Nikon cuts annual forecasts by 68% on lower demand

Just when I thought that Nikon is not impacted by the current economical situation... they reduced their annual forecast by 68% today (source). At the same time Bloomberg's commentary is that Nikon may benefit from the US Stimulus Plan. They will benefit if they get some good lenses out. General DSLR sales outlook does not look bad according to the latest CIPA report: DSLR expected sales growth for 2009 is 6.8%.

(if I am not mistaken, the last Nikon recall was in 2005)
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  • S

    Yeah, right!

  • Good

    GOOD. They can stop developing crap for a year and focus on what we really want. You know, dips in the market is good to CLEAN UP the market. I am sick of Nikon’s point and shoots and they need to learn to get the prices right on many of their products. Hopefully this will help shuffle management or opinions.

  • Justin C

    Hmmm… maybe raising the prices on products is not going to make them more money.

    • raising prices on products at this point isn’t meant to “make them money” its simply to meet added costs. they know that lowering prices a little bit in a feeble attemtp to lure more customers isn’t going to work, they cant lower prices enough to attract enough buyers to make a difference. while raising prices a little (as they did) wont deter those determined even durring this recession. now, i would be greatly suprised to see alot of “high end, Professional” equiptment releases this year, and that is because i think Nikon (and other prominent companies) will hold off those products for a year, releasing more higher turnaround items with higher mark-ups for a year and biding time till hopefully next year in 2010 we will be in the middle of a full blown recovery and people will be much more likley to be spending higher ammounts of money in these items. but we will have to see what Nikon really thinks….

  • a reader

    I believe some heavy price cutting will have to occur during 2009 Xmas shopping seanson.

    • Obscula

      Let’s hope we do not fall into a macroeconomic deflationary death spiral.

      • with nikon wouldn’t that be a microeconomic death spiral…

        • Willis

          Nice Stark

      • reverse logic

        [i]Let’s hope we do not fall into a global deflationary death spiral.[/i]

        With the diminishing pool of money available for the purchase of Nikon products, raising prices (for whatever reason) will result in a fall of income for Nikon as less is sold. See the sentiment on various photo forums.

        If protectionism comes in, it will accelerate the effect.

  • Zoetmb

    You have be careful which numbers you’re looking at. You have to look at Imaging only. And while the news isn’t great, it’s also not that bad:
    Revenue: New FY projection compared with 2008 down 2.7% in Yen, but up 11% in dollars.
    Earnings (this is bad): Down 58% in Yen, down 52% in dollars.

    Units: New FY Estimate vs. FY 2008 actual
    DSLRs: Up 6.8%
    P&S: Up 17%
    Lenses: Up 3.4%

    Market share for 1st 3 fiscal quarters (April 2008 – Dec 2008)
    compared to CIPA shipments for same period.
    DSLRs: 37.1% (vs. FY08 40.1%)
    P&S: 9.9% (vs. FY08 8.7%)
    Lenses: 32.3% (vs. FY08 34.1%)

    The Future:
    CIPA numbers don’t look good. December shipments were down 13.6% on DSLRs, down 16.1% on P&S cameras and down 18.6% on lenses compared to previous year. Numbers were all substantially positive until December.

    More than 1 million DSLR units were shipped per month in September and October of 2008. I don’t think we’re going to see that in 2009.

  • Zoetmb

    One more note: We and everyone else constantly put down their P&S line, but that line seems to do really well for them. It has the highest growth vs previous year and market share also grew.

  • Pablov

    In fact I like Canon !!

    If I had to build the perfect camera, I would mix Canon with Nikon (no priority on the selection, just pick the best of each one)

    Of course, the “perfect” camera for me might not be the perfect for many others.
    So I guess the “perfect camera” won’t ever exist
    …unless you have a device with totally different technology than electronics, capable of taking photos, record what we call video (frames in sequence making the sense of moving images), sound, 3D or holographic images / movie, feed by sun light (no battery need), water resistant, no optics aberration nor distortions (since it might have not glasses at all), enormous “zoom” level, some kind of extensible (not size fixed) and touch sensitive display, etc….

    Although some of those characteristics might feel not perfect for some people either

  • William

    B&H raised the price on the D300 a couple hundred bucks. Dont know about the other bodies.

    • Gary L


      B&H did the same not long ago, only to drop it back +$10 more than before. Abe’s just goosed theirs by $200ish.

      This is weird ….as I type, Amazon itself has a BLANK space for price, and so did Crutchfield, + one more.

      Hmmm…… Something is about to be announced ….. me thinks. I hope it is something good (for us that is).

  • Gary L

    The recent price hikes used the USD/JPY relationship as an excuse for the price hikes. The fact is, the JPY is artificially strong due to the ongoing deleveraging of the financial markets, and specifically the unwinding of the “carry trade” – “carry trade” was the borrowing of JPY at their very low rates of say 1%-1.5%, then selling the yen and buying of USD or EUROS (which in effect drove down the yen and goosed the USD or EURO vs YEN), then the borrowed funds would be leveraged 30-40 to 1, with the funds being invested in a plethora of markets which WERE going up. The deleveraging process, is producing just the reverse: selling is causing most markets to fall, USD & EUROS are being sold and JPY are being bought, so to repay the loans – at least for those still in the game and able to repay. The deleveraging process is nearing the end. Furthermore, BoJ – Bank of Japan, is a notorious currency manipulator, artificially driving & keeping the YEN low vs. others, so to help their industrial/manufacturing base – not ALL governments are full of idiots like ours, and many if not most DO aid their industrial/manufacturing base which is the base and blood line of any viable power house nation.

    The recent price hikes were either the product of the usual inflexible (but slowly improving) japanese mindset, OR, knowing full well that some hefty discounts are in the offing, they hiked the MSRP, so to discount based on those prices, instead of the old, in effect keeping the prices the same, or at least lowering the losses. After all, if indeed the boat tilts toward Canon’s side, Nikon can always lower prices.

    Like many others, I was not thrilled by Nikon’s move, and while I was waiting for D300 further price drops, as the economy is further slowing, to possible depression levels – see today’s business headlines – I got disgusted and went for a 40D at a sweet price, choosing to simply wait for the D300 price to come to me. If it does not happen, I’ll then sell my Nikon glass, all bought right, and probably will be getting my money back, which will then go into Canon glass.

    I hope the above rambling to be of some use/interest to some 8?).


  • ronin

    So despite the previous claims, Nikon is doing poorly. In this environment, price increases where you don’t have a monopoly do not increase sales, they decrease them.

    Nikon is trying desperately to maintain margin, since risking reduced sales appears more like a short term tactic to boost short term numbers at best, or sheer blind stubbornness at worst. When sales further collapse, Nikon is going to be looking over the abyss. It will have to drop prices to compete, or risk going away.

    Personally I’d like them to stick around because of great products. But given what I can only call arrogance over the last 30 years (questionable product and support strategies), I wonder if they can get over themselves enough to see the reality: That discretionary consumer electronic sales (incl digital cameras) from Japan are in the toilet. Sony, Panasonic, etc are taking hits. Who will have the depth and savvy to survive this one?

    • Gary L

      A digital camera is nothing more than a mini computer built specifically to execute PhotoShop like commands, which makes any and all cameras nothing more than mini computers and as such a commodity. Glass aside, there are many companies that can (and are) produce competing products to any DSLR on the market today. Sigma, is already going that direction, and I question how long before Kenco/Hoya/Tokina, as the largest glass maker, will follow Sigma.

      I bet that within 5-10 years, Nikon will be a division of a larger company – the wild card being the Japanese government, and their willingness to allow a crown jewel to be removed, especially in an industry in which they remain kins. Unlike dopes like us, the bulk of the camera components are still made in Japan. I looked at everything in the 40D box, and the only item made in China was the battery charger. Kudos to them for that.

      Japanese companies are not known for their flexibility, or willingness to change.

      I wonder how long before someone will introduce a DSLR with flexible mounts, whereby one can keep their collection of glass, while using the company’s body. Nvidia has some core technology WELL WELL suited for just this kind of application, whereby once the mounts are changed, the camera/guts can be reprogrammed to fine tune the algorithms so to adjust to whatever glass you throw at it – remember the Hubble telescope being mis-manufactured only to be made perfect with firmware upgrade.

      Bottom line, Nikon is beating the path to making themselves irrelevant, just as Kodak did. It is just a matter of time. They expect customer loyalty, but, like all other uber corporations, they completely fail to reciprocate.

  • Jack

    No company will be unaffected by the global economic crisis. It will affect everyone.

    • Vlad

      One way or the other…

  • Zoetmb

    >>>knowing full well that some hefty discounts are in the offing, they hiked the MSRP, so to discount based on those prices, instead of the old, in effect keeping the prices the same, or at least lowering the losses.

    That’s clearly not what’s happened. Prices at retail (at least for lenses) have risen substantially. As just one small example, the 105 Micro has risen from $734 to $890 at street price. Street prices on bodies have also risen from December: D90 by about $50, D700 by $400, D60 2-lens kit by $100, D60 1-lens kit by $30, D3 by $230, D300 by $235. Only the D80 and D40 are flat or have dropped a bit and there’s been no discounting yet on the D3X, which is a bit surprising.

    Nikon rose MSRP in October, 2005 and street prices barely changed. But not this time. Another factor is that Nikon has started enforcing MAP and if they wanted to, based on a Supreme Court decision of last year, they could also enforce a minimum selling price. (They don’t really need to because dealer margins are so thin.)

    Regardless of the reasons why, the dollar has fallen 34% against the Yen since 2007. Nikon stated before this fiscal year (and before the crash) that it was willing to sacrifice units and market share for higher margin. So I think they’re perfectly willing to sell fewer cameras and try to get some margin back. But that becomes self-defeating if your costs rise because you’re making fewer cameras or your sales drop to nothing because a price rise is the last thing U.S. consumers want to see. If you’re not selling, the margin isn’t going to help you.

    There’s another big problem: with all the borrowing the U.S. is going to do to support the stimulus, the Dollar is probably going to drop even further against the Yen. This is not only going to hurt Nikon, but photo dealers as well, who according to Hogan, are really getting squeezed. That portends more price increases, which will result in still fewer future sales, etc. It’s going to be hard to break out of this cycle.

    The only upside to these price increases from Japanese manufacturers is that it offsets the fear of deflation.

    • Gary L

      For now, the prices have been hiked, to be sure. W/o looking at any stats, I can see buying has dropped drastically in the stuff I am watching – mostly electronics, cameras being just a recent addition as I was interested in updating the body only, since glass-wise I am set.

      The question now becomes, how is Nikon going to deal with ever falling unit demand, coupled w/ “flation” – the big unknown being the prefix of “flation”!!!




      Right now, we are in a deflationary mode. Most governments are in nearly the same boat we are in. Yeah, Russia and China HAD a nice reserve, BUT now even China is borrowing, while Russia had a huge burn rate as well as it being a one trick pony (raw materials) but a horrible trust issue given their political shenanigans, this time will have a hell of a time attracting foreign capital. In any event, to one degree or another, given the absence of massive cashola balances to meet the borrowing requirements, all will have to print, which is inflationary, therefore the tide will lift all boats, and the determining factor, I believe, will be the amount of political unrest to accompany the misery, that is in addition to the response to whatever economic stimulus pks, the respective governments will implement. IF, that is the case, we’ve already seen a flight to safety of the $. My quote systems are slumbering right now, but off the top of my nuggen, the YEN and the $ have been in a nose to nose race.

      IF, all economic pks will indeed have the desired effect, I fear one hell of hyper inflation.

      Russia and China, most likely will experience some unrest, it is already happening, and we are just getting going. France and the Brits are also feeling public pressure.

      Anyways, this is a photo blog, so to cut to the chase, Nikon will have to reevaluate its options since all of its competitors are larger gorillas, with a broader product base and revenue streams, thus it has to be very careful how they play their hand, for just a handful of people MUST buy their products right now, and even the pros, will delay purchases as their business is vanishing, fast. Our older bodies, unless abused, can still take the same great shots. Also, many are having to sell their gear, to meet much more important obligations, so, plenty equipment is awaiting a buyer, and it is only a matter of time before Nikon will have to get flexible, or it will snap.

      I don’t believe they felt the full impact of the slowing economy just yet as they had the holiday buying, immediately followed by the buying of higher prices, and most likely a little will come on the heels of the show, and new products.

      But then???

      But then???

      PS – anyone suffering of insomnia, and fresh out of pills, can just read my post and should quickly be out like a light ….. 8?)

    • Gary L

      One more very interesting bit of inside info re. the big Brooklyn stores.

      We all know, the dealers operate on very thin margins. I was told by someone who is 2nd generation (!!!!) in the business, that B&H and alike, make their profits NOT from sales of the gear, but from using the cash-flow to be in the diamond business!!! Furthermore, I just learned that right now, the higher end of the diamond business is on fire, with rocks of $500k+ being hard to find. The deep pockets are stashing their “disposable cash” in precious stones, over gold which makes so much sense.


  • Zoetmb

    >>>I was told by someone who is 2nd generation (!!!!) in the business, that B&H and alike, make their profits NOT from sales of the gear, but from using the cash-flow to be in the diamond business!!!

    I’m not sure I believe that. While it’s true dealers used to play the float (collect from purchases, delay paying the distributors/manufacturers, earn on the investment or interest), they can’t really do that today because the costs to borrow to acquire inventory are higher than what they’d earn. Let’s forget about borrowing cost: Let’s say you buy $ 1 million worth of inventory and sell it all on one day. Now you have $ 1million. You don’t pay the suppliers for three months and let’s argue you don’t have to pay any penalty or interest on the delayed payment (unlikely). So you put it in the bank and earn maybe 3%. So you’ve made $7500. Let’s say the average sale is $500. That $ 1 million was 2000 sales. You’ve made less than $4 per sale. Now let’s say you made 5% on the sale itself. That’s another $25. So now you’ve made $29 per sale. That’s probably not enough to survive.

    • Gary L

      The diamond info came circa 2005.

      I have no reason to doubt the info. On the other hand I cannot confirm it first hand. However, the bigger picture, and all things considered, it makes every bit of sense.

      Furthermore, most likely they are getting 90-120 days terms. If you were to take just the top 10 Manufacturers: Canon, Nikon, Panasonic, JVC, Samsung, etc, who in turn had very low borrowing costs at home, virtually nil%, they could very easily afford extending credit at no interest to their top clients.

      B&H must do monthly sales of $10m, or more. You float that 3 months, you are looking at $30m which, if invested in a diamond biz, would be safe to assume a conservative 10% annualized, you are looking at $3m, and I believe I am using conservative and reasonable numbers, although, I know absolutely nothing of the diamond business.

      Per Wikipedia they handle 11-12k customers/day. Say they write 5K orders/day @ $200/pop average, a reasonable estimate considering the ticket prices of their products, that is $1m/day gross.

      To that you add the $ on the float, as well as the little extra from grey market products, and even possibly from currency conversions. Then remember they also have operations in Brazil, that we know of……….

      It would be interesting if that info could be confirmed by insiders.

      Anyways, more power to them, whatever profits they make. They are a great source of good products. The bigger question now is, how are were going to work ourselves out of the trick bag, and what life will be on the other side of the tunnel for certainly things will change, and I fear, we/the US will not get the better end of it, or if we do, it won’t be for long.


      • Should I start B&H
        This is interesting.

        • Gary L

          As I got the story, it is not a B&H exclusive, but rather applicable to the bigger/biggest players in Brooklyn, which means that Adorama and others are playing the float game.

          Also, I have NO clue how wide spread such info is to the insiders.

          Of course, given the rapidly declining current financial and economic landscape, things may have changed, and not for the better. Probably.

          I have not looked at the numbers, but I am curios if anyone has looked at the amount of the bad collectibles written off, and/or the reserve provisions for possible/probable hits from clients the likes of CircusCity (not a typo).

          And now to complete the circle on this topic, if you have access to someone with insight in the biz practices of these players, and is willing to give you a wink and a nod, would be cool. I have absolutely zero reservation about the quality/validity of my info, for it came from an owner of a competitor – a name probably known to most die hearts – while I was trying to negotiate a better deal on a purchase I was about to make back then. Furthermore, the info was not provided in a negative context what so ever, ie bad-mouthing, gossiping or negative comparison. I despise such approaches especially when trying to close a deal, and I would have hung up on the person, were that to have been the case.


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