Yosuke Yamane, Director of Panasonic's Imaging Business Division, pictured at the Consumer Electronics Show in Las Vegas, in January.

At last month's Consumer Electronics Show in Las Vegas we sat down with Yosuke Yamane, Director of Panasonic's Imaging Business Division, to discuss market reaction to the S1-series, full-frame strategy and the state of the L-mount alliance.

How have the S1 and S1R performed in the market?

It fluctuates month by month, but in the $3,000 / €3,000 price range, we have gained roughly a 10% market share, globally. That was the result we were hoping for.

With the S1 and especially the S1R we were targeting high-end customers in the full-frame market. Over the past eight months we’ve been able to penetrate that market and we are satisfied with the sales, so far.

We’ve had great reviews from magazines and websites, and we just won the Gold Award at the prestigious Camera Grand Prix, in Japan. Only one camera can be selected as best camera in a year, and we got the number one award. We’ve been in the industry for twenty years and this is the first time we won the Grand Prix award, so we’re very satisfied.

What kind of differences are you seeing between the kinds of people buying the S1 versus the S1R?

With the S1R, we were targeting high end stills photographers, whereas with the S1 we were targeting both video and stills customers. So-called ‘hybrid’ photographers. And the customers who are purchasing the S1R are mostly stills photographers, whereas S1 customers are shooting both video and stills.

These days a lot of professional photographers are stepping into the videography area, and we want to support those photographers with the S1.

Do you have any idea of how many S1 purchasers have paid for the SFU2 video firmware upgrade?

The S1 outsells the S1R, and roughly speaking, probably 20-30% of S1 customers are purchasing the SFU2 for the upgraded video customers.

The Panasonic Lumix S1 is a 24MP full-frame camera aimed at enthusiast photographers and videographers. Unsurprisingly, it has out-sold the more expensive S1R, but it's interesting to learn that up to a third of buyers have paid for the SFU2 upgrade, which adds video features.

What kind of people are buying the S1H?

Videographers and cinematographers, as we expected.

Panasonic already has a range of high-end dedicated video cameras - what specific need was the S1H designed to meet?

These days, more and more filming is done using drones and gimbals. The S1H is designed to be more flexible for those [kinds of] unique requirements.

Where do you see the biggest opportunities for Panasonic, in the next few years?

We believe that our video features are one or two steps ahead of our competitors, and we have an advantage there. For example, with the S1H which we released a few months ago, the sales performance is exceeding our original expectations. But the video performance of the S1H was designed to meet the needs of high-end videographers and cinematographers, so for amateur or hobby videographers, the S1H may be over-specced.

Our video features are one or two steps ahead of our competitors

We believe that what the market is telling us is that in the near future, all those video features should be available from high-end to enthusiast-level videographers. That’s the demand that we need to meet.

Do you see more long-term opportunity in the full-frame market, compared to Micro Four Thirds?

One advantage of Micro Four Thirds is the deep depth of field. Which is also good for video. With that unique feature, we want to support both stills and video photographers. Whereas big sensor cameras have a shallower depth of field, which suits different requirements. Those two categories [of needs] are different, and we satisfy both.

We want to target different customers, and we will keep developing cameras for both categories - full-frame and Micro Four Thirds.

The S-system consists of some very high-quality cameras and lenses, but the current lineup includes some seriously chunky products - especially lenses. According to Mr Yamane, customers are asking for smaller products.

The fact is that the full-frame camera market in the US is expanding rapidly. But as you know, full-frame sensors are 4X bigger than Four Thirds, which means that the lenses also need to be big. Which means that [our] full-frame camera system, even though it’s mirrorless, is bigger than Micro Four Thirds. We believe that the two categories can co-exist. That’s why we keep pursuing both [product lines].

Some manufacturers, as you know, are making very small lenses, compatible with full-frame, but we think that to do this, they needed to sacrifice lens quality to a certain extent. That’s how they are able to make them so small. That means that those lenses are not fully utilizing the benefits of the full-frame sensor. When it comes to Micro Four Thirds, we can fully utilize the benefits of the sensor, and we believe that as a combination, the overall quality of Micro Four Thirds can be very good.

Which countries generates the biggest sales of full-frame, and Micro Four Thirds products respectively?

There’s not much difference, country by country, in terms of percentage of sales.

Panasonic now supports two interchangeable lens systems – Micro Four Thirds and L-mount – but they’re not directly cross-compatible. You’ve told me before that Panasonic will not create an APS-C lineup – is that still the case?

As of now, we have no plans to enter the APS-C market, because we know that Micro Four Thirds and full-frame can coexist without any cannibalization.

Promoting the L-mount alliance is very important for us because it gives our customers confidence in the [mount] over the coming years

If we moved into APS-C, there might be some overlap between Micro Four Thirds and APS-C, and between APS-C and full-frame, so I don’t think we’ll go in that direction.

What is your strategy to attract entry-level photographers to full-frame?

As you know, we have an alliance with Leica and Sigma. Between the three manufacturers, there are 47 lenses available. We think that with this combination of different cameras from the three manufacturers, and lenses, from the high-end to the mid-class, we are starting to satisfy entry-level to enthusiast users.

So you don’t mind if an entry-level customer comes into the L-mount via a Sigma or Leica camera?

Initially, we really wanted to appeal to high-end users, to show that we could make those high-end cameras. To prove the quality of our cameras. In the future, we’re going to introduce mid-class, and different ranges of cameras.

But those future cameras will still be full-frame?

Yes. Two different [L-mount systems] would be too much for us!

What are the most important priorities for evolving the S1 lineup, in the future?

Overall, we’ve had a lot of appreciative comments from high-end users. What’s hindering us in the lower-end segment is size, weight and price. So we need to understand those obstacles, and we’re considering the development of new products in order to penetrate into a wider market.

The S1 (left) has a sensor 4X larger than the GH5S (right). According to Mr Yamane, if the company expanded its lineup of L-mount cameras to include APS-C models, this might risk cannibalizing sales of its Micro Four Thirds bodies.

How has your relationship with Sigma and Leica evolved over the course of your alliance?

We meet periodically to [maintain] our relationship, and right now we’re discussing how to expand the L-mount system. We need some new ideas to expand the system to a wider variety of customers. We cannot disclose details, but [at the moment] we’re discussing changes to the communication protocol between the cameras and lenses.

The number of members of the L-mount alliance may increase in the future

Promoting the L-mount alliance is very important for us because it gives our customers confidence in the [mount] over the coming years. So for example, we’ll have joint booth areas at tradeshows, and maybe in stores we’ll have touch and try opportunities for consumers to try the products from all of the alliance members.

What has been the most important or valuable aspect of your collaboration with Sigma and Leica?

With Leica and Sigma, we [hope to be] offering L-mount cameras forever. If you purchase a camera from another brand, you have to rely [solely] on that brand. But we are three, and because of that we can give our users the assurance that the L-mount alliance is not going to disappear.

Is there a risk that some of your competitors might disappear?

It may be hard for some manufacturers to survive in this difficult industry, but we are a combined team, and if we stay united I think we will survive. Please understand that this is purely hypothetical, but the number of members of the L-mount alliance may increase in the future.

Is this something that has been discussed?

There are no concrete ideas, but we wouldn’t pass up such an opportunity.

Late last year, Panasonic teased an 8K camera, and hinted that this technology might make it into the Lumix line. That may yet happen, but according to Mr Yamane, it won't be for a while.

Can you share any more details of the 8K camera that was talked about at IBC? There was a hint that this technology might start being included in Lumix cameras after the 2020 Olympics.

At this time, the only 8K camera we have planned is for the Olympic games, which is only a few months away. Our feeling is that the 8K era is a little bit delayed. But we want to catch that opportunity and we haven’t given up our pursuit of 8K cameras.

So there are no immediate plans to introduce 8K capture into the Lumix line?

We will be ready for 8K soon, but we can’t tell you the timing. We need a little bit longer before we can introduce 8K cameras. It won’t be [in the very near future].

Editor's note: Barnaby Britton

I enjoy speaking to Mr. Yamane, whenever I get the opportunity. Like Mr. Yamaki of Sigma (the two are friends) he is reliably candid, and has a firm grasp of the many challenges and opportunities facing Panasonic. No executive can be expected to reveal concrete plans for future products or projects, but Mr. Yamane's hints at more (and smaller) S-series products, and possible changes to the L-mount data protocol are intriguing.

Also intriguing (but understandably couched in purely hypothetical terms) was Mr. Yamane's comment that the L-mount alliance might expand, to incorporate more than three members. With so much of the full-frame market still in the hands of just three manufacturers (Canon, Nikon and Sony) it's interesting to imagine other players joining up to the L-mount, but hard to imagine who they might be.

Olympus has said (repeatedly, and recently) that it has no interest in full-frame, which really only leaves Fujifilm and Ricoh. I very much doubt that Fujifilm would see much potential benefit from supporting a third mount, incompatible with either of its existing XF and GF systems, and with potential overlap, but Ricoh? You never know.

Mr. Yamane's claim of a 10% share of the €3,000+ market, globally, counts as strong performance

Away from hypotheticals, the S1 and S1R have been on the market for a while now: long enough for Panasonic to get an idea of how they've been received. Anecdotally, neither model seems to be selling in huge numbers (at least not in the US or UK: the two territories in which I've recently had the opportunity to speak to staff in specialist camera stores) but Mr. Yamane's claim of a 10% share of the €3,000+ market, globally, counts as strong performance from a new line.

Of those sales, it seems that the S1 has the larger share. This is unsurprising since a) it's cheaper, and b) it's more versatile, with a deeper video feature set. Interestingly, up to a third of S1 buyers have opted to pay for a firmware upgrade which upgrades the camera's video features even further. Meanwhile, the S1H is (no surprise) attracting the attention of dedicated filmmakers.

Panasonic knows how to make great video cameras, and the videography market is clearly of key importance to the company. What's most encouraging from talking to Mr. Yamane is that he believes great video should be available throughout his company's product lineup - not simply in the flagship products.

And 8K? Well, it looks like we'll have to wait a little longer for that.

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