Waiting for St. Nick

While I was off in August, CIPA produced the shipment numbers for June 2016. Here’s what the first six months of each of the past five years looks like graphed (mirrorless on left, DSLR on right):

bythom cipa june

Even those that have been proclaiming that “mirrorless is healthy” should see that maybe it isn’t. This year has the problem of sensor and other parts being in short supply due to the quake, so the 2016 drops certainly don’t reflect what Japan wanted to ship in the second quarter. Worse still, Canon reported no drop in unit volume during the quarter for ILCs, so those bad CIPA numbers for May/June may be mostly reflecting Nikon, Sony, and the others. 

I’m sure that everyone in Tokyo just wants to write off the first half of the year and start over at Photokina in September. Hopefully being able to launch and produce some models that will give them some substantive bounce for the second half of the year and make things look less bleak. 

Some analysts have predicted that the “bottom” for ILCs is likely in the 6m units a year range. That’s about half the run rate we’re at for the first six months of this year. So if those analysts are right, all that hurt we’re seeing in Japan right now is going to just continue to get worse, even with any Christmas 2016 bounce. The yen/dollar and yen/Euro relationship isn’t helping things, either. Suddenly in all the forward-looking estimates from the Japanese vendors I’m seeing yen/dollar guesses as low as 103, meaning that all that help that the camera companies got from the dollar appreciation pretty much will have dissipated. 

So let’s all hope that Photokina presents us with lots of new interesting and desirable products, and that the world economy doesn’t get tipped into a new period of decline by Brexit, the US election, a new world crisis, or some other big event. The camera companies had a very lean start to the year. They all need a couple of good quarters to take the cashflow and ROI pressures off a bit, or else the death spiral won’t level out as we need it to, it’ll get steeper. 

Every time I use the words “death spiral” I hesitate. Technically, I’m making an analogy to a plane out of flight control that’ll crash into the ground. As we’ve seen from previous Japanese CES cycles where products go completely out of the mass market, you still end up with plenty of companies that are willing to just live with being far smaller, though not very high off the ground. 

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