Report: Canon is lowering profit forecast 20% due to shrinking camera sales

You're actually highlighting Canon's problem. The M50 is #1 with 18.2% of sales but sells for 25% less money than the A6400 which is #2 with 15.4% of sales. So it's a difference of only 3% in sales share, but Sony is able to rake in 25% more money! The point is that you can make your market share numbers look good by selling cheap cameras, but that's not necessarily good for profits. The Sony A6400 sells nearly as well as the M50 (only a 3% difference) but Sony is doing so with a camera that is priced much higher!

Long-range plan maybe, but they should really unfold it now because there's no such thing as a long-range plan when you're in the grave.

Canon is the world's biggest seller of DSLRs. According to recent CIPA data, DSLR unit volume is down 36.9% and down 44.2% in value. To imply that this huge decline in the DSLR market would have no effect on Canon-- the world's biggest seller of DSLRs-- is quite absurd. I don't see office products, medical devices, or other industrial products dropping by a whopping ~40% because those are actually fairly essential and stable product categories; this is certainly not the case with DSLRs, which have been steadily declining for quite some time.

What is the volume of people that go on safaris as opposed to cruises?

To leonche64's point, what could a cruise offer that would elicit more capability than a smartphone? On the other hand, go to any sports event with school age children and you'll see a mix of both smartphones and digital cameras.

I hate to break it to you, but I ran into someone who is going on a safari and guess what they are taking: their iPhone, and only their iPhone. They figure they get enough good shots of stuff, even if they don't get those long telephoto shots.

And sports events with school age children: again, far more smartphones than dedicated cameras...far more.

Most people don't look at what they are missing, they are aware of what they are getting with their smartphone. And for most people, they are taking far more photos and doing far more than ever before with those photos, thanks to their smartphone. The game is over. The only question is the final score.

@Thoughts R Us Ever thought you might be mixing with the wrong crowd then?

As far as school sporting stuff is concerned, I am one of the few that uses dslr...and the camera phone types always get pics from me in the end. In this environment, it's not even close...if you care about pictures for fast moving stuff at a distance, then DSLR still easily wins. However, that's about it now. I recently just got back from Jamaica where I forced myself to use my S9 only. Great pics. I dont think I'll replace my d7500 unless the idiots running these companies start to put some computers in the DSLRs. The end of "traditional" cameras is very close now.

Fair enough but they are equivalent to those who go Olive Garden for "Italian". Unfortunately for Canon, Nikon, etc. they don't know any better and could care less.

That said, I don't know if there was ever a time when owning a camera and multiple lenses was mainstream.

Profitability is what determines the health of a business, not market share.

Canon just released a new mount and are predicting a loss of 20%. Sony is not releasing any new bodies this year, and are predicting an increase in profit. So it seems that not enough people wanted to buy Canon's new $3,000 lenses and would rather adapt their old Canon lenses to Sony A7X's for the time being.

Exactly what losers think to make their lost less painful..

@thoughts
They pose a threat, but only because they're advancing faster than the common camera. You need to consider escalation, and that phones educate kids in photography. When everyone has an ordinary iPhone for pictures and you have something specialized you stand out. People are making vlogs for youtube on red weapons these days. It's either just a matter of time before camera sales increase, or camera makers aren't up to the job of capitalising on the opportunity

If you could actually look beyond your biases you might see how the world around you is changing. A walk to a local attraction might be quite illuminating.

@Thoughts R Us - "So what's the excuse for all of the other camera companies?"

why does sony "need an excuse"?'

sony predicted a 1% INCREASE in 2019 camera revenue, while canon predicted a 7%(now 20%) LOSS in revenue.

you don't seem to be able to separate companies out from each other.

or more likely, it's a bad case of dslr platform fanaticism ;-)

@MILC man: the fact that you have to cite Sony's predicted anemic 1% revenue growth as something to be proud of only shows the weakness of your arguments.

First, 1% growth is not considered good in the corporate C suite, or on Wall Street.

Second, this is 1% growth from the third place player in the market, so it's obvious they are not replacing the sales from #1 or #2.

Three, Sony is forecasting to sell less cameras in number, but to eek out a revenue gain by selling higher priced units. That's OK, but that will only last so long. They are not Leica.

Four, let's see if their forecast proves accurate. The camera market as a whole seems to be undergoing a more rapid contraction than predicated earlier. It's just that Canon is being the most honest and therefore responsible about it.

That "something" is that the camera market itself is declining rapidly. If you can visit any local camera speciality store and ask the sales people there.

This trend has been obvious and documented for the last decade or so, but it appears to have accelerated as smartphones have gotten amazingly good at photography.

Global warming might be « scary », and nuclear war certainly is. But this is not a scary thing. Enough companies will survive to still sell us fine cameras. This is just something that is happening, of little consequence, in the big picture of things. I read this news as I would if I were reading the weekend’s sports scores.

Thoughts.... everyone has known the camera market is dropping... canon has known this. But in the last 3 months, Canon is dropping it’s profit forecast... do you think there is some revelation in the last three months that made Canon change their tune since January?

Also, it’s not a revenue drop. It’s a profit drop. That’s why I mentioned perhaps the new camera bodies are costing more than they thought...

Could it be that people are migrating to mirrorless from dSLRs and there will be a point in time when mirrorless would also slow down.

agreed, milc will take a beating as well, in the very near future, if it isn't happening already.

sony, panasonic, and nikon are hedging their bets, with high-end ff milc, and that is already showing up in the cipa data, as increased per-capita pricing.

canon wants to play that game as well, with overpriced halo glass that has little practical value for real-world shooters... they need to turn that around.

MILC man: You really want to believe that don’t you? Prior projections were for double digit growth for mirrorless as a share of the total market. If that had indeed panned out, Sony would be projecting much more than a measly 1% growth. Canon and Nikon are shifting to mirrorless because it is the only category that isn’t dropping like a rock. But even there, there are increasingly slim pickings to be had.

« Too many people » ??? « Nowadays » ???

I find that the image quality from smartphones is vastly superior to the image quality from disposable cameras that one could buy in the supermarket, 20 years ago.

It seems rather arrogant that you are ready to say what the right number of people is. There is a number, the number of people, and that is what the number is. They, those people, they live their lives, and they have their priorities and preferences, and it seems odd and amazing that you are ready to say that they are doing something wrong because they don’t have the same priorities and preferences as you do... on the subject of photography.

MILC man: the problem is that the entire camera market overall is in decline, meaning that while mirrorless may be holding up better than DSLRs, it is in no way replacing every one of those DSLR sales.

DSLR's are declining more because they started from a higher point and have more ground to fall. But it isn't like a mirrorless model is replacing 1 for 1 a DSLR. If it were camera makers would rejoice. But mirrorless isn't close to making up the slack for lost DSLR sales. Mirrorless is remaining at a far lower level than DSLRs at their peak.

There's nothing wrong with "good enough." And smartphones are plenty good enough.

"Read the analyses from Harvard and MIT"

link?

Find the links yourself; you know how to google. I'm not your librarian, and I do not need to prove myself to you.

I've read many articles and books through the years on economic disruption and this is an oft cited case study.

This is a case where the reality is not only obvious on the internet but also in real life. Anyone who spends even a minute outside in the world will see that smartphone cameras are dominating photography.

smartphone sales are indeed killing cheap ilc and compact camera sales.

no question about it.

but lost dslr sales are canon's biggest problem, not smartphones, as proven by the sony prediction of 1% increased 2019 camera division revenue.

if the entire industry was getting hurt by smartphone sales, sony would be as well... and so far, they aren't.

"Read the analyses from Harvard and MIT"

link?

@MILC man: wow that 1% gain that Sony forecast surely represents a healthy market...LOL. First, 1% is nothing to brag about. The fact that you have to cite 1% revenue growth as being some great achievement only proves that it's a declining market. Second, that is revenue. In unit sales they predict decline. So that means they are overall selling higher priced models. Good for them. Also, that is a forecast. We will see what reality holds.

But to say Sony isn't feeling the pinch is not at all accurate. They've slowed down the pace of new releases, like everyone else. Why? And they've merged their smartphone and imaging divisions to cut costs; why? Perhaps they see 2 divisions with an uncertain outlook. And keep in mind that while the smartphone business is a great one if you can be a major player, Sony missed out on that and is consigned to a very minor role in the market.

"Read the analyses from Harvard and MIT"

link?

In Japan which is one of the highest per capita owners of dedicated cameras (the highest per capita in Leica ownership) Canon is still the dominant player. Even Olympus outsell Sony. If Sony want to get ahead of Canikon, they will need to crack the high end professional market. They haven’t yet. Sony fits in the amateur prosumer segment. Where canikon will have the advantage is in the high end professional segment. Canikons first offerings in Ff mirrorless were an entry into the market and a chance for them to build a lens roadmap for their pro 1D/D5 equivalents. Where the advantage lies is that there are a large number of pros that have likely purchased their last pro DSLR. Many will realise that their next 1D/D5 replacement could be a mirrorless offering. Canikons dominance is owed to the trickle down effect of their professional models. This will continue if they make solid case to their high end pros to switch to mirrorless. If this happens in a meaningful way. Sony are in trouble.

cipa data proves that the Japanese market has relatively insignificant worldwide market share, and there aren't any reliable data sources for what brands get sold there.

japan simply isn't a basis for making any claims about who sells what on the world market.

Fuji has very small market share.

when Fuji first released their two manual focus mk zooms, the x-mount market was so dismal that Fuji had to release the lenses in e-mount... it took Fuji what, nearly another year to put a manual x-mount fitting on their own lenses?

and how long did it take Fuji to finally come up with a real x-mount macro lens... Fuji is heavily conflicted by medium format demand and development.

We will see, but keep in mind that Canon is a publicly traded company and can be held liable for their public statements like this. Even executives could be charged and go to jail if found to be misleading investors.

So unless either of you is a seasoned accountant with experience in large corporation analysis, you may want to be a bit more reserved in your bold assertions.

"So unless either of you is a seasoned accountant with experience in large corporation analysis, you may want to be a bit more reserved in your bold assertions."

as opposed to a fake account claiming that: "It's smartphones. Period."

lmao!

and of course you aren't a "seasoned accountant with experience in large corporation analysis" :-)

@Thoughts R Us

you mean like how you just told us to "Read the analyses from Harvard and MIT"

but you completely failed to provide any link that would prove what you said there.

“Now it just don't feel the same...
Gotta blame it on something... (gotta blame it on something)
Gotta blame it on something...
that was fallin' fallin'...
(Blame it on the stars) that did shine at night...
Whatever you do don't put the blame on you...
Blame it on the rain... (yeah yeah)
You can blame it on the rain...”
Canon’s new theme song lol 😂

Really? Is everything about what the DPR tech addicted crowd cares about? No, the truth is simpler than that. The way people view photos has changed. If Canon made a mistake it was NOT that they didn’t develop a 50 megapixel 15 stop DR sensor that could output 4K video at 120 FPS. It was that they didn’t attack the smartphone sensor space harder years ago. Only so could they have leveraged that development to provide the tech to make us happy. Any major R&D anyone invests solely for the ILC market will be wasted money.

Arun is right. While smartphones have been gobbling up the market, virtually no one has been clamoring for another stop of DR, or 4K video without crop at a higher FPS.

The tech and review community has failed in an essential mission to offer context as to what is most important to the market: ease of use, simplicity, design, etc.

In fact if there had been one reviewer over the past decade that had focused like a laser on user experience, they probably would have hit home with more consumers and would be better positioned to explain and predict the market.

"If it was only a Canon thing, only Canon not innovating, etc...then the other camera companies would be doing just fine and indeed the entire camera market would still be growing in a healthy way."

no, you failed to provide any causal link between what any camera companies are doing, or not doing.

your claim is totally illogical, given that sony predicted a 1% gain in 2019 camera revenue... so it's obviously not an industry issue.

dslr camera sales have been crashing for years now, and canon is the most heavily vested company in dslr sales, so that is the casual link, for canon shrinking camera revenue.

@milcman: if Sony is only predicting a 1% growth in camera sales that is a disaster for the market since the prior projected growth rates in mirrorless as a category were in the double digits. Wake up and smell the coffee.

"the prior projected growth rates in mirrorless as a category were in the double digits."

link?

"So please show me where the entire market is doing just fine"

link? where I claimed that "the entire market is doing just fine"?

don't post false information about what people say, it just makes you look even less credible, if that's even possible, lol

@landscaper1... let me guess.... you jump in years ago and start using Canon when they are actually innovating and then you get so emotionally invested that you can only defend your beloved brand and will do so until you've lost the last shred of credibility. Canon has a ton of brand equity but they are spending it at an alarming rate. I am not predicting that they will lose their spot at the top... but I'm more than happy to risk being labeled an "amateur prognosticator" to predict that they will lose that spot at the top if they don't make significant changes in their strategy. But hey, keep predicting that they will stay atop the camera heap and I'm fairly confident you'll be right for a while longer if that makes you feel good. I'll tell you what I'll predict the same... Canon will still be #1 at the end of 2019. I must be a professional prognosticator after all!

@ Clayton ... I've lost count of how many times I've changed systems over the 55 years since I bought my first SLR. So, you've guessed wrong. But don't feel bad; that's the hallmark of most prognosticators, amateur and professional.

Here's my assessment (not a prognostication) of yourself and those like you. You're way too absorbed in the advancing state of photographic technology instead of focusing on how to make the best use of the technology that is already in hand to produce memorable images. If that's what gives you your jollies, so be it. But that is not, IMHO, what real photography is all about.

@landscaper1... I'l tell you what.... if you haven't been using Canon for many years then I'll be happy to apologize. That said, you do have posting history going back to 2004.

Young people never had more money than this days. Capitalism has never been more conscious and concerned about environment.
On the other hand communist countries like China never cared more about capital and exploited people more than today.
Canon’s problems are mostly their own. Lack of innovation and being late to the game.

I do agree that in general cameras could be made easier to use. It is ironic that as the smartphone has taken over because it is so much easier to use, that camera vendors in general have raced to find new features that make their equipment even more complicated to use.

But in reality, even making easier to use cameras would not slow down the advance of smartphone photography. Nothing will be easier than not carrying a dedicated camera and just using your smartphone. And the smartphone has become the essential tool of our time, and is carried everywhere anyway.

It would be like saying, as the automobile took over from the horse and buggy, "if only they made faster horses and buggies with better tires, then they could compete against the car." Of course, nothing was going to keep the automobile from replacing the horse and carriage.

This is what true market disruption looks like and there's nothing any camera manufacturer can do to turn back the clock.

@thoughts R Us.

The people who are using smartphones, will use a new full frame mirrorless with a 50mm lens and see the same image quality as their phone. You have to make them LOVE the camera as an object first to get everyone interested.

@gravis: there is a camera maker that does largely what you describe: Leica. They have a small but lucrative niche.

And it will always be small. And not just because of price. Think of all of the other interests that compete for people's time, attention, money. Most don't want to make the camera their object of affection. For those that do, there is Leica. And keep in mind that one reason why people love the camera that Leica makes is due to its status symbol quality, which is partly due to its price. If somehow Leica sold the exact same cameras at a fraction of the price, people wouldn't value using them the same way.

I agree in principle with what you say about selling people on the experience of using a "real camera." But what would that take? You'd have to have a marketing effort larger in scope than professional sports, Hollywood movies, etc, in order to remold the interests of consumers.

I also want to add to this. In terms of Auto ISO and Auto WB, its not complicated. ISO is so good now that its almost better than our eyes. Just make it, like our eyes...and nothing more. Same with WB. If I am inside under incandescent lighting, make it look like that. If I am inside under fluorescent lighting, make it look like that. I dont need to compensate for these things. I am in these lighting environments and shooting things I see.

Fix the WB in post if you must.

I feel that most cameras Auto WB tries to correct for the lighting. Just make it look like it is, I never understood this.

Most likely, your quote is an example of something lost in translation because Canon isn't even in the smartphone sensor business yet:

https://www.thephoblographer.com/2018/05/22/can-canon-really-threaten-sony-in-the-camera-sensor-industry/

My above post is about "Canon's chipmaking equipment", not Canon cameras.

Sony's former Imaging division includes Digital Imaging Group, Professional Services and Solutions Group, Professional Products Group, Medical Business Group, and FeliCa Business Division, so the profitability of Sony cameras is unknown to outsiders.

MILCman: a different way of saying what you just said would be that even the segments of ILC that were growing (mirrorless) are now leveling off. Canon’s profit drop comes because ILC sales as a whole have dropped off and they hold a big chunk of the total market. If Sony’s sales in mirrorless are only going up by a small amount that would tell you that even that segment has stagnated. What was Sony’s year over year growth prior to this year in mirrorless? If you look at that segment alone, you’ll see that even Canon’s sales would have increased.

What an ignorant comment - “disastrous adoption of M4/3”. You know nothing about Oly m43, nor have ever owned such a camera. Mindless.

you don't need to own an m4/3 camera, in order to read the Olympus fiscal reports.

when did Olympus camera division have the last profitable quarter?

@photomedium

I really miss those red lights.

But I don't miss colour printing, processing, slide mounting or even sleeving negs.

Kids today don't know they're born. :)

I used a yellow light! The money was always in consumables, Kodak only made/supplied cameras as a way to get people to take more photos as more photos = more film, print paper and chemistry, all of which Kodak made and sold. And don't forget the silver used in film, Kodak owned their own silver mines, so as silver prices went up, Kodak increased the price of film all the while making more money on both. I used a yellow light.

@mandm
The cost savings of digital are simply staggering. Printing is still not cheap but we had to print or project everything in the film era just to see it.

Nowadays it's better for the environment and the user. It really is progress.

@RubberDials; I agree completely that chemicals were bad and for decades went right down the drain. Now there is the problem of what to do with used computer stuff with heavy metals and other bad stuff for the environment and this includes all the digital cameras from manufacturing to junked.

Yes that's true but at least a computer is a general use device and we can't be blamed entirely. It's not a topic that we can get into here because it involves the dreaded word 'capitalism', but clearly computers could stay in use for much longer than they do if software development companies were required to develop software on a more ethical basis - maybe cameras too...

I looked at your gear list an see you've owned a variety of film gear like me.

I came straight to digital from medium format Rollei and before that owned just about every 35mm brand. I went from Canon to Minolta in 1995, but owned and used an OM1 (original) ME Super and K1000, In terms of Nikon I used a college FM and FE for a year and owned a Nikonos IVa. I even shot an MPP for a time so must've been similar to your Grafphlex.

Are you planning to go to mirrorless or are you going to tough it out for a bit longer? Would you go with Z?

I started taking photos in High school with my Kowa Set in 1968, that camera advanced failed 3 times in 15 months, I had made enough money selling prints to jocks and cheerleaders to buy a new Nikon F with Photomic Ftn Finder, 50mm 2.0 and 135mm 2.8 in December of 69. B&W darkroom in my parents home.
Worked at a camera dealer in sales then as buyer. Hired by the 1st of 3 camera companies in 1980 in sales/marketing/product planning & development until I retired in 2008ish, I don't miss the trips to Asia. Thanks for a few of your purchase.
I'm happy with my Df, the 17-35 Nikkor is my main lens, the D750 is for when I want to have a 2nd body with me. I've tried the Z-6 and Z-7, nice, but I don't see a reason to switch at this time, the Df is small and light. I still shoot the 4x5 Graflex with B&W film and develop them at home to scan. I haven't shot my Yashica 2 1/4 in a few years, but still do a roll of color film in my Nikon F every year, always liked that camera and now the Df.

That's convincing up to the point that sensors don't just go into ILC's . There are, I am sure, crossovers between the R&D in stills and motion sensor development.
Perhaps what we are looking at is best indicated by the stills facility on Panasonic motion cams. As we move from paper imaging and can grab what we want from 8 or 12k , the stills camera can go on a shelf besides my Mamiya RB and SInar.

Ttran88: Can you read? It isn’t about what sensor YOU want. It is about how many people exist who care about it at all. You obviously do and so do I. But there aren’t enough of us. It just doesn’t make enough sense to invest in huge R&D for no return. The better model is to milk your existing investment and either exit or if you believe you can still make a profit, buy from someone who can leverage volume from a larger market - in this case cell phones.

@Arun H
I think there should be an instant ban for anybody who writes; 'can/can't you read'.

Everyone who posts on these forums can read. It's not a question, it's personal abuse.

@ArunH
That comment is pure genious! So few people around here have noticed the laughable products coming out of Canon since 2012...
If Canon Imaging was a US company they would already be out of business or looking for a buyer. All the smart people left Canon 6 years ago and they have slowly sent lots of the manufacturing to early retirement, shut down R&D and played magic tricks with the books to make themselves look good. Now the cat finally broke out of the bag.

@Arun H

The market is there. The market for professional and prosumer cameras is not diminishing, it is growing.

It is only DSLRs that are falling in sales. CRT sales fell through the floor but not because people stopped using computers - they just switched to LCDs.

Rubber,
I am not sure that comparison holds.

@Arun H

"Canon itself will likely do what everyone else is doing and start to buy Sony sensors."

Canon won't do that. There would be too much loss of face, and in any case it would not help them.

They would have to switch to a masked pixel technology and drop Both DPAF and Pixel RAW.

They also would not get the sensor they really need, which is the A9 sensor and is not a Sony Semiconductor sensor, but the IP of of Sony's photo devision. They'd basically end up with the sensor in the Z7 - better than the 5D but worth the loss of face and increased cost? I don't think so.

You're talking about a company that invested the time and resources to develop the $3000, 3.2lb RF 28-70/2L and the $2300, 2.1lb RF 50/1.2L lenses that few people will ever buy. According to Sigma’s CEO Kazuto Yamaki: "Normally it takes about two years to develop one lens, sometimes three."

https://www.digitaltrends.com/photography/sony-sigma-ceo-development/

That's a lot of time and resources (which shows why most manufacturers only release a small handful of lenses each year). Given how much time it takes to develop a lens, and how few people will buy these two lenses, I think that's pretty poor return on their R&D investment.

Meanwhile, the investment in sensor development is something that benefits every camera that the sensor goes into. And of course, the sensor is such an integral part of the camera, especially for MILCs. So the sensor has much great impact and significance to far more people than super-expensive exotic niche lenses like the huge 28-70/2L and 50/1.2L.

@T3: neither of us knows the actual profit margins and sales of Canon RF lenses. But I can assure you that lens investments, where successful, pay off over far longer periods of time. The Canon 135f/2 predates the Rebel as also the 400mm f/5.6l. So for Canon, investments in lenses makes more sense than in sensors.

Innovation in the sensor business only makes sense if the volume is there. If all Sony had was their ILC business and they invested as much as they did in sensors, they would be out of business. It is only their position in smartphones that supports it. They absolutely do deserve credit for making the investment in sensor development for smartphones that they are now able to leverage across the board. In The future, it will be the requirements of smartphones that determine what trickles down to ILCs. I expect Canon itself to either use Sony sensors in the future like everyone else or exit the camera body business entirely.

@Arun H - I don't know where you get your information from, but it's all wrong.

"The Canon 135f/2 predates the Rebel as also the 400mm f/5.6l."

The first Rebel was introduced in 1992:
https://global.canon/en/c-museum/product_search_result.html?t=camera&q=rebel

The 135/2L was introduced 1996:
https://global.canon/en/c-museum/product/ef335.html

The 400/5.6L was introduced in 1993:
https://global.canon/en/c-museum/product/ef317.html

More importantly, these lenses were introduced well after the EF system was launched (1987). You can't sell lenses if you don't sell bodies. It seems like Canon is putting the cart before the horse with the RF system: huge, ultra-expensive lenses, without enough cameras in the market to support them. And we're not talking about film cameras. In the digital age, sensors are an integral part of the camera. Not investing in sensor development just makes their cameras less competitive, resulting in poorer camera sales, resulting in poorer RF lens sales.

@Arun H... it is debatable whether that is a smart move but it's pretty clear where this leaves the loyal Canon customers who have already been getting the short end of the stick for several years now.

Clayton1985,
it's also very debatable if Canon and 'smart' should be used in the same sentence...
They have been on artificial life support unable to reinvent themselves since at least 2012 after the first huge downfall in profit as a result of the death of P&S sector followed by the death of cheap DSLRs. They have been surviving of expedients and by hiding losses from investors.

@Arun H

The people you saw with camera phones were not former 5D owners or former Nikon F3 owners or former Hasselblad users. They are people who've never owned professional equipment.

That market is growing, not diminishing. There are more professional users alive now than at any time in history and their needs are not satisfied by a camera phone.

The market that is declining is the rebel DSLR one - and that is Canon's market and to a smaller extent Nikon's, nobody else's. Sony hasn't had product in that market for ten years.