Nikon’s Q2 financial results are out

Nikon stock is up 2% today

Today Nikon released their financial results for the second quarter of their financial year (ending March 2018). Here are the slides relevant to the Imaging Business (click for larger view):

Next is the updated forecast for their financial year ending on March 31, 2018:

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  • Given my expert opinion I surmise Nikon is strapped.
    Strapped by production resources, strapped by capital, handicapped with vision. At least technological prowess isn’t strapped, except by the ole Jobs vs Wozniak syndrome…

    (Puts on dunce hat, heads to the corner)

    • marymig

      Handicapped with vision?

      • *poor

      • Delmar Mineard Jr

        Marketing has always been their weakness.

        • Bob Thane

          Agreed – I see very good commercials for Canon gear regularly playing in movie theatres and TV, but never Nikon commercials. They need to advertise if they want to be a competitor, most people aren’t going to spend hours reading reviews to find the best gear.

          • %(numUsers)

            Nikon advertises quite heavily over here (Hungary)… but it’s mostly in print media, so probably not very effective.

            (OTOH Canon must not think us a particularly valuable market, as I really haven’t seen them doing even that.)

        • Luca Motz

          I actually believe that marketing is their only weakness right now. Why would Canon still be at the top comfortably otherwise? Let’s face it Canon is by far offering the least advanced cameras of the 3 big companies. Well their customers are confident that Canon gear is the right choice.

          • Nyarlathotep

            Marketing AND Customer Service. And perhaps an answer to the onslaught of mirrorless into their lower end offerings.

            • Thom Hogan

              Marketing and customer service and lack of a clear plan for the future.

        • Thom Hogan

          It’s going to be a bigger weakness, probably, as they’ve cut back on marketing staff and expenses.

        • Aaron Michels

          I had someone mention SONY SLR’s before Nikon in a conversation a few days ago. I said I don’t use Canon, and they assumed I used a SONY, then. I told him that I was shooting the new D850, and got a black stare. This was from my daughter’s photography teacher in high school! Canons are almost all I see in schools. I think they need to hit that market. Get them hooked early! 🙂

          • Doug-e-fresh

            You NAILED It!! Thats exactly it!
            What you learn on determines the path you go down, either the one paved in GOLD (Nikon) or the DARK side ( you know who)

    • Thom Hogan

      If we are to believe their financials, no. They have plenty of cash, have borrowing capacity, etc. They just refuse to use it and prefer to manage to profit margin, despite contraction.

      • Civilitas

        It strikes me that Nikon’s underlying problem is actually shareholder relations. They are in a very competitive industry suffering a secular change in its market, and yet Nikon’s shareholders are insisting on a 40% dividend policy as if this was a utility stock, rather than a technology stock. Unlike a utility, there is no guarantee that this brand survives at this level of investment. If they cannot convince their shareholders that a significant period of investment is required to build out their existing product lines (Dx prime lenses, anyone?), develop new products to address underserved market opportunities (mirrorless? dual OVF/EVF as a unique selling feature? something totally new?), AND do better marketing support, then they will just continue on a path of decline. Unfortunately for them, they are competing with much larger, more diversified companies that can afford a long period of investment before sustained cash returns are required (Fuji? Sony? Even Canon has a broader portfolio). Note that given the stability of their shareholder base, they can’t (or we can’t) hope for activist shareholders to break them out of their downward spiraling orbit. This seems to be one instance where Japan’s stable and interlocking system of shareholder groups is NOT serving them well, because it does not allow for a dynamic, shareholder-driven challenge to management’s reliance on bottom-line orthodoxy.

        • Thom Hogan

          One only has to go back to Kodak to see how that ends. ;~)

          But you are correct. Management is more concerned about shareholders than customers.

  • Eric Calabros

    ILC market scale: 11770 > 11000 Difference: 770
    Nikon: 3100 > 2600 Difference: 500
    So they believe the market contraction they’re talking about, is actually Nikon contraction.

    • Allan

      A similar analysis for interchangeable lenses and compact dsc shows that a significant part of the total market contraction in these two categories, is also owned by Nikon.

      Thanks for pointing this out.

    • Thom Hogan

      I deal with this on my site in my article:

      Nikon’s market share has plummeted, and their financials actually hide the fact that they are not going to reverse that course in the next six months.

      • Eric Calabros

        which indicates there will be no sub $900 mirrorless camera in the next six months. because I think even a not-perfectly-done-right DX mirrorless with only two kit lenses would be enough to keep them above %25 share. with introducing a FX solution, they just make a short term internet-based wow, meet half year profit expectations, and leave countless questions from loyal customers unanswered. it’s very unfortunate that seems Tokyo has already accepted the massive contraction fate and so they don’t even try to reverse anything.

        • Thom Hogan

          That’s correct. The financial results suggest that no relatively high volume product will be launched prior to (probably) CP+.

          Nikon has contracted before. Many times, actually, in both Precision and Imaging. It seems to be their management style.

  • SGG

    I guess, we have to wait for Thom Hogan to explain that for the normal reader…

    • Michiel953

      You could of course always try to read and comprehend yourself, and form your own opinion, instead of waiting for the traditional critics to come along and howl with the wolves.

      • Nyarlathotep

        I certainly did, but I’ll be honest, despite having fairly good understanding of financial data interpretation and descent feel for the consumer camera industry as a whole, having someone much more fluent in the particulars of an industry is a way better source at finding the nuance than I am. Plus, I don’t know much about Nikon’s groups outside of imaging.

        • Michiel953

          So you wait for an eternal criticaster to help you out?

          • Nyarlathotep

            I look at all view points, Thom included. Thom generally seems to be right in his financial assessments and how it has come to be based on their decision making. We may not like the news, but let’s face it, a lot of it is right. Otherwise, Nikon may not have found themselves in their current predicament (e.g. losing market share to Sony and Canon).

            • Michiel953

              Nikon is concentrating on high(er) margin product, increasing profitability and losing market share mainly to smartphones.

            • Allan

              Do we know if they are maintaining market share in the D5, D850, D750, D500, and D7500 groups?

            • Michiel953

              I don’t we have those figures.

            • Luca Motz

              I would dare to say no. Sony is nibbling away at their full frame market share because let’s face it this is where much of Sony’s growth comes from. We know Sony is growing and we know this market share growth does not magically appear.

            • no, we don’t, it’s only educated guesses

            • Nyarlathotep

              It is a shame Nikon doesn’t release data on each line. I have to assume the D7500 has not served them well. The D850 is certainly hot. The D750 is probably flagging given it is about due for a refresh. The D5 and D500, I don’t know. They probably have sagged too since they are not as fresh, but both are certainly very competent and hold there own against other contemporaries.

            • Thom Hogan

              D5, D850, D500, sure, I think that’s true, though the D850 shortages mask that some. D7500 and D750 maybe.

              But look at the CIPA shipment volumes for the last 12 months. DSLR down, mirrorless very up. Nikon has no play in mirrorless at the moment, and it’s pounding them overall. As I’ve written before, basically Nikon has circled the wagons around a small group of products. Given that they took out marketing expenses in the quarter, their ability to defend their position is going down. Moreover, talk to your local dealer. Ask them which of the Big Three brands is the one they’re most likely to drop.

            • Nyarlathotep

              Right, that is very evident, the question is, will this be enough? In the past, their net profit primarily came from volume on units such as the D3xxx and D5xxx products and the Compact cameras. If they continue to push towards reliance upon higher margin, lower sales number units, will they be able to survive on that smaller piece of the market? They seem to be losing traction in the D7xxx line too. But now that Sony has their guns pointed in this market too, are they now too vulnerable? These are all good questions. Have they shot themselves in the foot with terrible customer service? With such a small presence in the low end consumer markets, will they continue to be a household name? Traditionally they used these entry sales to slowly push buyers upscale at each upgrade to higher price points, but with the eroding low end sales and the lack of innovation there, that might make their upstreaming of customers a lot harder.

            • Michiel953

              It’s a new strategy, more or less dictated by developments in the marketplace. We’ll see.

            • Nyarlathotep

              Yes, we shall see. I don’t know that it is the wrong one, but they should focus on their marketing, which is weak, their customer service, which they have value engineered to a pretty poor level, and a solution to mirrorless eating their lower end lunch. Will they address the lower end? I have to assume yes, but I think they have had challenges internally deciding on what that should be. I just hope they haven’t waited too long to answer the call.

            • Thom Hogan

              Yes. One of the things I learned last week was that with Nikon’s volume coming down so much, their leverage at the sensor fabs went down, too. They’re finding other companies, particularly Fujifilm, who are buying more fab time and those fabs are near or at capacity.

              We really are going to get a Harvard Business School Case Study out of all this at some point, I think. The rule of thumb is that when a market pivots, the market leaders—which would have been Canon and Nikon with over 80% of the ILC market—have parts/supply benefits that they can use to mitigate erosion and can use to handle their pivot.

              Nikon is last to pivot, and waited until they lost a third of their volume to begin that process. They’ve lost volume benefits. How much, we don’t know, but it will have impacts all the way up the line, I think.

            • Thom Hogan

              You were correct right up to the last word ;~). Nikon is losing market share to camera competitors, and has done so on a scale not before seen in recent history. They’ve gone from 33% to 22% market share in ILC in just a couple of years.

            • Michiel953

              The interesting question is whether Nikon is losing share in a loss making (high volume, low margin) segment with no future, or in a high margin segment with a future.

              Competing with smartphones by producing a drove of p&s models is a mug’s game.

            • Thom Hogan

              Well, we sort of know that answer.

              Nikon is huddling the wagons around FX DSLRs (and the D500, and maybe the D7500). If you look at the volume those lines traditionally gave Nikon compared to compacts and consumer DX DSLRs, it’s small. Smaller than they’ve contracted to, which implies further contraction unless they have some answers in terms of future products below the D7500.

              There’s no other choice for Nikon. They can’t grow the D7500 and up lineup—even with perfect iteration—fast enough to make up for the volume losses they’re seeing below that line. Thus, it’s inevitable that they’ll lose market share unless they have future products that are going to perform better than existing ones in the P900 to D5600 range. Key words: better than.

              Here’s the problem: dealers. We’ve seen them abandon other brands when volume of people coming in the door just doesn’t justify carrying the full line. Nikon is getting closer to that point in the US. At some point it becomes a fait accompli that they lose dealers, and when they lose dealers, they’ll lose more market share.

              What we haven’t yet seen from Nikon is where they are going to manage to stop the bleeding. Right now it’s still impossible to predict where that might be, and thus, their fate.

            • Luca Motz

              Why are dealers selling Sony or even Fuji and Olympus and Panasonic then?
              Their volume is a joke compared to Nikon

            • Thom Hogan

              Okay, let’s start with Panasonic: it seems that most US dealers are not getting that directly from Panasonic, but via a distributor that sells them a range of products and accessories across brands, which means that they don’t need to take on required volumes of Panasonic product. So if they see some demand for a Panasonic product, they just do a minimal order of it.

              Olympus has a few dealers that do decent volume, including the one here in Allentown (Dan’s). But they don’t have a big dealer base like Canikony.

              Dealers are carrying Fujifilm because they are getting customers coming in the door asking about it, and Fujifilm isn’t particularly onerous in stocking demands. Plus, like Panasonic, dealers can get that through a distributor as well as Fujifilm directly.

              I think you underestimate Sony’s volume. Sony expects to sell 4.2m cameras in the same fiscal year that Nikon says they’ll sell 5.2m cameras. Sony’s numbers are getting escalated upwards each quarter now, Nikon’s down.

            • Allan

              Thom, during previous downturns, did Nikon have to worry about Sony?

            • Thom Hogan

              In imaging downturns, not really. They had to worry about Minolta in what, the 80’s, but they were already huddled up when Minolta rolled Maxxum. Minolta’s distraction with the Honeywell suit gave Nikon an opportunity to move back in and solidify their second place market share, but it also gave Canon the chance to dominate market share.

            • Luca Motz

              Definitely did underestimate Sony. Seems like Nikon will drop down to 3rd without even a chance at the end of this year. Christmas buying will benefit Sony with their current offerings way more than Nikon.

            • Michiel953

              I guess it’s all speculation really. Concentrating on lover volume higher margin product is in my opinion a good thing, even if it does come with some of the effects you mention and even if it does pose some solid challenges.

              My Amsterdam dealer made a (partly succesful) similar move a few years ago by phasing out the entry level stuff and concentrating on pro stuff. With partly successful I mean I still see some entry level product lying around, they still do passport photos and I still see tourists coming in (that’s a location thing). But you wouldn’t go there for your p&s; they’re cheaper at the big chainstores. Commercially they’re doing very well, and their expertise and service are exceptional.

            • Tony Beach

              Seems they have extraordinarily bad management now. Pretty soon it will be too late for them to recover from this.

            • Thom Hogan

              I’d say this: management at Nikon thinks they know the answer. It’s an answer they’ve used in the past. They also have a ton of Tokyo-based banks/financial shareholders sitting around telling them to preserve the dividend and profit, for self-serving reasons. It’s not a surprise that Nikon’s stock went up on this quarter’s financial report. They are going to increase the dividend, and, on paper at the moment, it looks like they’re managing contraction without busting any fundamentals.

              But Nikon is mimicking Kodak management’s decision: stick with the high margin stuff and don’t worry too much about the market changes that are provoking the problems.

              At some point, you find that you’ve run out of altitude. The plane is still flying and mostly level and operating within managed parameters, but it’s lost so much altitude and continues to do so that a ground collision will be inevitable unless you change something.

              I’m still waiting to see what Nikon will change.

            • Roger S

              Your aviation metaphor provides an excellent illustration of an unsustainable business practice.

    • ZoetMB

      Here’s a copy of what I posted in another thread before Peter posted the results in this thread:

      For the overall company (not just the imaging group), revenue is down 4.5% from last fiscal and down 0.8% from the last estimate. Operating profit is down 15% from last fiscal but up 35% from the last estimate. Op profit before taxes is down 27% from last fiscal, but up 19% from the last forecast.

      For the Imaging Group, they’ve actually decreased share to approximately (as compared to CIPA shipments in the same 6-month period) 21.6% in DLSRs, 20.2% in compacts and 20.3% in lenses. Hopefully they’ll gain back a few points once the D850 ships in quantity. Nikon themselves are predicting for the full year a 23.6% removable lens camera share, a 22.8% compact share and a 21.7% lens share. Which means that even with the D850, Nikon is still predicting share losses. Last fiscal (full-year), it was 26.4% cameras, 25.4% compacts, 24.1% lenses.

      Their new full year estimate, although an increase over the previous estimate, has them at 19.35% below the previous fiscal for DSLRs, 27.9% below for compacts and 19.91% below for lenses. So by Nikon’s own predictions, they’re still declining at substantial rates. CIPA has DSLR sales down just 2.9% for April-September, representing the first two quarters of Nikon’s fiscal.

      The estimate ups DSLR sales by 100,000 units, so that’s obviously the impact of better sales than expected for the D850, but that’s not really that big a number, which seems to indicate that they don’t think they can get a lot of units onto dealers shelves before April or that they don’t actually have all the sales that the current shortages imply. They’ve upped the estimate for compacts by 300,000 units!!! (How can that be?). They’ve upped lens sale estimates by 200,000 units. Those numbers also seem to indicate that there will be no mirrorless this fiscal year.

      Overall, I’d still say that performance sucks. Any American company would have long ago cleaned house. Nikon’s presentation materials still have the same generic meaningless phrases: “Strengthen profit model”, “Strengthen business structure”, “Efficiency and integration leading to improve productivity”, etc.

      • Nakayamahanzaemon

        “How can that be?”

        I don’t think that it’s impossible. Nikon estimated too low. According to CIPA, the shipment of P&S this year will be 6% less than last year if the current trend holds. If Nikon produces in tune with the market trend, this year’s production for Nikon should be around 3 million. But Nikon forecast that it’s 2.3 million, which is below the market trend. The upward revision by 300,000 to 2.6 million is still modest.

        • Thom Hogan

          You have to remember, most of CIPA’s estimates are done around CP+. They are wrong this year. The 12-month trailing shipments are a better gauge to estimate by, especially if you track the delta month to month.

      • Thom Hogan

        Nope. The D850 isn’t high enough volume for them to gain share. Not against the increased volume the mirrorless folks are producing. The D850 will likely hold serve against the A7RIII and the 5DIV, but that’s a very small, narrow market.

        Note also that Nikon’s full year forecast numbers actually use what appear to be outdated CIPA numbers (see my article). They’re overstating their likely market share for the full year. It will go down more is my bet.

        Compact estimates will be up because they have a couple of models that will finally hit once they get them into a plant other than Wuxi.

        I agree with you. I’d be ashamed of being in charge of the kind of performance Nikon is producing. Sure, they’ve managed the back-end stuff to preserve profit and cash and equity, but when you contract this much eventually it catches up to you. I’ll bet that they end up charging off more assets in Imaging than they’ve admitted to so far.

    • sickheadache

      Thom knows how to computate.

      • Thom Hogan

        Wow, I learned a word. Didn’t know computate was actually a word.

        • Roger S

          Its a portmanteau word blending compute and amputate. It’s when you figure out how to make your financial numbers look better by cutting costs. (Actually I made that up.) In any case, Thom I think does know computating when he sees it. 🙂

        • sickheadache

          It has been around since Jethro Bodine Days…Computation …A Form of it. lol

          • Roger S

            I should have caught that! I’ve been around since Jethro Bodine Days too!

          • Allan


  • Ask Kodak…

  • Rafael Garcia

    Easy, it is call re-structuring. Take this from this point of view, Factory close: mean two things one cost cutting(saving goes to high margin items, e.g.D850/mirrorless). Cancelling camera series, is very good, if you can combine d3XXX with d5XXX then you have d7XXX and d5XX at the APC sensor. Now in the FF d7XX/D8XX/d5, plus mirrorless

  • animalsbybarry

    When I look at these charts it appears that revenue continues to drop, sales are dropping and profit is up

    In the short term I guess results like that can be achieved by aggressive cost cutting, but I do not understand how profitability can be sustained in the long term

    Competition wise…Canon continues to gain market share
    Sony is aggressively marketing a D850 competitor (A7Riii) and they are rapidly catching up in terms of lens selection
    Thier biggest gap was in long lenses but they have recently released a 100-400 F4.5-5.6
    Anounced a 400 F2.8
    And a new rumor hints that a 200-600 may be coming

    Nikon May have waited too long to get into a serious mirrorless FF camera and the window of opportunity may have already closed for them

    • all that should make you decisions much easier – buy the Sony and enjoy it

      • animalsbybarry

        I am determined NOT TO DECIDE on my next camera until shortly before my spring photo expeditions

        Currently I like both the D850 and the A7Riii and am flip flopping with each new rumor

        Some of us have nicknamed the rumored 200-600 the Barry Beast…..but is still only a rumor that may or may not happen

        Currently there are no satisfactory Sony lens choices for me, so unless something like the Barry Beast emerges ….Sony is not currently an option for me

        • My only recommendation is not to make your decision based on rumors… you know that Canon is also rumored to release a 200-600mm lens lol 🙂

          • animalsbybarry

            I will not decide on rumors
            I will decide based on what is actually available shortly before I am ready to use it

            • exactly, because if takes this new 200-600 lens over 2 years to get released (if it does) like many other rumored Sony products, you could be in for a big surprise

            • Sawyerspadre

              Rent the Sony and the Nikon, buy whichever you like. Do you have Nikon lenses? If so, then the benefit of waiting for imaginary Sony lenses seems elusive. If you need long glass,it’s a pretty easy choice today. What is it that a A7riii would do, that makes it better than a D850? Not being a jerk, just wondering what makes it attractive.

              BTW, I am still one of the cretins who are scraping by on my D700, D750 and a mix of D and G primes. Heck, I even still own a D300s, positively cro-magnon.

            • animalsbybarry

              As I have said elsewhere I pan to wait and decide in early spring
              I believe both cameras have advantages and many sites have side by side comparisons

              The Sony has burst speed , silent shutter, EVF, lighter and smaller (will better fit my travel kit) iso and dynamic range
              The Nikon has battery life , lens selection , higher resolution, OVF,

              But the differences are slight, image quality seems very comparable, and which you like is dependent on what features are more important to you, as well as how locked into a system you are

              I do believe these are very comparable cameras

              I will not commit to picking one over the other at this time

            • I will just leave this here – it’s from the Sony a7r III manual (page 8):


            • Roger S

              It looks like the lawyers addressed this problem before the engineers did. Yikes.

            • Yes, by mentioning it in the manual, this is no longer an issue, it’s expected behavior 🙂

      • Luca Motz

        This is it how it works Peter. People who are invested in Nikon gear can’t just go and switch to Sony.
        Also anyone who says Nikon is not competitive right now is a fool. The question is will they be competitive in let’s say 5 years?
        This makes buying lenses NOW extremely hard and that is probably why lots of people are upset. The last camera syndrome people how Thom likes to call them are happily purchasing Nikon glass as nothing out there beats their current offerings. The people who think they will be replacing their body in the future but obviously not their lenses are worried

        • ZoetMB

          The quality of the products might make Nikon competitive, but the results in the marketplace show them not being competitive because they’re losing market share. So consumers are making other decisions.

    • Hans J

      I hope Nikon becomes the Apple of the camera world like they used to be.

      • IanMak

        Its not the company but consumer demand is tanking. The smartphone companies market their smartphones as if they replace DSLRs and consumers are dumb enough to think their Sony ZX premium 21mp camera can match Sony A9

    • Jim Huang

      I don’t think the issue is whether Nikon has made FF mirrorless or not, but rather lack of features compared to other companies. Nikon could have put has much tech as Sony. Nikon has most of the technologies. I really dont know why they don’t use it.

      I don’t think A7R Mk III would get as much hype if it is without PDAF, focus peaking (at 4K mode), logs or slow motions, IBIS…etc.

      I see no reason why DSLR can’t be just as good as mirrorless, apart from the form factor. Pentax shows that you can have IBIS in a DSLR, Canon shows you can have on sensor PDAF with their dual pixel AF, Sony has proven you can have all of them with their SLTs.

      Nikon makes AWESOME photographic cameras for people who like to use a viewfinder, but for people in their mid 20 or younger, Nikon DSLR really looks like a really refined steam train rather a fancy Maglev.

    • Thom Hogan

      Yes, such things are rarely sustainable in the long run, as you eventually stop cutting out fat and start cutting bone.

  • it’s called restructuring and staying profitable, it happens all the time with many companies

    • Nyarlathotep

      Agreed. With a large reduction in units sold and marketing mix, they have to restructure their product lines and all of the support that goes with these lines. Compact camera and low-end DSLR sales has collapsed industry wide. The operations that relied upon those sales need to be restructured or eliminated.

    • Thom Hogan

      Sure. What some of us are starting to wonder though, is how much Nikon’s books reflect the problems we’ve seen previously with Toshiba, Hitachi, Olympus, and a host of other companies.

      This is the first financial release I can recall from Nikon where I can see some clear evidence of trying to hide some bad news and putting brighter spin on the bad news they do report. For instance, they tried to separate out the tax consequences of closing Wuxi as if it wasn’t part of the cost of closing Wuxi.

      Also note that inventories went up, yet the products they can sell seem to be out of stock ;~). There’s going to be a correction to bring that into balance, too.

      My prediction is this: Nikon has more bad news that they’ll mostly withhold until the fourth quarter (after Christmas), at which time they’ll take an additional restructuring cost while trying to paint a rosier future with a new product release of some sort.

  • MB

    People should realize that almost half the revenue Nikon used to make was from point and shoot compact cameras … massive sales but very low margin products … and those are the cameras that are failing most rapidly due to the cell phones … if we keep this in mind the results are perfectly logical and not overly catastrophic … although Nikon could have done better …

    • Roger S

      I can’t remember where I read about Nikon in India — possibly here on NR — but I recall that Nikon explains their great success there (where they dominate the market) by the general increase of interest in photography caused by the proliferation of smartphones. Essentially Nikon has been able to promote their cameras as an upgrade for those whose interest in photography has surpassed the capabilities of smartphones. They’ve also done some aggressive customer work by promoting “Experience Zones” within stores around India that give customers hands-on experience with the whole range of Nikon products. The point of all this is that India appears to be one place where Nikon has done better. With the right strategies, Nikon should be able to recover from the collapse of point-and-shoot cameras in other markets as well. Only time will tell, of course, but Nikon must certainly have some profitable ways forward.

      • Yes, I remember posting a series of articles on this topic. I think Nikon has like 50% market share in India if I am not mistaken.

        • Ushanas Trivedi

          Yes. I am from India & Nikon is no. 1 imaging company here. By what share, that’s not known to me but 50% may be a fair estimate. Nikon is very aggressive here in marketing, promotions, distribution & top class service. That’s we wonder when we hear Nikon being poor in these areas in other regions. You may not believe but promotional schemes are on even for D850 which is in shortage. You get a backpack free with D850. Not only that if you happen to buy 24-70G, 70-200 f2.8E or 200-500mm along with D850, you get either 85mm f1.8G or 70-300mm absolutely free.

          • Allan

            Send us a picture of the backpack, if you can. Thanks.

          • Nice to hear – India is a huge market, good to know Nikon is doing well there.

      • br0xibear

        “India appears to be one place where Nikon has done better. Given the
        right strategies, its reasonable to assume that Nikon should be able to
        recover from the collapse of point-and-shoot cameras in other markets.”
        That’s not going to happen, India is a very idiosyncratic market…brands, status and association with certain celebrities is a massive driving factor there. (I’m not talking about enthusaists or professionals).
        It’s the entry level DSLRs that sell well there.

        • Roger S

          I take your point about India’s idiosyncratic market, but I think that the strategy I described of marketing to consumers who want to move up from a smartphone is consistent with your observation that the entry level DSLRs sell well there as status symbols. I guess my point about India was that Nikon seems to have done a reasonable job of adapting to conditions in that market. I should have made it clearer in my final statement that the India experience does not indicate a particular way forward for Nikon in other markets, which as you suggest will be quite different in character from India’s. Nikon’s India experience does suggest, though, that it can be adaptable to different markets, whatever they might be. The “right strategies” that I mention should be understood not as the strategies that worked specifically in India but as the right strategies for other distinct markets, including those where past demand for point-and-shoot cameras has collapsed. Time will tell whether Nikon can prove to be that adaptable in diverse settings, but I assume that there are ways forward for Nikon in diverse contexts if they can work them out.

          In digested form: I take your point and don’t disagree.

    • ZoetMB

      Wrong! Nikon is losing market share in every category. If this were only about market contraction, the unit sales and revenue would be smaller, but Nikon would have at least the same share they had. But they’re not – they’re losing market share which means they’re getting beaten by the competition, not by smartphones. In fact, Nikon has upped their forecast of how many compacts they’re going to sell this full fiscal year by 300,000 units. Still losing share though.

      • Eamon Hickey

        Yes, Nikon should be alarmed by this. I’m sure they are. The basic story in ILCs is that 2017 has turned out to be the tipping point year for mirrorless, and Nikon got caught with no viable mirrorless offerings. Very bad product planning. Again, they must be perfectly well aware of this.

        It’s not too late to recover, but they will need to execute well. To do that, they need a solid ILC growth strategy, not a cost-cutting plan. So far, they’re showing only the latter. Doesn’t mean they don’t have a growth strategy. The next 24 months will tell that tale.

        All that said, cutting out the gigantic cancer that was the chip stepper business was much, much more important to Nikon’s future. That had to be priority #1, and it was. And, of course, in the biggest picture, they need a solid growth path beyond cameras. That’s a much harder puzzle.

        • Thom Hogan

          Yes. Word I get is those still left in Tokyo (they did just lose a lot of personnel, many through early retirement, some through attrition to other companies, some by head count reduction) are indeed in a panic, and have been since when their ILC market share looked like it would go below 30%.

          NIkon’s recovery is going to be slow, best case. They didn’t manage to hit their first self-imposed deadlines, and they were late to realize just how lenses would play out in introductions.

          The problem I have is centered around one of your points: “they need a solid ILC growth strategy, not a cost-cutting plan.” They just pruned off more of their sales and marketing support. They need to make a splash both technologically (great camera) as well as in customer perception (great marketing).

    • Thom Hogan

      It’s not so much that the compacts were low margin, it’s that Nikon was oversupplying to demand and having to use a variety of techniques that undercut that margin.

      Moreover, I think you’re partly wrong. I did an analysis back around the peak sales point five years ago that showed that Nikon’s primary profit engine in cameras at the time was DX DSLRs. The volume there was incredible, and the margins were good. Canon has somehow managed to sustain their crop-sensor DSLR sales, Nikon hasn’t.

      • Horshack

        I think the dual-pixel technology played a big part in buttressing Canon’s DX line. It solved a big problem – poor AF performance in video. They saw a revival of DSLR sales for video from it.

        • Thom Hogan

          I wouldn’t disagree with that. Coupled with continued strong marketing and a “no real surprises” iteration and develop strategy, Canon is running decently and weathering the storm far better than Nikon. If they drop a full frame mirrorless solution just before Photokina as many of us expect them to do, and it is as we expect it, they’ll have positioned themselves well to keep their big base of lens users intact.

  • I’m not sure what’s funnier, the comments here about Nikon’s financial performance or this morning’s edition of Squawk Box on CNBC.

    • Roger S

      Well, it’s been years since I’ve watched Squawk Box. Can you provide a hint as to the goings-on?

  • ZoetMB

    It takes far more for a public company to be successful than profitability. It takes growth. And there’s no growth at Nikon.

  • Eamon Hickey

    Lithography is two different businesses — chip steppers and flat-panel display steppers.

    Chip steppers was, 15 years ago, a huge and profitable business for Nikon but was a gigantic money-loser for the last 10, until Nikon drastically cut it back last year.

    The less prestigious flat-panel display stepper business is healthy and, for now, profitable. It is one of only two solidly profitable business units at Nikon (the other is cameras, obviously). That’s the result you’re seeing in the numbers.

  • Nakayamahanzaemon

    I think that Nikon is very modest to forecast for the precision equipment business. Tokyo Electron, another semiconductor production equipment maker like Nikon, has just revised upward its outlook for revenue and profit by 50% and 70%, respectively, while Nikon kept its outlook mostly unchanged. It’s odd if Nikon cannot get any benefit from the current semiconductor boom. It’s possible that Nikon is losing in the business, though. Anyway, I’d not be surprised if Nikon revises upward its financial outlook in the current quarter.

  • Bob Thane

    Haha, I can’t tell if you’re serious or not, but I enjoyed the emojis.

  • Salty-snack

    The slide continues…

  • RodneyKilo

    If only Nikon were as smart as we all are, and knew as much about the camera business as we all do.

    • HD10


    • Claude Mayonnaise

      I know you are joking but there is truth in what you say. We all love to be armchair quarterbacks, but Apparently Canon and other companies must be listening to their customers in some regards or persuading Nikon users to switch because they are running away with market share. Customers are buying their products for one reason or another. Let’s hope it doesn’t continue or else we’ll all be searching for a new camera system in a few years.

  • Thom Hogan

    The Precision business unit took massive write-downs last year to bring that business back into profitability. It’s still a very cycle driven business, too, so you can’t really analyze even a one-year profit number without looking further both directions.

    The Imaging business unit is just starting to take write-downs, and I suspect they’ll have to take more.

  • Gaonkar

    DSLR technology is come to such a stage that its leveled off.

    The Mega Pixel race is also going to slow down now. People don’t need higher Mega Pixels any more.

    What people are interested in is affordable products having latest technology giving good images & videos.

    Note: A good image doesn’t necessarily reveal by which camera it was taken but it surely reveals the man behind the camera & his skills in making a good image.

    • TurtleCat

      Which “people” are you referring to? I see on smartphone forums people still lust/gloat over more megapixels. It’s a number people understand and more has to be better, right?

      • Gaonkar

        I am not comparing Smartphone users with DSLR Users. Probably Smartphone users may be wanting More Mega Pixels because of poor results.

    • Al Eisen

      Yeah, I agreem especially from an IQ standpoint. The D500 image quality is nearly as good as full frame, IMO, which is more than good enough for most people. Every new camera that’s been released lately has pretty much the same IQ as the last model, maybe a tiny bit better.

  • Al Eisen

    Makes me wonder if actually producing enough D850s to fill orders at launch would help them out? The production of those seems to be trickling out. From what I’m reading, it sounds like it wouldn’t matter anyway. They are in trouble. At this point, I’m not sure launching a mirrorless line would do much good. If I wanted mirrorless, I’d just buy from Sony, since they have a proven product, and they make the sensors, anyway.

  • Kyle

    With Panasonic’s new G9 camera, I’m beginning to seriously think about making the switch to it. I’ve seem some of the GH5 IBIS and it’s insane.
    I love my D750 and D7200, but I’ll be looking to upgrade in about another year and the G9 may be where I end up for photo and video work.
    I mainly do weddings right now.
    My main second shooter uses a Sony a7s and a7r2, but I don’t like either one of them every time I’ve tried them.
    I had a GH4 that was nice, but I needed the money at the time and let it go and kept my trusty Nikons since I already have a ton of lenses for them on FX and DX.

  • Yes, Nikon stock is going up:

    • Thom Hogan

      You might want to look at Kodak’s stock history. This is 1997 to present. Note when that run-up to highest level was.

      Look, I’m not trying to advise anyone on stock price and investment decisions here. If I were, I would have told you to buy Nikon stock two or more weeks before the financials were released.

      What we’re talking about is long-term market viability for CUSTOMERS. The same problems they had in Precision they now have in Imaging. This is systemic.

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