Nikkei: Japan’s precision instrument makers forecast profit growth

From Nikkei - Japan's precision instrument makers forecast profit growth:

"Canon, Nikon and other imaging-heavy precision instrument makers are poised to capture higher operating profit in fiscal 2017 as camera demand rebounds. But companies focused on office equipment sales are seen struggling as that market continues to slump.

Operating profit for Nikon's camera business is forecast to increase 46% to 25 billion yen ($219 million) for the year ending in March on strong U.S. sales of new single-lens reflex cameras. The segment looks to account for 34% of Nikon's total operating profit, which is expected to soar 58-fold to 45 billion yen."

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  • Nemmondom Meg

    Still they doesn’t seem to understand the logic behind. If someone buys a camera, usually it is the best the one can afford. They will use it for long time. As it is good, they will keep it. D700, d3x still good camera, still people consider to buy them used. d700 is 400Euro used, and thy were top cameras 5 years ago. The picture they make didn’t become bad. There are better cameras around, but not for that price, and IQ still outstanding. So my point ppl change their phone in 2-3 years, a 2 generation makes a difference there. In camera if it is enough for you, hard to justify the high price of a new camera. So Nikon Came out with D500, d850 what are really outstanding cameras. The low income was mostly because there were no big changes in the last years (and what was big change made nikonians selling their gear), now the high income is because there are big advantages in those new cameras. But this motion wont last long. For who it is important buys it, the rest wont. So next year can be good for nikon, but the 2. half of the next year, I doubt. It is not the phone cannibalizing the camera business. Whoever ever had a dslr, wont be satisfied with a phone pictures. What happens the lifecycle is slow, and the income is kind of pulsating, it has local maximums, than long declines.

    • decentrist

      Agreed going forward, but fewer are aspiring to dslrs because the gateway drug was point and shoot before phones became”competent”, combined with the last recession…that dynamic slammed the brakes on sales not that long ago. I believe Nikon has finally awakened to this in the past 12-18 months. It took them far too long with the obtuse financial forecasts followed by the inevitable management purge/restructuring/closures. They’ll need to keep elevating their game just to stand still given the market.

      • Nemmondom Meg

        They are simply stupid. Nikon still creating machines. In current days machine and software it is. Phones are making miracle from crap. Nikon should be able to do it as well. I go one step further. They should make the best processing algorythms licensing to phone companies etc. Nikon will fail as doesnt understand what time demands. Thay are polishing the existing, dont do any innovation.

        • Spock

          Canon is worse.

          • nzswedespeed

            But Canon are well diversified so probably have more time up their sleeve

        • BG

          “Phones are making miracle from crap.” – well said.

        • steeler_fanatic

          Machines, software and services.

          • Nemmondom Meg

            Agree, forgot the service, however it is equaly important as the other 2.

  • Eric Calabros

    “companies focused on office equipment sales are seen struggling as that market continues to slump”..I wonder why this market hasn’t fully collapsed yet.. who use these multifunction printers? Governments?

    • nzswedespeed

      You’d be amazed how much paper is printed for small to large businesses. I know it shocked me in the “paperless” environment we live in…

      • TurtleCat

        It’s very common for medical and legal companies as faxes are the only legal way to sign documents currently in the US. If the law ever changes then I think you’ll see a big drop off in paper usage.

        • Just Me

          There are alternatives but convoluted and expensive. Faxes work.

          • TurtleCat

            Yep. And they’re still increasing. The company I work for produces solutions that involve faxing (among other things) to the healthcare world so I see the numbers all the time.

        • ZoetMB

          I don’t think that’s correct: “Lenders have increasingly begun to accept signed and faxed documents as sufficient to complete a contract. However, the age of faxed documents may soon be nearing its end as many businesses are now turning to digital signatures to finalize documents. Digital signatures can allow borrowers to review and sign documents online – without having to print and add a “wet signature” (unless specifically desired by one of the parties involved). “

          • TurtleCat

            Except that isn’t true in healthcare. It’s very fax oriented. Every year we think we hit peak fax but our transaction counts keep going up. As someone who works in healthcare software I do know the facts of fax transactions in the industry. We know it’s one work of legislation away from changing but it hasn’t yet.

  • Allan

    What exactly is included under the umbrella, “precision instrument makers”?

    Also, why even compare Canon/Nikon, etc., to office equipment makers? Who cares if office equipment makers are doing well or badly? It has no bearing on the success or lack of success of camera manufacturers.

    The tone of the excerpt sounds very biased.

    • IronHeadSlim

      Canon makes a whole lot of office equipment.

    • Nakayamahanzaemon

      Precision instrument makers include, for example, a company which makes an equipment to manufacture semiconductors. Applied Materials, a US company, is one of the biggest in the industry. Canon and Nikon are making a stepper which is also critical for manufacturing semiconductors.

      Japanese camera makers, such as Canon, Ricoh, Minolta, etc, got into copier business to diversify themselves for more business opportunity. Their expertise in making optical lenses is beneficial to read papers for copying. Office equipment makers include those companies along with Kyocera, all of which are making camera lenses even now.

      • Allan

        I think one of the oldest companies that diversified was GE, General Electric. I don’t know how successful they were with their diversification.

        What I don’t understand is why Apple, with a lot of cash, doesn’t diversify?

        • steeler_fanatic

          Agree on the Apple comment. I think they are staying true to Steve Jobs and his mantra on focus on a few things done extremely well. The iPhone may be too successful for their own long term good. They could buy Nikon with spare change 😉

        • Nakayamahanzaemon

          It depends on the terminology of diversification, but Apple actually got into the business of video consoles, audio players, or even digital cameras before Steve Jobs came back. Apple has succeeded in the smartphone business which doesn’t necessitate them to diversify now, but if the smartphone doesn’t make money any more, it’s likely that they diversify into some other business like before.

        • ZoetMB

          Because their relentless focus led to their incredible success and because Apple only wants to be involved in high margin businesses. In the phone business, Apple has a relatively small market share, but they have over 90% of industry profits.

          When Jobs returned to Apple in July of 1997, he drew a grid with four boxes: Mac Desktop Pro, Desktop Home, Laptop Pro, Laptop Home. Previous to his return, Apple was producing 45 different desktop models per year under Mac, MacLC, Performa and Quadra labels. It was a convoluted mess and the rumor is that an awful lot of those machines went to landfill after his return.

          But having said that, Apple has actually diversified. Apple Services, which is storage, iTunes, App Store and Mobile payments is now almost large enough to be a Fortune 500 company all by itself and most people think of it as an afterthought.

          Apple itself has Mac, iPad, Phone, Watch, Apple TV and soon, Home Pod. They’re making a big push into the medical area and big R&D into AI and the tech behind driverless cars. Personally, I think in 15-20 years, Apple becomes primarily an AI and Robotics company. If you look at how fast they’re hiring people, it’s way too many people just to design the next iterative iPad or iPhone or the next iterative versions of the OS.

          • Allan

            ” … Apple becomes primarily an AI and Robotics company.”

            I thought I read somewhere they might be doing some aspect of research and development for self-driving cars.

            • ZoetMB

              I wrote that: “…and the tech behind driverless cars.” They originally seemed like they wanted to produce their own self-driving car, but they seemed to have abandoned that project. Now it looks like they’re concentrating on the tech behind it as many others are as well. But that could be a cover. Apple is a very secretive company and they could be working on just about anything.

            • Allan

              Oops!! Sorry.

    • Thom Hogan

      I’m not sure why they didn’t just name names. Fujifilm and Ricoh, for instance, are the huge office equipment makers. Canon and Nikon have large precision instrument (semiconductor) operations. Olympus is a huge medical company. Sony is a large entertainment and insurance company.

      The problem in Japan is this: most of these big companies became conglomerates of some sort or another. Through acquisitions and mergers and development they went into many multiple businesses. The thinking was that if one business went flat, the others would take up the slack. And that’s apparently exactly what this article is trying to say, though it says it extraordinarily poorly.

      For example, it says that the instrument makers are showing profits, but then pins those profit increases at the two biggest ones on cameras. How that logic flows, I don’t know.

      • Nakayamahanzaemon

        Actually, Fujifilm itself isn’t a “big” office equipment maker. Fuji Xerox is.

        • Thom Hogan

          Are you really going to try to make that distinction?

          “FUJIFILM Holdings Corporation (75%)”

          Fujifilm owns 75% of the “big office equipment” company. No, it’s not 100%, but it’s more than a controlling interest and the results accrue up to the Fujifilm holding company financials.

          • Nakayamahanzaemon

            Of course. Fuji Xerox is a different company from Fujifilm, even though both are currently under Fujifilm Holdings. I have never, I mean NEVER, heard of people except you saying “Fujifilm is a big office equipment company.”

            Fuji Xerox is a joint venture between Fujifilm and Xerox (or Rank Xerox initially) with each having half of stakes. But Xerox sold most of stocks to Fujifilm due to declining business. So Fujifilm made Fujifilm Holdings to save Fuji Xerox, controlling both of them under Fujifilm holdings. Fujifilm Holdings started itself in 2006. Until then, Fuji Xerox was run very differently from Fujifilm.

            • Thom Hogan

              I’m well aware of the history, including from the annual report ” Converted Fuji Xerox to a consolidated subsidiary.”

              Bottom line is that Fujifilm Holdings is what reports Fujifilm’s businesses, and document solutions is 47% of that business, and imaging solutions (which includes more than digital cameras) is 14% in the previous fiscal year.

  • Allan

    Isn’t $219 million operating profit, a little number?

    • ZoetMB

      Yes. The Imaging division earned $731 million in fiscal 2013 and almost $737 in fiscal 2008, so it’s a huge drop. It was $286 million in fiscal 2006. That year ended just three months after the D200 was released.

  • Filomela Caldeira

    Was recently looking at some lenses, the 105mm f/1.4, in particular. Now I see how Nikon can still manage to profit while their market share tanks. They are charging made in Japan prices for made in China, plastic lenses. Bravo…I guess.

    • decentrist

      you forgot the kit lens micro motor af with nylon gears instead of true ring af

      • Luca Motz

        Well the nylon gears are really not a problem at all. In fact it’s probably more resistant than any form of metal would be 😉
        Them kinda lying in the marketing material is still not nice obviously

    • Espen4u

      You’re right. Sigma could’ve made and sold that lens for nearly half the price, and still made a profit. So we’re all paying for N’s misstakes in management, as I see it.

  • Robert Falconer

    “…as camera demand rebounds.”


    • Thom Hogan

      Trailing 12 month numbers (Sept to Sept) are:

      2016 11.4m ILC units
      2017 12.3m ILC units

      Similar things happening in compacts and lenses. And the delta in the trailing 12 month numbers has been going up, indicating rebound.

      • Spy Black

        Although that’s certainly good to see, can one really call that a rebound? Unless the numbers continue to rise it may just be a passing spike.

        • Thom Hogan

          The truth is that we don’t know yet. The quake probably artificially deflated what units the camera makers wanted to ship and now they’re essentially pushing the volume back up, but higher than it would have been without the quake.

          The thing everyone will be looking at is sell-through in the current quarter. If all those units stuffed into the channel sell, then I’d expect everyone to continue to produce more units in 2018 and we very well may have a true rebound. But we won’t know about that for another six months or so.

        • Robert Falconer

          My point, exactly. We don’t have enough data yet to call this a trend line.

      • Allan

        0.9m units is a significant number. Why has it gone up? Where is the growth (?India, ?China)? The camera makers need to look at the characteristics of these 0.9m buyers (thank you, thank you – me) and entice more people to buy cameras.

        • SteveHood

          Mirrorless growth accounts for a chunk of that and Nikon won’t be seeing any of it.

          • TurtleCat

            Maybe. Could just be a blip, too, as people are sampling cameras by adding another (From a different manufacturer). What will be interesting is seeing if this is a real trend or a temporary thing.

            • Thom Hogan

              These are CIPA shipment numbers, so they don’t really represent a “consumer buying” trend. They represent what the camera makers want to be a trend ;~).

          • Thom Hogan

            That’s correct.

        • Thom Hogan

          Well, it’s interesting to look at the data broken out by region and by manufacturer where we have that data.

          As @SteveHood:disqus notes, the increase is basically in mirrorless for ILC units. Nikon doesn’t play in that market any more. But what has to really concern Nikon is that the shipments of mirrorless to the US are up 79% in units and 100% in value this year (year-to-year comparison) while DSLR units and value are essentially flat. This is the “Sony now #2 in Value in US market for full frame” thing, writ large in numbers that any analyst worth more than a open carton of Oreos can’t miss.

          But in terms of knowing the characteristics of the “buyer,” those are shipment numbers, not buyer numbers, so we don’t know who the buyers are yet.

          • Thom Hogan

            To carry that thought forward: Nikon’s in between a rock and hard place. Can they hold share in full frame with the D850? Worse case: probably not. Best case: barely, and probably in limited markets.

            So Nikon has a full frame problem. And that problem is Sony A7 and A9 cameras.

            But they also aren’t holding serve in the Coolpix to D5600 range. The problem there is Canon and Fujifilm. Very different problem in that crop sensor range.

            So Nikon needs both DX and FX mirrorless offerings. The DX one has to be at least fully competitive with the Canon M line. The FX one is very problematic, as the A7RIII and D850 live in basically the same space, so attacking the A7RIII means that the D850 is short-lived. Knowing what I know about Nikon, they won’t undercut the D850. So what exactly will they produce in full frame mirrorless?

            Here’s my best guess: the D610 replacement will carry on the F-mount and go mirrorless. A Df replacement will carry a retro-type design into a new mirrorless mount and more target the Fujifilm X and Sony A7II.

            Put another way, if Nikon can’t really target high pixel count mirrorless because of the D850. If they target 20/24mp full frame mirrorless they need to do so in a way so that it’s clearly differentiated away from both their own other offerings (D750) and the A7II. That doesn’t leave a lot of design space.

            • Thom Hogan

              And to follow up to that, you can see Nikon’s other problem: lenses.

              DX mirrorless requires new lenses, at least a half dozen to compete against current EOS M.

              FX mirrorless with the existing mount still could use new lenses. In particular, for a D610 mirrorless we’d want at least 18-35mm and 24-85mm AF-P lenses (we have the 70-300mm ;~).

              FX mirrorless with a new mount in retro style absolutely needs new lenses, and maybe not zooms (other than a kit lens of some sort). Indeed, an FMD mirrorless with 24, 35, 50, 85mm primes would be a very interesting way to get to differentiation.

            • Luca Motz

              How popular are convenience zooms though? I would think you could cover the mirrorless launch reasonably by pushing out small and lightweight wide angle normal and short telephoto primes for the DX mirrorless. If people really want to strap some sort of all in one lens on their camera they probably don’t really mind if it’s a bit bigger and at that point you can use all the DSLR lens offerings out there with an adapter maybe.
              And at least for launch I would say FX mirrorless is reasonably well fitted out with lenses because most people buying into it will want to use their F mount glass anyways

            • Thom Hogan

              They’re popular enough that everyone makes one. Everyone.

              This is one of the toughest things about product line management. If everyone else is doing something and you choose to do something different, it’s incumbent upon you to market the reason why in a way that’s compelling. Nikon’s not all that good at marketing to start with, but exactly what is the compelling thing about “no zooms”? ;~)

            • Luca Motz

              You know how I’d market it? Show them beautifully composed images with amazing subject isolation and very creative angles. Say: “Every artist needs a tool to fuel their creativity. Get your Nikon prime today” (or something like that. I’m an engineer not a marketing guy!)

            • ZoetMB

              Upper-end experienced enthusiasts, yes, consumers, no. Consumers want their zooms and I don’t blame them. And it’s one of the things that DSLRs and equivalent sensor size mirrorless cameras do far better than smartphones so it’s something that they have to push.

            • Luca Motz

              I just don’t think this market segment is necessarily there. I recently had a friend asking me about purchasing a camera and being able to zoom was not important at all. Image quality was. Especially low light. Also Bokeh was something that was important to him. After I showed him the Canon EOS-M offerings and explained that he really wants a fast prime with it on top of the kit lens he was not too happy about the implied costs. I’m going to sell him on the new Nikon DX mirrorless offering hopefully (I’m an active Nikon supporter!) even if it means lending him a 50 1.8 or my 35 1.4. But back to the point: At least the people I know are not interested in zooms at all for differentiation to smartphones but rather bokeh and low light

            • Luca Motz

              Or replace the D750 with a mirrorless version and not refresh the D610. Make the D750 replacement as expensive/cheap as the D610 used to be and hope that Sony doesn’t come out with an A7mk3 that beats it in every way. Next up is a Canon EOS M competitor and I’d say Nikon has solved a number of problems.
              The high end customer can pick up the D750 mirrorless replacement as a second body or light back up. The prosumer or full frame hobbyist can pick it up as their primary body and the “low end” customers can go all crazy about how good Nikon’s high end cameras are (both mirrorless and DSLR) and pick up their low end mirrorless offering and still brag about it. Sounds like a win to me.

            • Thom Hogan

              Personally, I’d say no. The reason is that doing it that way says this: DSLRs are dead, the D850 was the last one. Nikon needs a cleaner way of transitioning than that, considering that Sony has a line of four models they’d be competing against.

            • Luca Motz

              Let’s face it though: DSLRs ARE dead for anything but the D5 line.
              Sure the D850 is a great camera and I love it but I’m pretty damn sure Sony (or Nikon for that matter) can come up with a mirrorless alternative (or maybe the A7r3 is that)
              Where is the problem with communicating that message?
              You want the best of the best in an indestructible package? Get the D5 or D6. You want something else? We are now making mirrorless offerings that are just as good as our DSLR offerings.

            • Thom Hogan

              And yet, DSLRs still seriously outsell mirrorless cameras.

              This has been Canon and Nikon’s problem ever since m4/3 popped up in 2009 and the smart folk figured out that the future was mirrorless at some point: Canikon controls over 90% of the DSLR market, and that market is even in the last 12 months still twice as big as all of mirrorless.

              If Canon and Nikon do anything that proclaims that DSLRs are dead, they will have to immediately replace all that extra DSLR volume they have with mirrorless volume. Immediately, as in one day. Otherwise they will lose market share like you wouldn’t believe and their stock price will take a real whack.

              Canon’s doing this transition right. Nikon did it wrong (Nikon 1). Nikon’s second attempt is coming.

            • Luca Motz

              That is something I have not considered and a serious problem. So Nikon is actually forced to make their mirrorless offerings worse than their DSLRs but still good enough to compete with Sony. I’m not even sure where or if that market segment exists. Canon grabbed the one that was still available at the time sure enough.

            • “I’m not even sure where or if that market segment exists.”
              Yes, that segment exists. Within hardcore nikon fans who want mirrorless. They don’t need to compete with sony to KEEP what they have. The second iteration onwards will help getting back the lost ground to sony and canon. And the transition will be gradual enough.

            • Luca Motz

              Well if they only keep what they have currently with their first iteration Nikon will be in a lot of trouble. Sony currently sells more cameras than Nikon does in that range.

            • Yes. But sony doesn’t have what current nikon owners want. Nikkor lenses, ergonomics,colours and so on. Don’t get me wrong. This first iteration is just to keep current customers interested. Not all of the mirrorless interested nikon users would buy it. I won’t until next version. But at least we won’t shift to canon/sony in the meantime.

            • Luca Motz

              Yeah but Sony doesn’t stand still while Nikon sorts this out 😀 If Nikon doesn’t hit the ball out of the park with their mirrorless Sony won’t be “Oh okay we’ll give you some time to figure it out then”. How would I stay interested in Nikon if their first mirrorless offering is not up to par with their competitors? It would only communicate that they are not able to produce stuff that’s as good as what Sony for example offers.

            • ” How would I stay interested in Nikon if their first mirrorless offering is not up to par with their competitors? ”
              This is exactly what I was answering. It takes a lot of motivation to jump ship. But it takes a little bit of incentive to keep things as they are.

            • Thom Hogan

              Yes, that’s true. Sony is a moving target. But Sony itself is finding that they’re making mistakes. While the A7/A9 gear gets all the love, the A5xx/A6xx and E lenses are mostly MIA. Canon’s now hitting that target, and Nikon may be next, so Sony had better pay attention and have something up their sleeve there.

            • Van

              Thom, if Nikon brings a mirrorless FX camera to market, will existing FX lenses be applicable or will we have to buy new lenses, in particular those with the electromagnetic diaphragm mechanism? The way I look at it, by the time Nikon gets around to a mirrorless to market (probably 2019 in my opinion unless start unprepared like the D850), Sony will have advanced so much from where they are today, and have the fast lenses, Nikon will not bring something new Sony has’t. It could really cripple the company including many finally jumping overboard.

            • Thom Hogan

              Actually, Nikon’s most recent lens advancements (E-type, AF-P) play better into the mirrorless world than the older mechanical activations and optimized for single jump AF-S lenses.

              I’ve been clear, I think, that I believe Nikon has prototyped all four possibilities: DX with new mount, DX with existing mount, FX with new mount, and FX with existing mount. What we get first and how many of those we get is still a little unclear. But simply put, Nikon can’t afford to make existing lenses incompatible. So even new mount cameras would need an existing mount adapter that allows use of all lenses, ala Canon EOS M.

              You are correct about “what does Nikon bring that Sony doesn’t have.” That’s the basic question. I think I know the answer to that, but beyond specific features/performance, the larger bit is simply this: Nikon brings F-mount lenses. 100m of them out there. Nikon has millions of customers who own those lenses and want to keep using them. If they don’t bring that, then it’s not going to be pretty for Nikon. If they do bring that with competent, desirable bodies, they’ll do fine.

            • Van

              With in-body stabilization a lot of the F mount lenses will be less desirable. I wouldn’t need redundant IS. With a lighter body I’d like lighter newer lenses. Cutting customer service and repair does not give comfort and instead show the bean counters not the innovators are in charge. This absence of confidence is not right. And thats why I see Nikon trying to sell you a whole new system. They did it with the Nikon 1. That may fly if video AF tracking was decent but, they have a lot of catch-up and my money is not going to be on them.

            • El Aura

              Do you think any adaptor would support screwdrive AF lenses? And would you personally think it should?

            • Thom Hogan

              You may recall that I started writing about sampling and leaking some time ago. I saw this issue clearly many, many years ago, but apparently Nikon didn’t.

              Now it’s imperative that they stop that sampling and leaking and keep the F-mount owner in the Nikon family.

              You are absolutely correct that Nikon has to keep the Nikon users in the fold, and that it isn’t a particularly high bar to get over. But whatever Nikon does next in mirrorless is a marketing messaging problem bigger than any Nikon has faced before. They are going to need to be clear and consistent in what they say, what the benefits are, how things will be dealt with long term, and that this doesn’t mean they’ll nerf other DSLR updates in the future like they did the D3400 and D5600 (and some say the D7500).

            • Robert Falconer

              “So Nikon is actually forced to make their mirrorless offerings worse than their DSLRs but still good enough to compete with Sony.”

              That’s a false argument, IMHO. Either you’re in, or you’re out. If you don’t cannibalize your own, then your competitors will. Everything else is analysis paralysis.

            • Thom Hogan

              I’m not sure I’d put it that way. Nikon has to make mirrorless differentiated in some way to the DSLRs and the choice the customer makes clear.

              Canon has essentially done that by putting the M line under the Rebels. You can get an “almost Rebel” that’s compatible with the EF-S lenses (via adapter), or you can get a Rebel. The benefit you get in the M line is size, basically. The drawback is that the more you want the size to be smaller (e.g. M100 versus M5) the more features you lose.

              Rumors have it that Nikon will try this same approach (DX-M). The problem I see is that the low DX DSLR line is really soft right now. So they’d be putting something below their soft point. They really needed a D3400 and D5600 that were more than lukewarm updates, and they needed to market that the Nikon consumer DX DSLRs just outshoot and outperform the Rebels in almost every way. They didn’t, and that’s product line management failure on the part of Nikon.

            • ZoetMB

              I don’t think that’s quite right. IMO, Nikon needs to make a mirrorless that their DSLR users believe makes for a great travel camera and/or a great second body. For non-DSLR users, it needs to be a camera that they can relate to and appeals to them and doesn’t look like their father’s SLR. For the segment of the market that hasn’t yet bought Sony, it needs to have the same perceived quality, but be less expensive.

            • Adam Brown

              But dslrs are dead — they just don’t know it yet. Not a question of if, only when.
              Within their own brand, Sony pays lip service to their dslt a-mount still being alive, but for anybody paying attention, it was all but abandoned about 4 years ago.
              Just a matter of time before it happens industry wide. (And ultimately, mirrorless ILC May die in favor of computational photography, etc).

              Anyway— at some point, Canon and Nikon will have to send the “DSLR is dead” signal. Sooner than most people realize (my guess.. 2 more years). They just need to make sure they have a clear path for legacy users to transition.

              (I’m placing the odds at 50/50 whether the next d8___ is a traditional DSLR)

            • Thom Hogan

              And Nikon’s problem at the moment is that most of us would predict that Canon will issue the “DSLR is dead signal” before Nikon is ready to deal with that.

              This is where big companies make big mistakes. Nikon has essentially put themselves in a position where they are RESPONDING to Sony and soon Canon. Their two biggest competitors. And Nikon has allowed themselves to disintegrate into a weaker position just prior to that happening.

            • Adam Brown

              In some ways, Canon already has issued the statement, they just have been subtle about it. Their newest ILC cameras are truly hybrids— they function as dslrs, but they become capable mirrorless cameras in live view with DPAF. I’m surprised Canon doesn’t market this angle more heavily.
              If I was a new buyer deciding between Canon and Nikon…it would be enough to push me over to Canon.

            • Thom Hogan

              Very true on all points.

            • Robert Falconer

              “DSLRs are dead, the D850 was the last one.”

              Well, we’re kinda rapidly headed in that direction anyway, aren’t we?

              I think you can run two equally capable types of camera for a period, the differentiating factor being that some may want the benefits of mirrorless, and some may still prefer a DSLR. But to make one far less capable than the other when your competitors are working full throttle to kill the DSLR anyway, telegraphs tentativeness and uncertainty to me. Either you come out with a proper competitor to the A7III and/or A9 [not an also-ran], or you continue to market the idea that the DSLR is better, and forget about mirrorless. Otherwise, why bother? No one will be interested. This “toe half in the water” approach makes no sense to me.

            • Thom Hogan

              Again, the problem is the D500 and D850, Nikon’s two still “hot” properties, one of which they can’t even deliver to everyone that wants one.

              Were Nikon to launch a DX mirrorless that equaled the D500 and an FX mirrorless that equaled the D850, your choice—run both and let the customer pick—means that you have double the R&D and marketing/sales costs for probably the same volume (or maybe slightly more). We all know what the answer to that is with Nikon’s current management: no way Jose.

              So even if we agreed that the cannibalize your own product idea is the best approach for Nikon, Nikon’s management absolutely wouldn’t agree to that right now. Meaning it won’t happen that way.

              And that’s part of the frenzied debate within Nikon about mirrorless that hasn’t nailed a strategy yet: they want whatever they do in mirrorless to be cumulative (and with the same margins) to DSLRs. That has precipitated designs that try to wedge into spaces not occupied by a DSLR at the moment.

            • Adam Brown

              But all that was part of why the Nikon 1 system failed. It felt like that intentionally handicapped the Nikon 1, just to prevent if from cannibalizing dSLR sales.
              Sony went the opposite way with the NEX — And at first, they did cannibalize their own dSLR sales — Basically killed the A-mount, but left them far more competitive in the long term.

              You’re suggesting Nikon walk a very very very fine line, and I’m not sure it is possible.
              Nikon has to make a really competitive mirrorless camera, that can compete with the Canon M, with the likely coming Canon M full frame, with the Sony A6000 series and the Sony A7 series — yet, NOT compete directly with the D500 and D850.

              My fear for Nikon — that mentality will lead to another 1 series debacle. It will be a camera designed for “phone users.” Of course, it won’t ever be as convenient as a phone, since it is a separate device. So it won’t actually win over too many phone photographers.
              Meanwhile, it won’t be serious enough for “real” photographers, who will increasingly leak to Canon and Sony instead.
              At *some point*, Nikon will have to risk cannibalizing their own dSLR sales. The longer they wait, just the more painful it may become.

            • Thom Hogan

              Well here’s the thing: the window keeps moving while the production cycles stay pretty much the same. Nikon seems to have indicated that this was part of the problem with the DL.

              What do I mean by that? Well, let’s take it pieces.

              Window: right now there’s a window open where a really competent DX mirrorless model could wedge in and compete with Canon M and Sony E. Particularly true if it had an adapter that allowed full use of F-mount lenses.

              The longer you wait to launch in that window, the more things change. Canon will have a fourth M model soon, and more M lenses. Sony will probably have an A5xxx and maybe a new A6xxx model in 2018. Difficult to know if more E lenses are coming, but I’d guess not at the moment.

              So the window is open for a DX mirrorless that launches in early 2018 with a half dozen lenses. Not so open for a DX mirrorless that launches at the end of the year. Potentially closed completely at some point in the future, say 2019 or 2020.

              Cycle: Probably the best case for a “from-scratch” camera is 12 months from start of real development to launch. More likely 18-24 months. And with the sensor issue I wrote about on my site today, cycles are lengthening for a lot of folk, including even Sony.

              So, what you can’t do is look at today, see the window is open, and start a new development process for a new camera. By the time it would be ready, the window might be closed. You have to be thinking two or more years in advance and being good at seeing how the market is shifting out that far, or else your development starts to lag reality.

              Like the DLs. We still don’t know the full story, but note that if Nikon were finally shipping DLs, they’d be doing so as Canon shifts from 1″ to APS-C for similar cameras. In other words, Nikon would have been launching into the back of the window. And that would have implications on pricing and margin.

              Full frame is a different story, and a weird one. We have two competitors, Canon and Nikon with some really good offerings in full frame DSLR, and one, Sony, with some really good offerings in full frame mirrorless.

              The problem for both Canon and Nikon is the same: Sony’s success (mostly A7R) is against the most successful DSLRs (5D and D8xx). Yes, the A9 is against the 1Dx and D5, but that’s a smaller problem, though part of the overall problem.

              Basically, Sony attacked high. This means that there are two possibilities: Canon and Nikon attack low (consumer full frame) or immediately go against their own best DSLR offerings without a lens set to do so.

              And there’s this: where is everyone going to be for the 2020 Tokyo Olympics? Which is basically two years out, the time period I say you have to be really good at predicting. Sony seems easy to predict in the PJ/sports world: A9II, exotic telephotos. And Canon will be 1Dx Mark III with a hybrid approach (dual pixel lets them be DSLR or mirrorless, if they can figure out the viewfinder). Nikon? Nikon? Bueller?

              Again, I’m a risk taker. If I were running Nikon, the D6 would be 100% mirrorless. Absolutely everything I could throw in technology-wise. And still F-mount. But Nikon needs full frame mirrorless before that, and that’s where things get really debatable. And indeed, heated debates went on within Nikon and I think are still raging.

            • Allan

              Along with your previous comments, this comment helps me understand the issues Nikon faces with producing DX and FX mirrorless cameras.

              Thanks, Thom.

            • Adam Brown

              Interesting analysis. Sony is doing something a bit different and odd — they are ONLY attacking from the TOP. They are allowing the lower end to be filled out by older products dropping down the ladder.

              It really opens the question of what they are going to do next in APS-C. The A6000, their “entry level” is almost 4 years old. It’s definitely “due” for an upgrade. But it shares so much tech, body and features with the A6300 and A6500… how do you replace it without basically infringing on the higher models?
              For Canon and Nikon… cheaper cameras are basically cheaper bodies, slower frame rates….. For Sony, all the A6000 cameras have the same body basically, same type of frame rate.
              I suspect they will just keep climbing the ladder in the A6____ series. In 2018, you will see a A6700…. The A6000 will basically replace the A5100 as the bargain model. The A6300 will become the entry-level — it will see a price drop to $600. The A6500 will get a price drop to $999. And there will be a new premium A6700…… Maybe an APS-C A9 for $1600.

              In full frame.. yes, they have attacked at the high end. But they still have products for the low end. You can pick up an original A7 for $1000. The A7ii is a very reasonable $1600 now — When the A7iii comes out, expect the A7ii to drop to $1400ish.

              So let’s say Canon and Nikon attack consumer full frame low — Expect their Sony competition will be a $1400ish A7ii. They need to be able to get pretty close to that level of quality and price. Close, not exact. If they use their native mounts or at least really good compatibility with their native mounts, then they can leverage the lens loyalty into charging a bit more for a slightly less capable body.

              But if Nikon thinks they can launch an A7 (original version) quality mirrorless and charge $1500 for it…. then they are really in trouble. Especially if it isn’t fully F-mount compatible.

              I left Canon out of this hypothetical.. because I already know they can surpass the original A7 quality. If they take their 6dii, rip out the mirror and stick in an EVF, then they are already hitting the A7ii quality, more or less.

            • jmb2560

              In other words: damned if they do, damned if they don’t. What about a more radical move: the “OS X scenario” with a new mount, new lenses, new UI, etc. with very minimum compatibility? It’s risky but based on your comment, there isn’t much space for a soft approach.

            • Robert Falconer

              “…there isn’t much space for a soft approach.”

              That’s how I see it, too. Releasing a mirrorless camera that everyone in the world can see doesn’t really compete with the Sony A7III / A9 series cameras will only do Nikon more harm than good, particularly when their reputation has already been suffering.

              As to DSLR vs mirrorless, I think it’s pretty straightfoward for Nikon—you offer both for the time being, but you DO NOT hobble one in favor of the other. Savvy buyers aren’t going to like that. Instead, you begin to reduce your DSLR lineup while ramping up mirrorless with serious offerings. This concern about “telegraphing that the DSLR is dead” or cutting into DSLR sales (or D850 sales)…? Well, if more people suddenly start buying Nikon’s A9 or A7III competitor over the D850, then Nikon has learned something, haven’t they? Time to more rapidly transition to mirrorless and begin phasing out the DSLR. On the other hand, if the DSLR continues to sell well, then you continue to offer it, since at the moment, there seems to remain a strong appetite for both.

              Without offering both — for as long as both are wanted — Nikon are only shooting themselves in the foot.

            • Thom Hogan

              There’s a difference between what I’d do if I ran Nikon and what Nikon will do under any form of management that they’re likely to have in the near term (e.g. even replacing some top current management).

              I’m a risk taker. I try to figure out where things will be in a few years and get there with the most before others get there. My entire Silicon Valley career was predicated on that, and if I had a fault, it was that I was seeing well a little too far out in the future.

              Nikon is not a risk taker. Even if you could convince them that the five years in the future that X is what you need to produce, they won’t be the first ones there. About the only exception to that we’ve seen is the D1.

            • jmb2560

              well… I’m CEO of a company based in SJ developing battery technologies. We continuously look 10 to 20 years ahead and quite honestly, I don’t know what I would do if I was running Nikon KK today. I know what I would have done 5 to 7 years ago: Use a DX sensor on Nikon 1, and then leapfrog it to create a full frame. Nikon had all technologies in they hands to create it. For obscure reasons, it didn’t happen and the then-execs funded the CX format. I never got it.
              Now we are left with an impossible equation: innovate in a market with strong(er?) competitors, having deeper pockets when it comes to MarCom. Good news, there is strong community and a great brand equity. Will that be enough to capture new market shares? I am more and more concerned about the future of this company. The next couple of years are probably ok. Post 2020, I’m not sure.

            • Thom Hogan

              I saw the resistance towards “what next” at Nikon back in 2010 when I engaged with a dozen of their executives in Tokyo. There was much disagreement among them, but most of what they “saw” was technology, not customer problem solving.

              And that’s been my point for a long time: it’s reasonably easy to go sleuthing through the emerging technologies and finding interesting ones that might allow you to make a “different” product. But you have to understand your customer and the problems they have or else you simply are doing engineering projects and not customer products.

              The DSLR companies ignored for a long time the customer problem of “too heavy hanging around my neck,” for instance. What they did was make lesser products (e.g. compacts) that ran right into technology they should have seen coming (e.g. smartphones). All the camera companies are still in denial about Internet sharing of images, and even though some, like Nikon, have a cloud photo storage program that can share, they have no idea how to market that, and it still is kludgey.

              I actually think the original Nikon 1 was fine except for a few things: the CX mount had to be ready for larger sensors later, the price was wrong, it wasn’t compatible with other Nikon gear, no road map was ever revealed about how the system would become complete.

            • Robert Falconer

              And I’ll add that all of those issues need to be resolved by an upper management culture that hasn’t exactly inspired product or customer service confidence in the eyes of their target audience in recent years. Still rooting for them, though.

  • ZoetMB

    That article makes no sense. Nikon Imaging had earnings of ¥27.7 billion in fiscal 2017 and they just predicted ¥25 billion for this fiscal, down from a previous projection of ¥27 billion. The division had ¥383 billion in revenue last fiscal and they’re projecting ¥355 this fiscal, up from a previous projection of ¥345 billion, but still 7.3% below last fiscal. They sold 3.1 million DSLR’s last fiscal and they’re projecting just 2.6 million this fiscal, up from the previous projection of 2.5 million. So where’s the growth? There isn’t any. They’re projecting sales of half a million fewer DSLRs even with the D850. Unless it’s a purposely false projection which they can easily beat because of the D850. But I doubt it.

    And as I’ve posted before, if Nikon’s projections are accurate, they clearly indicate that no mirrorless will be released this fiscal year. So April at the very earliest.

    • Nakayamahanzaemon

      Your comment doesn’t make any sense. Nikon Imaging earnings for the fiscal year ended March 2017 isn’t 27.7 billion yen.

      • ZoetMB
        • Nakayamahanzaemon

          It wasn’t. Look at the latest number. Calculate it. It’s 46% growth.

          • ZoetMB

            The 17.1 includes the restructuring costs. It’s 28.1 without it. Why they’re now claiming that last fiscal was 28.1 and not what they originally reported of 27.7, I don’t know.

            Their projection for this fiscal for Imaging is 25b¥ with the restructuring cost and 31 without it.

            So fine, by restating the number to a lower number it makes it look like a bigger increase. But they’re still selling a half a million fewer DSLRs and 720,000 fewer lenses than they did last fiscal, according to their own projections and without restructuring costs, it’s a 10.32% earnings increase, not 46%.

            • Nakayamahanzaemon

              Nikon changed the accounting standard to the IFRS from this year. Keep in mind that it’s not because Nikon wants to cook the books.

              Nikon started to change it from this year in 2014. They officially decided it last year.

    • Michiel953

      I envy your insight.

  • Allan


    Thanks for posting this topic. And thanks to all the excellent contributions.

    Nikon, don’t f__k it up. 🙂

    • very welcome 🙂

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