Nikon yesterday announced changes to their management team, both at the board level and in the top levels of the company, as well. Former Imaging President Makoto Kimura (famous for his designing the F3 and later launching Nikon's digital camera business in 1994) has moved to President, replacing Michio Kariya (who was known for his involvement in creating ED lenses, which were critical to both the stepper and camera businesses). Former NikonUSA President, Yasuyuki Okamoto replaces Kimura-san as the new head of the Imaging Division.
In his first press conference as President, Kimura-san talked about the challenges to find growth in the camera business in the next 10 years, a theme that long-time byThom site readers will be familiar with by now. The changes in directors and officers take place on June 29.
(Commentary) It seems that some people are not sure what to make of Kimura-san's statements and even challenge some of the underlying assumptions. Let's break out a few important concepts in what he said to make sure everyone understands it:
- Saturation. How many DSLR users are there per household, on average? While an American house may have multiple TVs, radios, cars, and phones, it has far less than one DSLR, on average. Even more interesting is that it appears the number did not change from film SLRs to DSLRs: both peaked at about the same value. Thus, the DSLR market is said to be saturated.
- Upgrades. A common response I've seen is that Nikon should just do more compelling upgrades more often. Nope. Doesn't quite work that way. If the market is saturated, that means that upgrades are your primary sales. The maximum number of Nikon DSLR households worldwide is less than 10 million. Even if you had compelling upgrades every two years and everyone upgraded (not even remotely likely given how competent current DSLRs are), your maximum unit volume is going to be 5m units. Nikon is already at 3.5m units, and much of that is already upgraders. No, the expectation is that the same thing will now happen with conventional DSLRs as happened with film SLRs: a slowly declining market.
- Growth. Kimura-san didn't say "no growth," he said that it will be tougher to achieve the kind of growth Nikon had in Imaging in the last ten years. That's because every one of Nikon's products are in saturated markets: steppers, DSLRs, digicams. As I pointed out in my presentation to Nikon, there are only two logical ways out of the product saturation problem: new product categories and redefining product categories and forcing the game to start from anew. My Camera Redefined is an attempt to restart the DSLR market from scratch. Video cameras would be a new market for Nikon.
- Openness. Some are surprised at Kimura-san's openness in admitting that he's inherited a company that is in stress. I'm not. One thing I've long admired about Nikon is that, at least from the financial standpoint, Nikon is transparent and open. They're the only camera company that breaks out product volumes in their regulatory statements. The don't tend to sugarcoat things at their quarterly results announcements. For as long as I can remember, Nikon has been open and candid about their financial position and future prospects. Note that other companies are running around saying "we're going to get 20% of the market" with little to support that other than enthusiasm and a slight bit of momentum. Nikon, on the other hand, tends to just say it like it is. Thing is, time and again the Nikon executives' viewpoints and statements have turned out to be correct where the grandiose statements made by other companies have turned out to be mostly dreams.