where there’s smoke there’s fire

“Maybe Nikon won’t exit the camera market” is by RC Jenkins:

There has been lots of talk lately on “market share.”  Part of this is due to the recent article that identified Nikon has having 7.5% mirrorless market share in Japan, likely written by some journalist.  Journalists are interesting in how uninteresting they are.  They are usually masters in no particular field, except how to get people to read their articles and talk about them.

But the talk is on the internet, by the internet, which as I understand it is composed of an exclusive panel of formally educated world-renowned experts in all subjects.  So somewhere out there, someone read that “the Canon M50 has 95% market share of APS-C mirrorless cameras where the model ends in 50”.  And because they are an expert, they were able to validly extrapolate that “Canon has 95% camera market share!”  And then everyone believes this, because this expert on the internet told them what to think, since the underlying facts are always obviously just noise.  So here is a bit more internet to read, while you’re listening to Youtube videos play in 4K a few tabs over.

First, let’s talk relevant history during the era of Digital ILCs so far.  What happened?  Easy, peasy, McDeluxe:

• ~2000, we started seeing the first DSLRs.  They were expensive.  $thousands.
• ~2005, we started seeing cheap DSLRs.  And social media became popular.
• ~2010, smartphones & social media were popular, but phones had poor cameras.  Entry-level DSLRs surged, swelling the market.  And we started seeing mirrorless cameras.  Everyone thought they were a pro or wedding photographer because they had a DSLR.
• ~2015, phones had good cameras.  And the entry market started to realize that an ILC has this thing called a “lens” that needs to be pretty big in order to see a difference in image quality on instagram. And phones faked it; and logically, they maked it.
• ~2020, entry level ILCs had plummeted, and the higher-levels shifted from DSLR to mirrorless.  (Also, social media shifted from stills to video).  Dedicated ILCs are now for serious photographers & videographers, no longer for the general public.  Those D3500s collecting dust in everyone’s closets are S.O.L. because they don’t have a dust-off feature.  But they don’t need it anyway because phones.

I’m ignoring compacts.  Nobody really cares about compacts, but they somehow really confuse a lot of people because they show up in market share numbers.  Market?  CIPA time! (Note: from 2008-2011, CIPA probably called DSLR + Mirrorless = “DSLR”)

So:

• DSLRs rose rapidly from 2000-2010.  At the same time, the average value plummeted.
  This means “huge volumes of cheap DSLRs were sold.”  The general public was buying them, because everyone was a Rebel; and plus, Ashton Kutcher told them to.
• DSLR units declined rapidly from 2010-2020, while their average unit value stayed the same, at this depressed level (meaning heavily influenced by cheap high-volume DSLRs).  This ratio is interesting.  This means that the market was so saturated with cheap DSLRs that the enthusiast & pro was too tiny to make a dent in the numbers (see average value), or that DSLR users stopped buying DSLRs at the same proportion, regardless of level.  Probably a bit of both.
• Mirrorless units have stayed pretty steady from 2010-2020.  (No, mirrorless camera sales have not been rising).  But their average value has risen dramatically, and their proportion of sales has risen because DSLR sales have dropped.  So the same number of mirrorless cameras are being sold every year; and the cheap ones are making room for the higher-level ones.
• When these last 2 bullet points are merged, this likely means that entry level users are leaving the market altogether; and at the same time, higher-end DSLR users are leaving DSLRs & switching from DSLR to mirrorless.  This wasn’t just a recent thing (Sony), though it accelerated a bit when Nikon & Canon entered full-frame mirrorless.

Duh.  So…?

• It’s now a ~50/50 split on mirrorless vs. DSLR.  But DSLR is trending as going away; and mirrorless units are trending as remaining relatively steady.
• Mid & high-end mirrorless is where it’s at.  Same units as DSLR, but much more average unit value (and rising).
• We’re closer to the “bottom” sustainable level of the market.  There’s still some room to fall (eg. DSLR disappearance, which won’t all translate to more mirrorless; and entry-level mirrorless), but the major stuff appears done.  Volumes are pretty low and average values are increasing.  I think the average mirrorless value will be a great indicator of when the market bottoms out.  When it’s flat, the market will probably be stable.

And sooo that’s the market.  What would a company within this market do?  A company like Nikon?

• Focus on the mid- & high-end mirrorless market
• DSLRs are done.  Sorry, they just are.  They are the film cameras of digital cameras.
• Don’t expect much in terms of the entry-level. Maybe 1 camera every few years, if that, and not many lenses.  We already have a Z50.  I could see a higher-end DX mirrorless (a mirrorless D500) before a lower-end, unless Nikon wants to deliver one last uppercut to the entry market, like they tried with the Z5.  But this would be a temporary surge at best, that might not be worth it.
• Nikon’s ILC market share will be interesting to watch.  A few reasons:

1. Nikon is 1 of only 2 major vendors who still sells DSLRs, and who still has a significant number of DSLR users.
2. Canon, Sony, Fuji, Panasonic, & Olympus entry-level customers have been slowing down in buying entry-level mirrorless cameras.
3. Market share is only part of the story, and historical market share in a declining market doesn’t actually tell anything about the health of the sustainable business. Whoops, this is a reason Nikon’s ILC market share will not be interesting to watch. Moving on…

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