The economic meltdown in 2008 that affected most of the known universe didn't seem to hurt a handful of companies much. Wal*Mart. McDonalds. And yes, Nikon. While Nikon is almost sure to report lower profits for the last quarter of 2008, it'll still be a reasonable profit on the imaging side and unit volume held up quite well. Here in the US, that was helped by a very aggressive coop marketing campaign with dealers during the holiday season.
The question is: will Nikon's unit volumes hold up in 2009? I think the answer is no. That's because we're on the front edge of what will be price increases. Nikon Australia, for instance, has already preannounced that they'll be raising prices next month, and some of those increases range in the 20-30% realm, which will certainly impact volume.
Here in the US I also expect price increases, too. Nikon's financials are currently based on a hedged relationship of 95 yen to the dollar. The actual values have been ranging from 88 up to 93 for since December 17th. If that continues, the implication is a 6% price increase is in our future. But when the current cameras were designed the yen/dollar relationship was more like 110. Indeed, part of the high D3x price may simply be a re-positioning manuever that gives Nikon more flexibility in an economic world where most currencies have dropped in value against the yen. Basically, if your currency is dropping in value against the yen, you're likely to see price increases in 2009.
The D3, and a lesser degree the D700, have seen price collapses in the US that indicate waning demand. Raising the price on them at this point would certainly lower demand. Fortunately, they're not high volume products, so lower demand there would have little impact on Nikon market share. The D90 and D300 have held price about as you'd expect for the point they're at in their life cycle. As I've always said, Nikon's forte is in the serious amateur and prosumer niche that these cameras serve, one that started way back with the N8008 and has produced solid hits with virtually every camera in the progression (I've updated my Nikon lineage chart, by the way, if you want to see the primary relationships over time of the Nikon bodies.) Still, I wonder how long D300 demand will flourish. It's not an inexpensive product, and with the holidays gone, you have to wonder what the demand for it will be between now and, say, summer vacations.
But it's the low end where Nikon needs the most change to get through 2009 healthily. The D40 is over two years old, and overdue for replacement. The D60 seems underspecified against the competition and not much of a step from the D40. And don't get me started on Coolpix models. Yet, most of Nikon's sales volume, and thus market share, comes from these cameras. Price increases here would be very problematic, especially without new models that meet or exceed expectations.
But never fear, PMA is just around the corner (first week of March). We'll get the usual Coolpix new model onslaught and, I hope, something new in the low-end DSLR game. But if the yen/dollar relationship continues, these things will either need to be increased in price to consumers or de-contented to reduce production cost. Given the economy worldwide, that doesn't bode well for sales in the first half of 2009. I suspect we'll see Nikon contract a bit in the first half of 2009.
And PMA is likely to be a less busy show than usual. Dealers are under pressure, and I'm more worried about their financial health than I have been for some time. I suspect quite a few will cut back on sending staff to Vegas for PMA, and they'll be ordering fewer products for inventory, at least for the short term.
Meanwhile, I've taken "Lens Production Meets Demand" off my Waiting for Nikon list (see left) after 15 months. While there are still some small scale shortages here and there, it appears that the economy has taken just enough demand out of the market that Nikon is producing just about at what the actual demand is. A few exotic lenses that get produced in very low volume (really large telephotos and PC-E lenses, for example) will likely come and go in and out of supply, but that's relatively normal behavior.
But readers of this site probably already have a good camera and a reasonable stash of lenses. From the D90 to the D3x, Nikon's current DSLRs are capable of producing excellent images, so if you're already an owner in that league, I suggest you pay a little less attention to gear this year and a lot more attention to getting everything you can from what you've got. I'd even add you D80, D200 and D2x owners to that list.
To that end, you'll see me try to address that a bit in some of my articles on this site. To get you started, check out what I wrote about my recent experience at Bosque del Apache. While I took my more exotic 200-400mm f/4 lens, I got a lot of excellent images using just my D90 and 70-300mm VR. So put your energy a little less into worrying about whether you've got the "right" or "best" equipment and a little more into making sure you can maximize what you've got. It'll save you a few bucks this year and make you just as happy.
So, welcome to 2009. May your stay here be enjoyable.