(commentary)
Apparently, this is the new Nikon camera product mantra: off target, overloaded, and overpriced.
In terms of off target, Nikon seems to be looking for customers it doesn’t already have. They appear to be counting on the ones they do have to figure out their own best-possible-but-not-quite-right upgrade path in what Nikon does manage to overload the market with. In the process, Nikon is losing long-term loyal customers.
Let’s look at some details of what I mean. First, off target and overpriced:
- Df: missed the D700 upgrade target, missed the well-done retro target, missed the better manual focus camera target. And it’s priced more than the camera it shares most of its parts with.
- A: somehow missed the 24mp DX sensor generation. Priced more than the Ricoh GR. Heck, priced more than the D7000 whose sensor it uses.
- V3: missed the mini-DSLR target in several ways, missed the integrated EVF need, missed the Speedlight compatibility need. Priced more than the previous two generations of failed V models, neither of which sold at their high price.
- D610: not necessary at all if they had just fixed the D600 in the first place. Attempted to reset price point they had fumbled badly.
Meanwhile, here are just a couple of bullets on the overloaded axis (all still available new today):
- J1, J2, J3, V1, V2, V3
- D3100, D3200, D3300
- D5100, D5200, D5300
- D90, D7000, D7100
I’d have to say that Nikon’s decision makers have Jumped the Shark. They don’t really know the customer that made them successful, they don’t know how to keep that customer happy, they don’t know how to create new such customers by solidifying their lineup, and they don’t know how to sell cameras they’ve already made to anyone.
Back in 2004 I postulated that Nikon would probably end up with six, maybe seven DSLR models and that was pushing the limit. As I write this today I can go to a store and buy 18 different Nikon DSLR models new. Yes, 18. True, only 10 of them are actually “current” generation (that’s being generous to the D3x and D300s), but even that number is pushing the limit.
Let me describe the problem, because this is going to someday become a classic Harvard Business School Case Study, I think.
Back in 2004 we didn’t really have smartphones and no one knew what the upper limit of digital cameras might turn out to be. Basically, we had a wide open field from “as cheap as you can make it” to “as good as you can make it." What we got was a range of camera products from Nikon that started at US$200 Coolpix and went up to US$5000 professional DSLRs:
- Coolpix 2200, 3200, 4100, 4200, 5200, 4800, 8400, 8800
- D70, D100, D2h, D2x
Twelve cameras.
Today at the bottom of the digital cameras we have smartphones that have gobbled up the lower end and put a clear bar you can’t really go below with compacts. Worse still, even above that bar you’re not going to sell a lot of compacts. At the top, we have 24mp DX and 36mp FX cameras where, as I noted in a previous article, most people can’t even see everything that those cameras can do clearly. Thus, we have a top bar, too, at least for non-pros with discriminating eyes. Now the sales situation ranges from “somewhere clearly above smartphones” to “the current top models in the market.” The range is narrowed, and it’s not going to grow. It’s only going to get smaller. Into that, Nikon currently has (source: NikonUSA):
- L27, L28, L30, P3500, P3600, P5200, P5300, S6500, S6800, S9400, S9500, S9600, S9700, L620, L820, L830, P530, S01, S02, S31, S32, S800c, AW110, AW120, P330, P340, P520, P600, P7800, A (and the NikonUSA site can’t currently show all 30 simultaneously in my browser, and claims there are 34 ;~)
- Nikon J1, J2, J3, S1, AW1, V1, V2, V3
- D3100, D3200, D5100, D3300, D5200, D5300, D90, D7000, D7100, D300s, D610, D600, Df, D800, D800E, D4, D4s, D3x
Fifty-six cameras. Which have to fit into a smaller market with a clear bar at the bottom and a probable bar at the top. Let’s see what that actually looks like graphically:
Notice the logjam in 2014?
Here’s a challenge: I’ll take anyone at NikonUSA and give them a quiz about specific features and capabilities of their 56 current cameras. I’ll bet that no one at NikonUSA can get 100% of those answers right. How do you think Nikon camera dealers will fare? How do you think the possible customer will fare?
Right.
What we have here is a total failure of product line marketing. Total. I’m not going to mince words this time. The current situation is so botched up that you can buy a DSLR at US$430, US$499, US$599, US$649, US$649, US$799, US$899, and US$999. While that looks like “choice” in one sense, is it? Those two cameras at US$649 are the brand new 24mp D3300 or the slightly older 24mp D5200. Wait a second, doesn’t the D5200 have a swivel LCD and more features? Why would someone that’s making a rational decision pick the brand spanking new, just released D3300 in that situation? They won’t. Yet this is a camera that was just introduced!
Sure, the D5200 inventory will eventually go away (probably after the D5100 inventory disappears ;~). But by then, given Nikon’s current product line management system, we’ll likely have a D3400 and maybe a D5500 to fit into the jam.
In short, someone turned the water spigot onto “full blast” and left it unattended. Is it any surprise that you get a flood?
So here’s the to do list for Nikon:
- Clean out the old inventory of products that have grown like weeds, and fast
- Come up with a clear, focused, and far smaller product line that’s rationalized
- Execute the best possible product at each point in the rationalized product line with the lowest possible price
We could organize that by price point, in which case Nikon probably needs something like this:
- US$300 — likely a Coolpix that clearly outperforms any smartphone yet can communicate with the world and has app-type capabilities; high degree of convenience and automation
- US$400 — like the lower model, but with better lens
- US$500 — a more pro-level Coolpix approach; essentially the lower two cameras combined with a more enthusiast oriented lens, UI, and feature set
- US$600 — entry level interchangeable lens camera, probably mirrorless to keep costs down, almost certainly DX to keep performance up, and almost certainly F-mount
- US$1000 — DX enthusiast camera
- US$1800 — DX pro camera
- US$2000 — FX enthusiast camera
- US$3000 — small body pro camera, likely modular for longevity and ability to tailor to specific uses
- US$5000 — large body pro camera, likely modular for longevity and ability to tailor to specific uses
Can you fit a couple more products into the spaces between products? Probably. But no more than a few (as in two to four).
But note that such a tighter lineup puts huge demands on the designers to get the product “right.” Too many of Nikon’s recent iterations have things that users quickly perceive to be “wrong”, or missing elements that were expected, or compromised performance.
Basically, I’m saying that Nikon needs to replace 56 cameras that are all over the place, overlap one another, and confuse the consumer while not always offering a complete solution, with nine to twelve cameras that are highly focused on photography and can clearly communicate what customer they’re for and why.
We’ve seen this same pattern Nikon is following before (HiFi, TV, personal computers). When growth comes off a consumer electronics category, the temptation of the makers is to just try more offerings with more choices and more (often unneeded) features to try to keep the sales growth going. It doesn’t work.
This was actually one of the problems with the late Scully period at Apple: product proliferation in spades that just flooded the market with irrational choices. It was Steve Jobs’ return to Apple and his insistence on a smaller, tighter, more focused Macintosh lineup that helped put them back on track. Indeed, you can still see that same leaner approach today, which is why the 17” MacBook Pro went away and the three desktop lines are so incredibly different (mini, iMac, Mac Pro: three different problems solved three different ways).
The funny thing is that the camera companies keep trying to bring more of the sales back into their online stores (to keep the margin), but they don’t do the one thing that would make that really happen: configurable cameras. Let me give you an example. What if you could order the D800 online through Nikon but you had a couple of configuration options (16mp, 24mp, 36mp sensor, for example; with or without AA)? Bingo. You just solved the D700 upgrade problem without adding another model.
This isn’t rocket science, but it also takes an entirely different view of the market and customer than the camera companies are using. I call it “solutions instead of boxes.” Right now Nikon makes few solutions in a lot of boxes. It ought to be the other way around.
The problem I have is that the way Nikon is currently headed we’re going to get more product crammed into an even smaller space. Can we hit 100 cameras available simultaneously? No. As with juggling, eventually you try to get one too many balls into the air and everything collapses.
By the way, in some parts of the world, the problem is worse. One reader wrote to tell me that his local subsidiary shows 46 Coolpix models still available. This calls attention to another of Nikon’s silly practices: targeted serialization. When inventory piles up in one subsidiary, they can’t move it to another that might sell it faster. In short, Nikon is broken when it comes to product practices. Very broken. Some astute readers will note that I first identified some of these problems and suggested that they be fixed as many as 14 years ago. Practices that served a purpose for Nikon at one time no longer do, but they continue to be followed.
