Expect Some Delays

The flooding in Thailand looks like it will cause a bigger disruption of Nikon's DSLR business than the March earthquake did. Mother Nature has been hard on Nikon this year, and they have my heartfelt wishes for the best possible resolution (and hopefully a respite from such events in the future).

As of this morning, friends in Thailand report that the record flooding still hasn't peaked in the business park where the Nikon Thailand plant is located, and local news is apparently reporting that it's unclear how fast the waters will recede or when companies with facilities in the area (Nikon, Sony, Canon, Honda, and more) will be able to get workers in to deal with the damage, let alone resume operations. I'm betting that cleanup, replacing lost equipment, dealing with supply chain issues, and the like will take more than a month to deal with. Some people I know who manage such things say two months is more like it, assuming that there isn't specialized equipment that can't be re-created quickly.

Bloomberg Japan is estimating that a two-month suspension of production at the plant could cut Nikon revenue by 30 billion yen and profits by 5 billion yen. The plant makes D3100, D5100, D7000, and D300s cameras, as well as some consumer lenses. The D7000 was already in tight supply before the flooding shut down the plant on October 6th.

I've been trying to get further information about the situation since it first became clear that there would be a problem, but the situation is ongoing and not a lot of concrete information is available yet. The situation is made more difficult by two things: the upcoming holiday selling season and the fact that NikonUSA was about to put into place some additional incentives on many of the items made at the plant. In other words, we've got a swelling demand for product looming at a time when there probably won't be any new stuff arriving for awhile. I'm pretty sure Nikon is going to have to reset its plans for consumer DSLRs in the pre-Christmas run-up, at least here in the US.

I had also forecast that the D300s follow up was likely to hit some time in early 2012 (my guess would have been February). If true, that date is going to be in doubt now.

Bottom line: if you're in the market for a D7000 between now and the end of the year, you'd probably better get it now. I strongly suspect stocks of D7000 models will dry up first (they were already tight). D3100 and D5100 purchasers probably have some leeway, but the scramble behind the scenes at NikonUSA tells me they're worried about availability of those models in the coming months, too.

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