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News and commentary of interest to Nikon and Nikon F-mount users
Not Many Could Do This
Feb 3 (commentary)--As most of you regular readers know, I'm very hard on Nikon when they do the wrong thing. Today, I'm going to balance that with a different thought.
In less than one year, Nikon has completely replaced its entire DSLR manufacturing capacity while increasing DSLR production.
They hadn't planned to do that. The were forced to, first with the quake in Sendai, then with the floods in Thailand. Both plants have had a floor to ceiling redo. Both plants were closed without warning for at least a month. Both plants got new equipment, and not little things like screwdrivers and shelving, but big things like machines that make complex camera parts or do intricate alignments. It's an impressive accomplishment and should be heralded. How many multi-billion dollar companies do you know that lose their entire production capacity to disaster yet still manage to increase sales and operating profits in that year? Any? Bueller?
Yet, contemplate this: during that same year we've had a constant stream of whining from users: the D4 is late, where's the D700 replacement, where's the D400 replacement, how come there aren't any D5100's on my dealer's shelves, how come my D7000 needs a focus adjustment?
So let's get real for a moment. Nikon accomplished something downright amazing in the past eleven months. We shouldn't be criticizing them at the moment, we should be praising them. They made an incredible response to an overwhelming set of problems they weren't expecting. Their business contingency plans worked.
Now, six months down the road from now if you can't find the Nikon product you want on your dealer's shelves or if quality control slips noticeably, maybe then you can complain. But right now, anyone not 100% impressed by what Nikon accomplished should just stay quiet for awhile.
Fewer DSLRs, More Coolpix
Feb 3 (news and commentary)--Nikon reported their third quarter results today, and they're much as expected. The floods in Thailand completely shut down DSLR production there for over a month, and it didn't resume at all in the original plant until early January. Production won't hit "normal" again until late March.
That explains the drop in DSLR sales from 1.25m to 940m units year-to-year (for the quarter). Overall, though, DSLR unit sales are still up for the full nine-months that have been reported (3.67m compared to last year's 3.15m). Lens sales reflected the same trend (many popular consumer lenses are made in Thailand): 1.63m this year's quarter compared to last year's 1.85m, but for the full nine months 5.56m units compared to last year's 4.8m. Simply put, we're seeing what happens when a key plant is closed for a quarter.
On the other hand, Nikon sold compact cameras like there was no slump in compact camera sales. Nikon sold 6m Coolpix in the quarter compared to 4.9m in the same quarter last year. That's the most Coolpix they've ever sold in a quarter. For the full nine months, we're at 13.87m versus 11.6m, an 18% increase in unit volume.
That said, Nikon's forward projections for the full year (which ends at the end of March for them) is still aggressive. In fact, it's more aggressive than it was before the floods in Thailand: 4.7m DSLRs (same as before), 6.9m lenses (up .2m), and 17m Coolpix (up 1m). Translated into market share: DSLRs 31%, compacts 17%, for an overall camera market share of 19%.
The quake and flood also forced Nikon to up their capital investment by US$920m to replace equipment, but curiously R&D spending just took a big jump, too, hitting 7.7% of sales.
For those worried about prices, Nikon is projecting the yen/dollar ratio at 75 this quarter, and the yen/Euro at 100. As I write this, I'm seeing 76.26 and 100.3391 as the current ratios. As long as those exchange rates hold within 3% or so, I doubt we'll see any further price adjustments. Indeed, it appears from their statements that Nikon will be more aggressive in pricing in the Coolpix and Nikon 1 lineups shortly.
With the big Japanese consumer electronics companies mostly showing losses for the year (e.g. Sony), Nikon is projecting a bigger profit for the year than last, despite the highly down third quarter (-3.7b loss). Nikon actually upped their projected full year profit a bit.
Finally, an update on one key metric we all need to be cognisant of: 63% of Nikon's overall sales this year will come from cameras and lenses. I've been noting that Nikon is "two-thirds" a camera company and the only camera company that's actually mostly a camera company (all the others are massive conglomerates of which cameras are a small fraction of their overall business). So goes the camera business, so goes Nikon.
With the overall unit volume in cameras trending mildly downwards, that means that for Nikon to continue to grow they have to take market share from others. They've been doing just that in compact camera sales. While the fiscal years of Canon and Nikon are off by three months and that makes exact comparisons nearly impossible, Nikon predicts it has 17% of the compact market and Canon just reported 18.7%. That's getting remarkably too close for comfort. Of course the devil is in the details, because both those numbers would reflect what they shipped into subsidiaries, not what was actually sold to consumers. Still, I don't think Canon ever thought Nikon would challenge them in compacts, and now they are. This has to be worrying to Sony, Panasonic, and Fujifilm, as well, as Nikon's gains are coming at the expense of others.
More on More
Feb 1 (commentary)--After getting a few comments on this morning's earlier article, I decided to do a bit of SKU snooping on B&H. Here's what I found in the compact camera range (including the latest announcements, which are already live; I took out the X100 and any B&H "kits"):
- Olympus: 37 compacts
- Canon: 54 compacts
- Fujifilm: 59 compacts (I took out the X100)
- Sony: 60 compacts
- Panasonic: 62 compacts
- Nikon: 71 compacts
Put another way, if you were looking for a compact camera you'd have a choice of 343 camera/color combinations, most of them in the US$200-400 price range. Moreover, you can find fault with any of these cameras. Oh, yeah, that one over there has a faster lens, but this one has GPS, yet that one has more focal range, and yet another one has more (or better [BSI]) pixels... The list goes on and on.
So if you asked a camera salesperson "which one is best" you're going to get a random answer at best, too. More than likely, you'll get sold on the one that's in stock ("The XYZ is the best of the bunch, but we only have it in black").
Someone suggested that all this was just a way to get rid of dealers and push everything through Amazon and a few big boxes. Maybe, but Amazon wants bigger discounts than dealers, so on top of all the other woes the compact camera makers have, they'd be getting pressed for lower product margins, too.
Yet in browsing through all these 300+ cameras I was struck by one thing: almost none of them (it might actually be none) actually do what I would want of an entry level camera. That's: let me put my image where I want it. Not on a card in the camera, but on a Web site, in an email, onto my digital picture frame, over onto my phone or tablet. Instead, they include ridiculous things like an HDMI connector, so that I can trip over expensive cords while I manually thumb through my images on my TV only to discover that the battery goes dead in the middle of showing them off. Are you kidding me? That's part of what constitutes a correct entry level design? (Go ahead, try it with yours. I'll wait for you to find the right cable [there are three possibilities], find an open HDMI In on the back of your TV, and start up your slide show. I might be waiting awhile, though ;~)
It's as if the camera makers either have no imagination about what a user might want, or are afraid to try making something that meets those wants. Maybe both. And then they wonder why compact camera sales are getting pummelled by camera phones.
How about this as a design goal: Design a US$400 product that takes far better pictures than a camera phone, has more flexible user control/options (that are photographically motivated), and offers all the programmability and workflow (communications) capabilities that make getting a picture to where you want it easy? Is it really that hard to do? Or will we get another 300+ iterated compact camera designs before someone stumbles on getting it partially right?
More
Feb 1 (news)--So it looks like we now know how Nikon is going to address the fast collapsing compact camera market: more. More pixels, more focal length, more technology, more DSLR-like looks. The Coolpix P510 is the best example of that: 16mp, 24-1000mm f/3-5.6 lens (yes, you read that right), built-in GPS, and a clear DSLR styling.
That's right, it's that time of year. Nikon's new Coolpix line (Sony, Panasonic, Olympus, and others have been introducing their new compact lines, as well) now includes these new models: P310, P510, S30, S2600*, S3300, S4300, S6300, S9300, L25*, L26, L310*, and L810. *=not US market.
Other than some obvious trends towards "more," much of the rest remains the same amongst the 12 Coolpix just introduced. Indeed, one way of looking at the introductions was what didn't get updated: S100, S1200pj, S8200, AW100, and P7100. Coupled with the new models, the carry-over cameras--some of which are certainly just carry overs until their inventory sells out--now amount to 23 Coolpix cameras here in the US. Yeah, more.
It appears Nikon's strategy is to continue to flood the market with iterated choices and let buyers pick older models on price or newer models on "more." But let's look at the absurdity for a moment: with color variations, a potential Coolpix buyer is facing 79 choices here in the US. What dealer in their right mind is going to stock all those?
Just a Reminder--I remove all articles from this home page, usually once a week (on Monday mornings when I update). Previous week's articles are placed on the Archived 2011 link, below, as well as articles from earlier weeks in the year.
Archived Front Page News and Articles
Sansmirror news and views
Archived 2012 byThom comments and news
Archived 2011 byThom comments and news
Archived 2010 byThom comments and news
Archived 2009 byThom comments and news
Archived 2008 byThom comments and news
Archived
2007 byThom comments and news
Archived pre-2007 byThom comments and news
Nikon announcements summary 2001-2012
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