If The Ship Were Sinking, Would You Want to be Captain?

(commentary)

The Wall Street Journal today posted an article (warning: behind paywall) titled "The Point-and-Shoot Camera Faces Its Existential Moment."  Glad to see that our top business newspaper is catching up to the reality I've been writing about for awhile now.

What struck me, however, is not any of the text, however, but the IDC numbers for overall camera market share: Canon 23%, Nikon 21%, Sony 15%. These are total camera market numbers, not DSLRs. The percentages are calculated on units, not sales dollars.

For years now Nikon has been on a Coolpix kick. While others have seen their market shares drop (e.g. Sony, Fujifilm, Panasonic), Nikon has been bucking the trend. Where everyone else was showing significant compact camera sales declines last year, Nikon was barely down with Coolpix shipments. As I once described it: with a sharp turn ahead Nikon has the accelerator to the floor as if they don't see the turn or the wall behind it. 

Or maybe it's an iceberg that looms in the night. Wasn't the Titanic in a hurry to get somewhere, too?

Given Canon's recent announcements about lowered compact camera sales, it's actually possible that Nikon might take the number one overall camera market share in 2013 if they continue to successfully buck the trend. With an overall camera market of 80 million or so units this year, Nikon would only need to sell only 20 million cameras to do that. In their last fiscal year (which includes part of this year) they sold 17m Coolpix and almost 7m interchangeable lens cameras, and their (I think questionable) forecast for this fiscal year is 7.1m DSLRs and 14m Coolpix, probably enough to put them above Canon for the first time in…well, I'm not sure, but decades.

But do you really want to be captain of this ship? 

Every Nikon executive I've ever talked to in the past 20 years has said the same thing: our goal is to sell more SLRs (now DSLRs) than Canon. That's not happening. Nikon came close in 2007 (remember the D3 and D300?). But it seems that 45% versus 30% is about the norm for the two companies, with Canon being on the top end. 

Given that all the product margin and profits are in interchangeable lens cameras, why would you want to build so many tough-to-sell compacts? In other words, the Titanic is sinking, but you've put in a request to be made Captain. (I'm tempted to write "whatever floats your boat," but that's a little too punny even for me. Oh, wait, I just did.)

Meanwhile we wait for the D400. O captain, my captain. (Yes, that's a Walt Whitman reference; look it up.)


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