Nikon's first half financial results

[StewartR]

Interesting commentary from Thom Hogan: http://www.dslrbodies.com/newsviews/nikons-first-half-financial.html

TL, DR: You wouldn't want to be where Nikon is right now.

 

[gad-westy]

Makes for interesting reading. To summarise, it seems they're doing okay(ish) in the imaging side of the business (cameras and lenses) but suffering heavily in semi conductors and medical markets. On the imaging side of things, profit is slightly up but revenue slightly down and falling. Things aren't a disaster on that side yet but signs not good. Overall camera market is not shrinking but they're losing sales to mirrorless competition while their higher end stuff does okay. I have little or no knowledge of the other side of their business but the camera side of things doesn't surprise me in the slightest.

My own feelings are that for the last few years, Nikon have churned out fantastic professional grade cameras and lenses and really only had to compete seriously with Canon in that sector, business as usaul. At the more consumer end of the market, things are far more competitive and Nikon's offerings are looking very formulaic next to some very exciting mirrorless stuff coming from Sony/Fuji/Pansonic/Olympus and Canon seem to be starting to muscle their way into that market at long last too. Nikon seem nowhere at the moment with that market and I would imagine they need to act pretty fast. And to add to the concern, Sony in particular seem to be really starting to set the high end market in their sights and are producing some enticing stuff. Could be a difficult future.

Would be interestng to know how Canon have been fairing. I would assume they're facing a similar set of challenges but are coming from a better market share position to start with.

 

[jonneymendoza]

Mirrorless is the future. Canikon both should have dropped at least APC comparable systems but they afraid of losing DSLR sales

 

[Nostromo]

I would have thought that two of the market leaders in camera (dslr's) design and production would have been developing serious mirrorless systems by now. They're going to get left behind and could end up just being a bit part player. Fuji realised this and are now one of the market leaders in mirrorless. The camera phone generation don't want big bulky cameras, they want small portable systems. These types of photographers photograph street style and everyday things. Admittedly you don't gain much by mirrorless (size wise) if you are into wildlife and sport, just because of the size of the lens, but that is a smaller market than what you could call the consumer market.
Just my thoughts, I could be wrong of course and dslr sale may grow.

 

[jonneymendoza]

Whats dying is actually point and shoot and low end DSLR cameras while semi pro and above gear is where sales are doing decent

 

[Nostromo]

Whats dying is actually point and shoot and low end DSLR cameras while semi pro and above gear is where sales are doing decent

You could well be right, but is there a healthy enough profit margin?
I don't have any figures, but what are the sales of mirrorless? I guess they're not at same scale as comparable dslr's.
At my camera club, I would think it's about a 60/40 split in favour of dslr's. Canon and Nikon need to do some catching up. It seems to me like all of the manufacturers have too many models in the market, it gets mighty confusing (well for my little brain anyway) to sort through them when trying to weigh up pros and cons of each model.

 

[Mr Badger]

Not reacting to market trends and innovation can be a serious mistake, look at the Ensign camera company in England, at one time it was one of the biggest producers of cameras going. After the 2nd World War they concentrated on high-quality 120 roll film folding cameras, with their aim apparently being to make a better quality version of that type of 'prosumer' camera than the Germans, which I think they probably did.

However, 35mm film was becoming popular due to its size and convenience, but as far as I'm aware Ensign never designed and sold a 35mm camera and, as 'world beating' as their folding 120 roll film cameras may have been, by the end of the 1950s Ensign cameras had gone out of business. On the other hand, invest most of your development budget in a fad that doesn't catch on and you're probably done for too... who'd be a manufacturer?

 

[Orangecroc]

I've got this odd feeling that Nikon have a mirrorless system using Nikon F in development that is going to blow things wide open. They're the sort of company that will wait to release until they have something "better" than the rest after the disappointment they suffered with the Nikon 1 series.

 

[bcjames]

I've got this odd feeling that Nikon have a mirrorless system using Nikon F in development that is going to blow things wide open. They're the sort of company that will wait to release until they have something "better" than the rest after the disappointment they suffered with the Nikon 1 series.

They need to get on with it before I'm further tempted over to mirrorless for the bulk of my commission work!

 

[Ste_S]

Mirrorless is the future. Canikon both should have dropped at least APC comparable systems but they afraid of losing DSLR sales

Why do you think so ? Size ? If anything, mirrorless cameras are getting fatter. Mirrorless isn't as big a revolution as some people are making it out to be, it's just another choice when buying an interchangeable lens camera

The future is in software, something pretty much all of the camera manufacturers are terrible at.

 

[jonneymendoza]

Why do you think so ? Size ? If anything, mirrorless cameras are getting fatter. Mirrorless isn't as big a revolution as some people are making it out to be, it's just another choice when buying an interchangeable lens camera

The future is in software, something pretty much all of the camera manufacturers are terrible at.

No not size. Less moving parts and integrated chips inside the sensor tech (A9) more possibilities for advancements.

 

[HoppyUK]

I don't think the future is just about mirrorless vs DSLRs. That's pretty much a given, it will be predominantly mirrorless - why would you want a camera with a flipping great mirror and costly mechanical shutter if you can produce a better camera, and cheaper, without them? The technology exists, it's just around the corner - a solid state camera with no moving parts Most buyers don't see mirrorless vs DSLR as we do, it's just a slightly different box that does the same thing.

But the big picture question is more difficult. Smartphones have taken over the mass market, and ILCs (interchangeable lens cameras) currently prevail at the enthusiast and professional end. I'm sure that will continue to be true, but what happens to the huge gap inbetween, where the major camera manufacturers make their money? How will it evolve, how big will it be, and crucially, what products will it need and when will it need them?

Alongside the revolution in cameras is the way we now use images - on-line and on-screen, uploaded to social media. Cameras must be 'connected'. No more prints.

Nikon made a mistake with the mirrorless Nikon-1 series, though it's important to remember that at the time it was hailed a success and initially sold well, particularly in the important Japanese market. Nikon's president was famously quoted as saying he was gambling the company on it, but in hindsight it was less the wrong product at the wrong time, but rather more that smartphones just swept it aside as they continued their relentless march further upmarket than anyone thought possible. And that is at the heart of the conundrum IMHO - where will smartphones end and enthusiast/professional cameras begin?

I suspect smartphones have a lot of development potential to come, with multiple lenses and sensors working with clever software, and capable of doing most of the things we now do with our ILCs. What will be left? Long lens stuff, wildlife and sport, flash and studio work? Not much else, but Nikon is well placed to exploit whatever is left, even if the market as a whole is out of their control.

But is that such bad news? Great images aren't going out of fashion, and the skills needed to make them are still mostly with the photographer. Much as I love my shiny cameras and lenses (and that drives more equipment sales than most on here will own up to) if there's a better way of doing things, I'll use that

 

[woof woof]

Have to remember that it's not just about stills it's video too and mirrorless surely seems better suited for use as an all in one still shot/video machine and for extracting a still shot from a video.

And on compacts, as I said in another thread... despite the declining sales numbers I've seen more compacts in use in my little circle than probably at any time since the height of film. Just about everyone in my family and little world now has a quality compact or a CSC of some sort but possibly not in daily use. The smartphone cameras see the most use but the cameras tend to come out on special occasions and their use seems to be as much for video as for stills.

 

[Mr Badger]

I think there will always be a market for a small, compact camera with a reasonable zoom range and a good built-in flash for the work sector where people need a pocketable camera for record and survey type photos and where the zoom range and the usually tiny and comparatively ineffective flash on a smartphone isn't up to the job. However, the second-hand market currently seems flooded with the things so that's bound to hit the sale of new ones. Why buy a new 'basic' compact when you can get a perfectly good and more advanced used model for the same money?

 

[sk66]

Mirrorless is the future. Canikon both should have dropped at least APC comparable systems but they afraid of losing DSLR sales

Canon released the M5... it was just too far behind. The Nikon 1 is/was a nice system overall, but it is significantly hindered by the tiny sensor.

I've said this for a long time, the consumers of photography don't really care that much about "quality" in general. And it's always been true that what an image conveys is much more important than any technical consideration; cell phones will continue to eat into the market significantly and more deeply. It's exactly why many pro's are moving to smaller formats and there are no LF digital cameras... small is good enough and getting better.

I see mirrorless as being the future at the high end, but not until they come up with a true global shutter and that will require a change in technology... Panasonic seems to be close, hopefully the others aren't too far behind. I do think that one of the avoidable mistakes they keep making is incorporating a dedicated lens mount for mirrorless... it's about pointless and it only serves to isolate the cameras/systems and make adoption much more expensive/difficult.

I don't honestly see a "middle market" except maybe as a loss leader to lure new photographers towards the high end... I don't see the "enthusiast market" as being self sustainable into the future. Video will continue to be a nice bonus, so your top level cameras could serve as "enthusiast video cameras" and allow a photographer to fulfill a small niche demand... Professional videography will probably remain separate, and cell phones will fulfill the rest of that demand.

 

[HoppyUK]

Global shutters are already here.

Canon has a sensor with global electronic shutter in one of its video cameras, not sure which one but from memory it's a $3k upgrade option. Canon also has a smaller CMOS sensor with global electronic shutter and high dynamic range in the works https://fstoppers.com/news/canon-working-global-shutter-high-dynamic-range-167872

 

[sk66]

Global shutters are already here.

Canon has a sensor with global electronic shutter in one of its video cameras, not sure which one but from memory it's a $3k upgrade option. Canon also has a smaller CMOS sensor with global electronic shutter and high dynamic range in the works https://fstoppers.com/news/canon-working-global-shutter-high-dynamic-range-167872

That's why I haven't bought the D850... I'm hoping Nikon comes out with a Mirrorless with global shutter and similar specs in the next couple years.

Many video cameras offer a global shutter w/ reduced dynamic range in that mode... that's part of the issue with the current CMOS architecture in regards to global shutters. But I'm pretty sure they'll figure it out for a FF sensor before too long...

 

[Eloise]

Not sure if people have already seen this, but the following is interesting and may imply links with Nikon...

During their recent Q3 financial results conference call a few days ago, the CEO of TowerJazz said this:

In the CMOS image sensor market we are investing today in technology for three main directions; next-generation global shutter technology for the industrial sensor market; Backside Illumination and stack wafers for the high-end photography market; and special pixel technology for the automotive market.

In the digital SLR market we engage with one of the leaders in the world in the development of their next-generation sensors. And in parallel on track with our 300 millimeter Backside Illumination stack wafer technology development with outstanding pixel performance.​

Read more: https://nikonrumors.com/2017/11/14/...ould-be-made-by-towerjazz.aspx/#ixzz4z6WmHwx0​

It might be nothing related and not anything to do with Nikon, but if TowerJazz and Nikon link up it would give Nikon access to designs separate from Sony, essentially freeing them the same way as Canon are free to do their own thing more.

 

[sk66]

It might be nothing related and not anything to do with Nikon, but if TowerJazz and Nikon link up it would give Nikon access to designs separate from Sony, essentially freeing them the same way as Canon are free to do their own thing more.

I believe TowerJazz made the BIS in the D850...
But that doesn't sound like a global shutter for a FF Nikon DSLR is in the works... I'd still take a mirrorless D850 if I could have silent (rolling) shutter with EVF.

 

[HoppyUK]

I believe TowerJazz made the BIS in the D850...
But that doesn't sound like a global shutter for a FF Nikon DSLR is in the works... I'd still take a mirrorless D850 if I could have silent (rolling) shutter with EVF.

That's a Sony A9 isn't it

For sure, sensor tech and related software developments are key to the future shape of things to come. Everyone must be working flat out on that.

And for the same reason as Steven is holding off his Nikon D850 purchase, I'm also not so keen to upgrade to a Canon 5D4 as I was six months ago. 2018 could be interesting...

 

[StewartR]

That's why I haven't bought the D850... I'm hoping Nikon comes out with a Mirrorless with global shutter and similar specs in the next couple years.

Won't happen within that timescale. Nikon have thrown everything they can into the D850, specifically to buy themselves some time to work on mirrorless.

 

[sk66]

That's a Sony A9 isn't it

If it was F-mount and had Nikon's AF system.

 

[sk66]

Won't happen within that timescale. Nikon have thrown everything they can into the D850, specifically to buy themselves some time to work on mirrorless.

La La La La La La laaaa....
i can't hear you...

 

[HoppyUK]

Won't happen within that timescale. Nikon have thrown everything they can into the D850, specifically to buy themselves some time to work on mirrorless.

Maybe, maybe not. And maybe we shouldn't be trying to shoot ourselves in the foot by hastening the demise of the DSLR - the type of camera that most folks on here use, and the type that pays Canikon's wages. I think that's one of the things they're worried about, and why they're in no hurry with mirrorless. Sony is one thing, they've got nothing to lose, but the moment the really big players come out with a DSLR-beating mirrorless camera, which they must obviously market as the best thing ever, that may turn out to be the moment when everybody says I'm not buying another DSLR.

Meanwhile, although mirrorless is growing and now claims 36% of ILC unit sales (coming from a base of zero in 2011) that still leaves DSLRs outselling mirrorless by 2 to 1. Some commentary here from Thom Hogan http://www.dslrbodies.com/newsviews/nikons-first-quarter-cipas.html

 

[Ste_S]

But the big picture question is more difficult. Smartphones have taken over the mass market, and ILCs (interchangeable lens cameras) currently prevail at the enthusiast and professional end. I'm sure that will continue to be true, but what happens to the huge gap inbetween, where the major camera manufacturers make their money? How will it evolve, how big will it be, and crucially, what products will it need and when will it need them?

Phones are getting multiple lenses and increasing software trickery, with advancements being driven at a much faster pace than traditional cameras to differentiate this years phone from last years. It's going to be interesting to see how far phone cameras can go.
Traditional camera companies either need to start moving into software now, or consign themselves to a niche market making much smaller numbers of cameras at much higher prices.

In much the same way downloads and now streaming killed the CD, with vinyl outlasting it, I can see phones killing traditional digital cameras, with film cameras outlasting them.

 

[Eloise]

In much the same way downloads and now streaming killed the CD, with vinyl outlasting it, I can see phones killing traditional digital cameras, with film cameras outlasting them.

You really have to consider vinyl in the correct context. While its true the last year (2016) saw sales of vinyl higher than for 25 years, they are still a fraction of a percent of CD sales. And in terms of money: CD and vinyl account for under half of all sales vs streaming.

But perhaps your analogy is apt ... film with be a very small niche in the market place of "real" cameras.

As others have commented else where though ... the same of ILC cameras while dropping drastically from their peak are perhaps more finding their true sales level. Nikon, Canon, et al. were living off a dream situation where "everyone" was buying ILC cameras: not because they needed the functionality but because they didn't have good quality convenient alternatives. With modern smart phones we are at a situation where these give better quality than basic 35mm point and shoot and disc / 110 cameras ever did.

Comparing again to the audio market - you will hear audiophiles bemoan the rise of the mp3/aac download and now streaming and call it the end of good quality audio. But good headphones and modest bluetooth speakers give a superior quality sound compared with the "gettoblasters" and Amstrad systems people had in the past.

As an enthusiast (or professional) we are just a completely different market to 99% of people who just want to take photos. For a while we were benefitting from the rise in sales - but that rise was never sustainable and as soon as miniaturisation and technology kicked in, people who weren't interested in photography just stopped buying cameras.

 

[Eloise]

Won't happen within that timescale. Nikon have thrown everything they can into the D850, specifically to buy themselves some time to work on mirrorless.

I suspect they have been working on mirrorless for a long time ... they just don't yet have a product which matches / exceeds their DSLR products so haven't launched it. I'm sure there are many, many prototypes in Nikon's vaults. The rumours around the D850 was that it would have a hybrid viewfinder so maybe thats something they are working on too just didn't get it suitably working for the D850.

While the Nikon 1 was hampered by the small sensor size; some of the technology they developed was quite advanced and (afaik) would stack up with Sony and Canon mirrorless if they scaled it to APS-C or even FF. The problem (reading between the lines) was that Aptina was purchased by ON Semiconductors who don't appear to have any interest in the larger 1" + sensors. (As far as I can see). The only Nikon 1 launched since the Aptina acquisition was the J5 - which uses a BSI sensor so not linked to Aptina. It maybe that the DL range was cancelled also due to difficulties with sourcing sensors (my speculation).

So Nikon are in a difficult situation amongst the "big three" that both Canon and Sony design (or have closer links to the designer) their own sensors. When Nikon was big and Sony was small Nikon had more influence over Sony Semiconductors, now Sony Imaging is growing that influence is waining.

PS. of course I may be talking complete rubbish!

 

[sk66]

And maybe we shouldn't be trying to shoot ourselves in the foot by hastening the demise of the DSLR

I was thinking about my "wish list." Currently on-sensor PDAF just isn't a match for the dedicated PDAF of the DSLR, and there are some technical reasons for it that are hard to overcome (especially with long FL's). And the only way to have dedicated PDAF with mirrorless is to have a pellicle mirror redirecting some of the light all of the time, which has some obvious negatives.
It seems like the current DSLR may be the king of low light action photography for a long time to come yet...