The Baseline

I've been writing about "the squeeze" now for over a decade. The squeeze is about the range from the bottom of the dedicated camera market to the top of the viable consumer-oriented dedicated camera market getting smaller.

At the bottom end, smartphones have been constantly moving upwards in capability, slowly gobbling up the potential for the very low-cost, low-end, dedicated cameras. At the top end, Medium Format really sets costs at a point where you can't make enough volume to sustain a large, healthy camera group. 

Thus, where the range used to be US$200 to US$6000 for dedicated cameras with reasonable selling rates in the first fully digital decade, now we're in a position where the "viable reality" is US$500 to US$4000, and the bottom end of that is suffering greatly and declining rapidly in volume. 

To some degree, the image sensor is dictating things. On the old 8" wafers used to make sensors, the best possible case was going to always say that a full frame sensor would be 4x to 5x the cost of an APS-C sensor. That APS-C sensor was about the largest size you could make without making multiple passes for each layer of the sensor, so full frame sensors took longer on the fab and had more things that go wrong with them. Moreover, the yield goes down with full frame for multiple other reasons, including wasted space on the wafer. For a while, sensor prices were going down. These days, due to low volume, they're going back up.

For a long time most of us analyzing the camera market concluded that you couldn't make a <US$1000 full frame camera viably. A few things have happened since, which makes that potentially possible today, though margins would be very, very tight. The bulk of the dedicated camera sales, even today, are in the US$500-1000 range, so there's some willingness from the camera makers to get to US$999 full frame (witness Canon RP), but it's not a comfortable position.

Then there's another thing that happens to influence things: user expectations increase. 

When automakers first introduced innovations such as air conditioning, those cost extra and weren't on most of the models they built. Over time, more people opted for AC, and over even more time, it became an expectation that an automobile always came with air conditioning. The same was true for air bags (plus safety regulations eventually required them), backup cameras, and other items that started as options. That process is on-going. Consumer Reports, for example, is now advocating that every automobile have the full suite of safety electronics (e.g. blindspot monitoring, adaptive cruise control, etc.). 

Which brings me to this: in any product category that has a history (as opposed to being the first of its kind and establishes a new category) eventually we get a "baseline" of expectations that need to be met in order to have an appealing product. So what's the baseline for dedicated ILC (interchangeable lens cameras) these days? Good question.

Let me put a stake in the ground and suggest that this is the current baseline:

  1. Sensor. Minimum of APS-C. Minimum of 20/24mp. 
  2. Image files: JPEG and 12-bit raw.
  3. Stabilization: IBIS. (Alternative: every lens in the mount stabilized.)
  4. Frame Rate and Buffer:  6 fps. Minimum of 20 shots, especially for JPEG.
  5. Video: 4K 30P, 1080P/60. Time-lapse.
  6. Viewfinder: Optical or 3m dot EVF at 60 Hz.
  7. LCD: 3" 1m+ dot, tiltable or pivoting, touchscreen-enabled.
  8. Focus: Face/Eye/Animal detect with other options. Widest possible area for focus.
  9. Body: Weather-sealed, hand grip of some sort, reasonably full set of accessible/customizable controls.
  10. Other: USB 3.1 and Bluetooth/Wi-Fi connectivity. Hot shoe and/or flash. Remote trigger capability.
  11. Lenses: Full set of lenses available for mount. Full set means: kit zooms (3), superzooms (2), fast zooms (1-2), compact but fast primes (3-5), macros (1+), telephoto options (2+).

I'd also suggest that there are size/weight considerations that come into play with the baseline product, as no one wants it to be large, heavy, and bulky. 

So, my contention is that any product that doesn't meet those baseline minimums isn't a viable entry-level camera any more. Even more important is this: if you want to stand out from the competition, you need to do better than the baseline. Yet even more important: the entry DSLRs that are dying off come very close to meeting this baseline, so that baseline really is moving up and you'd better be prepared for that. 

The Nikon Z50 is a good case in point. It fails at #3 and #11. So it's what I'd call barely a baseline camera. It's a really good camera in actual use, but we're talking about market viability here: it's tough to sell a marginally baseline camera, particularly as the expectations keep rising. The cameras that people already have—all those D3xxx's for instance in Nikon's case—are also incredibly close to the baseline, so what do those customers need a new camera for? Moreover, as the volume of sales gets lower, you need to move the baseline price up (otherwise you're the definition of a contracting business that will ultimately fail if contraction continues indefinitely). 

Which, of course, is why the Z5 is a better baseline for Nikon. It does meet all the requirements I set (and exceeds or extends them in a number of ways). But a Z70 might do the same.

This isn't an idle conjecture on my part. Every camera maker is stressing over where the bottom of their lineup should be and why. What feature set? What performance? How many would we sell? At what margin? Will that product live on or is it a one-shot as the baseline moves up? Does it appeal enough to new-to-market customers? Will it get upgraders who have waited? How does that product lead into our higher-end products? 

The problem is that the camera makers got hooked on volume, and built capacity to fulfill it. (Fujifilm is one possible exception here, as they backed away from the market, then re-entered again later.) Olympus never managed to make their on-going volume targets, and fell ruthlessly below their own minimum viability to carry on. The group that took on Olympus Imaging—now called OM Digital Solutions—has far lower volume targets and doesn't carry the overhead of overbuilt expectations. They're below my baseline bar for #1, which means that they need to raise the baseline elsewhere to compensate. 

The devil is in the details. Just having Wi-Fi connectivity isn't enough. The ease of use and usefulness of that connectivity has to be higher than it is today, as the smartphones slowly gobbling upwards will keep pushing the baseline higher. It's important to note that the baseline isn't just a gaggle of specs: it needs to also represent solutions to user problems. That's why IBIS has gotten added to the baseline; it solves a problem users had. Ditto face/eye/animal detect. 

The tricky part for camera makers is that the baseline will keep moving up. It went from no video to 720P to 1080P to 1080P slow motion to 4K, and it will eventually get to 8K. Will things like pixel shift become new baseline features? Camera makers themselves keep upping the pixel count as a baseline. 

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