posts: 3,980
Regarding Fuji

Specifically, the X-Pro 1...

If that camera works well, it is probably worth the price they're asking. They claim it's a pro level camera. I honestly could see myself selling my D700 in a few years and going totally mirrorless if there's a mirrorless camera that has image quality or better as the D700, has good quality video, has a great autofocus system, good lens selection and has a great metering system. I naturally assumed I'd want to upgrade my D700 to something like the D800, but now I'm not so sure. Within 2 or 3 years, I think there will be a mirrorless camera that does have everything I'm looking for, as far as a more pro level body goes. Honestly, if the V1 had more resolution and the same or better image quality as the D700, I'd even be content to only have a V1. In the end, it's all coming down to being able to make the photo I want. I'm not totally locked into buying another SLR. I'll keep looking at what's available, but for now, I'm going to wait awhile and see what comes along.

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peter42y Senior Member • Posts: 2,201
Re: Does Nikon have a better vision?

Mouser wrote:

The thing is that Nikon's announcement specifically says that J1 is for "lifestyle" and V1 for "enthusiasts". In my view they hamstrung what is a very impressive camera with limited features and minimal external controls. The J1 makes sense to me, but they didn't add enthusiast features and controls to what they claim is the enthusiast camera.

This has to be the result of either rushing the thing to market (e.g. with incomplete firmware) or trying hard to avoid impacting DSLR sales. Given the four-year development cycle, I don't think this was a rush job...

Exactly. This is exactly what I meant in my previous post.

Nikon could have placed the j1 sensor in a 7100 body with interchangable lenses.

But they did not do it. Why ?
Because they want to preserve their DSLR sales , dominance.
On purpose they did a crippled camera ( no external controls ).

As I wrote the 7100 has a great body and small sensor.
The 1 line has much better sensors but a body without the controls of the 7100
Only the DSLR has ( almost ) it all.
external controls and a good sensor.

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Bruce McL Senior Member • Posts: 1,399
Re: Does Nikon have a better vision?

peter42y wrote:

Exactly. This is exactly what I meant in my previous post.

Nikon could have placed the j1 sensor in a 7100 body with interchangable lenses.

But they did not do it. Why ?

In my opinion, none of the camera companies make decisions based on trying to win. They make decisions based on trying to avoid losing. The more a company has to lose, the less they will be inclined make a change that upsets the existing order.

stasvolik Contributing Member • Posts: 569
Hear, hear!!! 100% agree n/t
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Cheers,
Stas.

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bgD300 Veteran Member • Posts: 4,552
Re: Different strategies – the struggle for the 21st Century

I think your title is a bit pretentious.

Here is a camera from 1912

Our 2012 cameras are going to look just as dated in 2112.
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OP HappyVan Senior Member • Posts: 2,396
Re: Different strategies – the struggle for the 21st Century

Our 2012 cameras are going to look just as dated in 2112.

Not this baby

http://www.dpreview.com/reviews/nikonv1j1/page4.asp

BTW, I'm not talking merely about a camera. I'm refering to a different perspective on the industry.

I do hope that we will see PDAF in compact cameras. That's way more significant than the conversion of DSLR to mirrorless.

bgD300 Veteran Member • Posts: 4,552
Re: Different strategies – the struggle for the 21st Century

Phase difference has been used in electronic signals for years, dating back to WW II. The ability to put the sensor and processing into a package as small as a camera isn't that surprising.

If anything broadening the concept beyond cameras would mean posting a lot of images of gear from 1912 compared to similar devices today. For example, the much vaunted electric car of today can actually trace it's roots to the 19th century. It is only the technology improvement in batteries that has made them somewhat viable today.
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