Bellwether of the Downturn

The Wall Street Journal (for those of you who might not know it, an otherwise fine newspaper* with a loopy and radical philosophical foundation, much like the Christian Science Monitor in that regard), reports that Canon Camera, considered "a bellwether for major Japanese exporters," has lowered its profit outlook and its sales projections for interchangeable-lens cameras. "The uncertain outlook for the year-end shopping season prompted Canon to again trim its outlook for sales of interchangeable-lens cameras to 8 million, or 44% of the global market, from 9 million in the July outlook. It originally foresaw sales of 9.2 million cameras at the beginning of this year."

Canon CFO Toshizo Tanaka feels the downturn is "only a temporary phenomenon."

(You did notice that market share number on the way by, didn't you? Wow.)

Mike
(Thanks to James Erlandson)

*And for those of you who might not know what a newspaper is, Craig Ferguson says it's "like a big papery blog filled with yesterday's news."

Original contents copyright 2013 by Michael C. Johnston and/or the bylined author. All Rights Reserved. Links in this post may be to our affiliates; sales through affiliate links may benefit this site.

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(To see all the comments, click on the "Comments" link below.)
Featured Comments from:

Robert Roaldi: "I can't get my head around the notion that eight million cameras is not very good."

Ned Bunnell: "I was in my local Costco yesterday helping a neighbor buy a camera. I've always done my informal market research at this location. They just halved the camera display and moved it out of the high traffic location. My guy who manages the category said sales of SLR's are off 50% this year and he reduced the number of slots for compacts by half."

Thom Hogan: "In any given month this year, the U.S. cash register receipts for DSLR cameras have been down from –17% to –23% year-to-year, and the U.S. is the market showing the least drop in terms of unit shipments made from Japan. Interpretation: unsold inventory here.

"Canon's market share assertion still seems off: current CIPA numbers estimated forward show 15.9m interchangeable lens cameras shipping in 2013. Forty-four percent of that is 7m units. For Canon's assertion to be correct, the actual CIPA shipments would need to hit 18.2m units. So far this year (through August), only 10.6m units have been shipped—so Canon's projections indicate that they think that 7.6m units will be shipped in four months. That didn't even happen in the best four months of 2012.

"This is one of the things I don't like about the Japanese business press: they don't challenge assertions, nor do they seem to ask questions that would get to why there's a discrepancy in the numbers.

"The problem for the Japanese remains: they need to sell off increasing inventories in subsidiaries already booked as revenue, while they need to boost units sold to subsidiaries. Not going to happen. At least not easily. For Canon's assertion that this is just a temporary downturn to prove true (at least in the short term of 2013–14) they need to:

• Clear inventories out of subsidiaries
• Increase shipments to subsidiaries
• Sell the increased shipments with no inventory build up

"Otherwise they're just in the same position in 2014 as they are in 2013.

"Yes, Eamon's right, there is a downturn, and Canon is right about that, but the question at hand isn't the downturn but the length of it. 'Only temporary' doesn't put any bounds on the problem. It could be 'only temporary' for five years or for one. The length of 'temporary' may be the difference between the industry surviving as we known it or not."

Comments

[Mike]

You've got to wonder how much of this has to do with global markets and how much of it has to do with other companies perhaps doing a better job of meeting consumer demand.

[Hugh Smith]

My experience with Canon goes back to the halcyon days of SLR's. I owned the Fx, FTB, F1 and right into the 20d digital, 5d etc. Canon had finally left it's old nemesis Nikon in the sensor dust and OWNED the market.
As a street shooter, I wrote to Canon several years ago asking them to turn out a camera based on their old Canonet Ql 1.7...No response.
They still haven't done anything and they (in my opinion) have been left in the mirrorless dust. Like IBM and Xerox, they have grown fat and lost their edge and hunger.
I am saddened, but I DO believe they will never return to become what they could have been...innovators.
I still love my Canon's but my love affair is growing weak.

[John Krill]

Temporary? Does he live in a cave. Canon, I think, has only one non-reflex or evf camera.

I see big trouble for both Nikon and Canon if they don't get their act together.

Just sayin'.

[Kenneth Tanaka]

Since Canon has basically been out to lunch (in their camera development) for over two years it's no surprise that they would forecast a "temporary downturn". Duh.

(BTW, I've no direct relation to Toshizo.)

[Chris Lucianu]

Downturn, or just the wind of opportunity changing course?

Life can be so simple, some days. One can relax and wait for the ever-relevant Thom Hogan to post one of his incisive comments.

It's not difficult for me to imagine a camera that's a combination of hardware, software, and content, and which connects in to one of the growing worlds we're seeing emerge (iOS/OS-X, Android, Windows8ormore). But it seems like it must be for the camera makers. Cameras aren't about prints you hang in frames any more. That's just one of the many things that a modern camera should be able to do, not the main thing. [……]

Given that they've got Final Cut Pro, Aperture, iPhoto, iCloud Photo Sharing, a smartphone camera design group, how long will it be before Apple decides to disrupt the camera market, too? The one good thing going for the camera makers is that they only sold 60m units or so this year, so they look like a much smaller target to a company like Apple than some other targets. But I'll bet there's someone in Cupertino—the town where I grew up—that's sniffing around and thinking "might this be another 100m unit market if we disrupt it right?"

44% of a global market looks intimidating. 44% of a receding market on the verge of being bypassed by technology, somewhat less so.

[Steve Snyder]

I don't think there is any great mystery as to why interchangeable lens camera sales are off. Cell phones keep getting better and better and really most people I know that aren't photographers and bought a DSLR to take pictures of their kid at a soccer game have a good enough camera and don't feel the need to upgrade every year or two.

[Don]

Interesting on a couple of points. Wonder if that is why we are seeing some deep discounts on the 6D and 24-70 II last week on B&H. I have been wondering if I should just sell or reduce my investment in my DSLR gear collection while I can still get good $ on Craigslist. Is the time of the DSLR over?

[Slobodan Blagojevic]

."..a big papery blog filled with yesterday's news.",

Sounds like Canon too ;-)

[Mark Kinsman]

I do hope pride does not prevent Canon from waking up to the fast changing market. As a long time Canon user, I passed on upgrading to yet another overpriced, feature crippled new release. My 5dmkII still works fine, but my M43 Olympus and Fuji X kits are SO much easier to carry and have reached an impressive level of image quality with features that trump my Canon gear.
and then there's the new Sony......

[Bryce Lee]

44 percent? No bloody way! Canon was Johnny come lately here in Canada with cameras not here in Southern Ontario until the mid-1970's. Nikon, Pentax, Miranda, Minolta and a handful of other German makers had the market tied up.
I started with Pentax however soon found all my friends had Nkon and in those free-wheeling days a number of those same friends were able to borrow all kinds of specialty glass for Nikon and other makes
from their employers Downtown Toronto seemingly had a camera store on every corner (now replaced by Tim Horton's coffee and Starbucks although none sell photographic gear, yet). First was a Nikon F with a 50mm lens for the price of C$75.00. Have had all manner of other gear over the years, including German, Russian and
any number of other foreign brands. No Kodak though although a Speed Graphic was in there as well.

Bottom line the digital camera madness is similar to the numerous automobiles that were manufactured from 1890-1940 (50 years), and how many of those companies and their vehicles are still produced today?

Much like Kodak and film, both Nikon, and Canon as well as Sony, Pentax, OLympus and others shall all die one day from over
population? Too many products, not enough of a "large" market share to survive long-term; oh and the varieites of models, as well. They'll all die. I'll stay with film, for now digital, it's nice but will it last as we've known film?

[phil]

Hogan's quote elicits a huge "duh!" from me. Apple has disrupted cameras, with the help of Facebook and Instagram and a few others. Serious cameras don't need to do those things that a phone does better. I have too many friends looking to step up who ask me to recommend "a DSLR" to think that making old-fashioned products is the cause of a weakness in sales. Serious photographers still want serious cameras, and traditional SLRs are still seen as the serious choice. There are fewer of those people, but they're still buying. The iPhone killed Kodak, not Canon.

(And we know maybe the biggest reason for Canon's current dominance of that market. I walk around with my SLR and people ask, "Oh, you shooting video?")

[Paul Amyes]

I don't think it is entirely true that Canon has ben asleep at the wheel. What has happened is that the success of the 5d ii with the film making community completely surprised them and then they thought that there was a whole untapped market for them. So what has happened is that considerable time and effort has been put into the cine line. The C100 and C300 have been well received as have the new line of lenses. I like many others have started to shoot video pieces but, and it is a very big but, we don't have the money to stump up for the cheapest C100 which is around $16K (told you its a big but). Panasonic whith its GH line and now Blackmagic are pulling the rug from under Canon's feet by providing better products at a lot lower price point and that is key in these fiscally challenged times.

[Jim Henry]

A glimmer of hope for "real" cameras: a friend of mine who is a soccer mom with a Nikon D90 showed her pictures to all the other moms (and dads?) who had many many of their own cell phone shots.
They all want her images (prints, mostly) and have now pretty much given up using their cell phones. The quality difference is obvious to them, and its not just that my friend is paying attention to her imaging.

[Kenneth Tanaka]

@ Hugh Smith (and any Canon corporate onlookers)

My restored Canon QL

Hint.

[struan]

Many a truth lies hidden in etymology.

A "bellwether" is a sheep leading other sheep. Usually a castrated ram.

[Colin Work]

Interesting times - could be that the mirrorless and DSLR markets are just too saturated to make competition worthwhile. If certain rumours are to be believed, perhaps we'll see Canon moving upmarket, with medium format or medium format like products. I think historically and still today, Canon has always been strong at the pro end of the market in both bodies and lenses, and perhaps they see this as the place they need to make their stand. The recent number of L lens upgrades might be an indication of this.

[Eamon Hickey]

Just a quick note for those expressing dissatisfaction (perhaps completely justified) with Canon's product decisions:

This is not specific to Canon -- the market for interchangeable-lens cameras of all types is down about 20% so far this year compared to last year. In unit terms, DSLR cameras are down about 18% and mirrorless CSCs are down about 19%.

Nikon already lowered its ILC forecast for this year. Every other ILC maker is likely doing the same. There really is a downturn, and I don't think we can blame Canon's stupidity for it.

[Eamon Hickey]

Addendum: to be perfectly precise, I guess I should say shipments are down about 20%, which isn't exactly the same thing as the market, per se, but over the time period in question (CIPA has figures for 8 months of this year) is a very good proxy for it.

[Michael Perham]

I think that folks who really use a DSLR will still buy DSLRs. Many, if not most of the folks I know who purchased DSLRs over the last few years use them like a point and shoot camera and now use their smart phones as their main photographic tool. The camera phone has your images available at any time to show folks their kids, their animals or whatever ..or to post on facebook. Few if any of those images have any artistic quality to them and are simply documentary images. Hence the drop in sales of DSLRs. BTW, I have my new Pentax K3 on pre-order and will continue building my battery of lenses.

[Wil Macaulay]

Robert says "I can't get my head around the notion that eight million cameras is not very good." Compare that to the biggest camera seller that sold 9 million units over a weekend. Yes, I'm talking about the latest iPhones...

[Ed]

Well,

Maybe finally consumers have found out they don't need the next instalment of in essence the same to fill their ....book and ....ter accounts or post on ...cker. And even printing for the most of us is limited to A3+ or A2 and that means 16 Mpixel can do the trick quite nicely (for most people, not for the odd 20/20 sighted photoenthousiast).

So I hope this will lead to the realisation that digital camera's have been developed, that the upgrade bonanza is over and that camera manufacturers should start making money with their camera systems (flash, remote controls, lenses, and what not) again and not so much with their camera bodies. That was the way they made most of the money in the 60th, 70th, 80th and 90th when we all bought a camera per decade.

And rest in the camera development gives me room to buy lenses, flashes, remote controls and even motorised panorama mounts (okay since only small companies are developing those at horendous prices I more or less build my own). So Nikon, Canon, Olympus, Panasonic and what not, give us glass......not bodies.

Greets, Ed.