(news & commentary)
Mayflower Concepts is at it again. At a presentation at PMA in Las Vegas earlier this year, Mayflower Concepts pointed out that there wasn’t a true correlation between smartphone sales and shrinking DSLR sales. Their conclusion: cameras weren’t easy to use and aren’t fun.
I didn’t notice it until recently, as they posted while I was still traveling home from Africa, but Mayflower is again presenting what to some may be a controversial position: that the bottom of the camera market might not have been reached in Europe. Mayflower also points out that the so-called “increase in more expensive cameras” the camera makers keep pointing to isn’t happening in Europe, either. After accounting for currency rate changes, “it becomes clear that the camera makers at best achieve stable average price.”
My analysis is slightly different (Mayflower’s is solely based on Europe this time). What I see is this: the camera makers are slowly stabilizing revenue and profits on declining volume. This is clearly true of compacts, where we have an 8% drop in revenue on a 21% decline in unit volume. This isn’t always due to “selling higher value compacts”, though. In a number of cases it’s due almost directly to FOREX, currency differentials that are being exploited. In DSLRs the decline in revenue and unit volume is almost equal. In mirrorless the revenue increased 10% on a 3% increase in unit volume, but again quite a bit of that appears to be due to FOREX.
Here in the US, the currency differential has produced more profit for the camera companies as long as they could keep their pricing model intact. I think we’re going to see that bust somewhat in the November and December Christmas sales run. Nikon’s lowering of lens prices is just one sign, and on average those are actually a little behind the curve in terms of adjusting to the new yen/dollar relationship, so there’s room for more discounting, if needed.
The CIPA goals for 2015 are actually in sight. They forecast 22m compacts (down from 29.5m) and 13m ILCs (down from almost 14m). Compacts should actually do better than the forecast, while ILCs will also be slightly better than that forecast, but only if the Christmas season sales are strong.
Speaking of Christmas: once again we will have a lot of hung-over inventory from previous generations that’s leading the price parade, though many of those will be listed as refurbished (they’re really mostly dealer/big box take backs of previously unsold inventory). For example, we already have the D3200, with 18-55mm lens and WiFi converter showing up for US$319, a stunningly low price for a highly competent camera. (Just remember that refurbished comes only with a 90-day warranty.)
Personally, I think that cameras are going to be tougher and tougher sells as long as the Japanese camera companies continue their same-old product iteration. Sure, we’re going to see a wave of interesting new product in early 2016, and a lot of it will get some existing customers to upgrade and seemingly keep the market afloat. Certainly the buzz will be high, because there will be a lot of new gear in a very short period of time, and the camera press won’t have anything else interesting to write about.
But we’re still stuck with 8.3 filenames and mediocre WiFi plus great and increasing complexity. How do you attract new users with that? You don’t. You even start to lose some existing users. Increasingly we’ll see the camera makers have to resort to sales and noisy marketing to push these wares on the public. Mayflower was right: cameras aren’t easy to use and aren’t fun. Until that changes, the best case scenario is that the camera companies hit some sort of bottom, which consists mostly of aging masochists who don’t mind 21 buttons, 69 custom settings, laborious manual workflow processes, and more.