The Camera Market Shift

I've written about this before, but it's time once again to put some numbers on things.

In the last five years, you'll see the clear "mirrorless is here" signal.

  • 2017 — DSLR 356b yen, 7.6m units; Mirrorless 221b yen, 4m units
  • 2021 — DSLR 91b yen, 2.3m units; Mirrorless 325b yen, 3.1m units

Note the value shift. Mirrorless value—despite the lower overall volumes—is now about where the DSLR value was five years ago. You can see that more clearly in the average unit price:

  • 2017 — DSLR 47000 yen; Mirrorless 54300 yen
  • 2021 — DSLR 40700 yen; Mirrorless 104,500 yen

Yep, the average selling price of a DSLR has declined ~20% while the average selling price of a mirrorless camera has about doubled. 

Ask yourself this: why would a camera company want to sell a US$500 camera now? It would take incredible volume results for that US$500 camera to make any real difference to the camera maker's bottom line (and that's assuming they could keep the margins intact). 

The new "bottom" is more likely 2x, or US$1000. Yes, we'll continue to see some products under that mark as the makers test whether there's enough price elasticity effect to regenerate volume, but so far that hasn't happened. I expect the lower cost interchangeable lens cameras to "age out in place." That means that they'll still be available, but they won't undergo any significant updating. US$1000 cameras would be the lower mark where you might see feature, performance, or innovation gains now, and realistically, the camera makers really want to do that closer to US$2000. 

I think we've seen the bottom of the value numbers for the camera makers. Somewhere around 1,000,000m yen is now a realistic size for the overall camera market (bottom was 673,000m yen). But the number of units producing that number is less than half what it used to be. So 2x is a good rule of thumb to think about how things have changed in the last five years: 2x the cost and 1/2 the volume. 

For some companies, such as Nikon, they'll be significantly smaller than they were five years ago, though operating with more traditional profit margins (currently running about 14%). Some companies, such as Fujifilm and Sony, will be significantly larger than they were five years ago, though the former is still very shy on profit margin. Canon probably will end up where it has always been ;~). 

True, nothing new to see here. We've been in a ten year period of contraction, though—even through the veil of the pandemic—it's now looking like the market has found a new baseline size. Recessions will have us under the baseline, economic growth periods might generate some growth from the baseline.

I still believe that my forecast from several years ago is within a reasonable margin of error: 6m ILC units is where we'll eventually get (almost all mirrorless), and 4m units is the bottom of what is sustainable. 

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