The Rumor Mill is Working Overtime

(commentary)

I popped back into civilization earlier this month to find that wild rumors were flying all over the photographic scene. Company A closing down stores. Company B shutting off retail sales in some countries. Company C acquiring company D. Company E acquiring company F. Company G re-evaluating the market. Company H going to shut down certain lines of cameras. 

The list of wild rumors was quite impressive and there was at least one for every company in the camera business. Of course, when there are rumors, my email starts filling with “is it true?” queries. 

Let me say this. A least a couple of the rumors probably have some basis in fact. One thing I learned in my long career is that cash flow trumps all. Run low on cash because accounts receivable are growing or you have a big judgment you have to pay in a lawsuit or whatever, and things get into “save the company” mode. For the public companies, I’ve been watching cash, receivables, and inventory pretty closely. As far as I can tell, no one is in trouble, though quite a few a showing early signs of stress in their camera groups (e.g. inventory build year-to-year with downward sales). 

Nikon certainly has been taking costs out of plenty of places, though I don’t agree with where. Why they are exhibiting at big video and other trade shows and spending seven figures at a time to do so but cutting back on customer support is a decidedly good question to ask them. If you can find someone who’ll answer the phone to answer. ;~)

bythom cipa july

The latest CIPA shipment numbers don’t look all that bad overall. July was the highest in four years for mirrorless, DSLRs rebounded from last July, too. But CIPA shipments aren’t actual sales. When you look at the numbers more closely you find that both monthly and year-to-date Japan and Europe are showing significant slowdowns. It’s US and Asia where the extra shipments are headed. US because the dollar/yen relationship gives some added profit or pricing leverage, Asia because that’s where gray market gets dumped. I think we’re a long way from calling “bottom.” 

The question is “how much can you take off the pig before it dies?” We were okay when the camera makers were reducing the pig’s fat, but some are now cutting into the meat. 

I have no idea if any of the rumors currently circulating are true. I do know that as long as we have this protracted downturn that the landscape is going to look different for camera makers a few years out. 

That said, I’ll introduce a global rumor ;~). Q1 of 2016 is going to be crazy. From my talks with various folk in the camera companies, it seems that everyone is targeting that time period for their “next leap.” Nikon is easy: the D5 kicks off their next round of cameras, and it’s highly likely to be accompanied by one or more other cameras (ala the D3/D300 and D4/D800 launches). 

Of course, whether or not you consider whatever gets announced in Q1 2016 from the various camera makers “a leap” or not is another story. I’d guess just that most of it will just be more incremental iteration. Still, we’re going to see a lot of cameras introduced with fanfare in early 2016. 

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