The Missing D300s Replacement, Redux

(commentary)

Comments I made concerning the D7200 introduction—that I felt that the D7200 specifications left open room for a D300s replacement—continue to get a fair amount of comment and questioning. Rather than answer each of your emails individually, I’ll just try to collect my thoughts in one place (here) and point to that.

First, I believe I’ve been consistent all along: there will be a D300s replacement. I’ll be the first one to admit that it’s been truly depressing that we’re now four years past when one would be expected and nothing is in sight. So let’s start with that.

The D300 was a seminal camera. Much like the N90s and F100, actually. The D300 was most of the high-end pro camera (D3) carefully pruned down into something that fit a consumer’s or constrained pro’s budget. It gave up as little as possible from its bigger brother. 

Nikon sold a ton of D300 bodies. Not many D300s bodies, though, as that update was way too modest and didn’t address the primary thing people wanted updated: the sensor. The consumer DX bodies of the time were starting to out-perform the D300s, and easily surpassed it in the ensuing years, making the D300s an oddity: superb body build and features, but with poorer than state-of-the-art imaging capabilities. 

To some degree that’s part of the problem. The Nikon/Sony sensor push at the turn of the decade was mostly about pixel count and dynamic range. When you push pixel count up, the speed at which data offloads from the sensor to the digital electronics in the camera becomes critical, and that wasn’t being addressed. The D300s replacement would need far faster sensor offload than we saw in the original 24mp sensors. Even in the current D7200, for example, I’m pretty sure that the speed constraints that limit fps are the sensor itself, not the other electronics (e.g. EXPEED4). 

Meanwhile, Nikon was also embarking on a big FX push (began in 2012 and still one of their primary product tactics). It’s unclear whether Nikon saw the DSLR decline coming, but I’d say that given Nikon’s overproduction of consumer DX cameras during that period, that wasn’t the case. What was more likely the case is that they wanted to lift their average sales price per unit while also lifting units sold. The DX overproduction was the “lifting units sold” component, while the FX emphasis was the “lifting average sales price” component. Had both things been successful, Nikon would have looked like a growth company the past two years. Indeed, right up to the point where their channel stuffing became obvious and declines in DSLR sales began worldwide, I believe that shareholders/investors thought just that: Nikon was a growth company. 

I characterized this as pressing the foot on the accelerator at the end of a straightaway knowing that there was a hairpin turn at the end. At the moment, we still don’t know if Nikon will hit the wall at the end of the straightaway or managed to get the vehicle back under control and pointed the right direction. A D300s replacement would be an indicator of the latter. 

Personally, I’m starting to wonder if we’re going to just fall back to the end-of-the-film-era numbers in terms of overall camera shipments. That would be about 4m SLR units a year (in 2014, DSLRs and mirrorless were about 13.7m units). Other analysts I talk to think that 6-9m is a reasonable number to expect as a “bottom.” If any of us are even close to right, that implies further contraction in the ILC market.

Nikon managed to live and mostly prosper—though not without issues—in the very weak late 80’s and 90’s film camera market. And that brings me back to the D300s replacement. It wasn’t low-end film SLRs that helped Nikon through that time. It was the N80, F100, F5 combo that did (and N90s and F4 before that). In today’s models, that would be a D7200, D610 to D810, and D4s. In what should be in stores at the end of this year, that would be D7200, D400 to D810, and D5. 

First and foremost, Nikon’s biggest competitor is Canon. Canon has those models today pretty much up to date (760D, 7DII to 5Ds, 1Dx, with the 5DIII/1Dx due for their updates late this year). For Nikon to try to stay competitive with Canon without a D300s replacement is unthinkable. Indeed, I would characterize it as one of the biggest product line mistakes I’ve ever seen should Nikon just punt on a D300s replacement. It would be a bit like Toyota deciding they didn’t need a Camry because the Corolla is enough. 

A lot of folk have postulated that the FX proliferation (D800, D800E, D600, D610, Df, D750, D810, in that order) was an attempt to move the D300 user to a different base (a bit like Toyota upselling the Camry user to a Lexus). While there is certainly an aspect of that at work (sell what you’ve got and upsell current users whenever you can), I think that’s like trying to describe brown paint as orange. To me, Nikon’s CX and FX moves were diversification/growth strategies, not migration strategies. Indeed, I think that what happened is that Nikon thought they were diversifying and growing, but instead what they mostly managed was to migrate some of their users to more expensive cameras while losing other users to other brands. 

I’ll go further. Nikon made the mistake—not for the first time—of trying to become a consumer electronics company, as opposed to an optics-oriented company with mostly professional caliber products. They weren’t alone in this. Virtually every Japanese camera group made the same sprint when digital eroded film and showed more overall sales potential. 

The problem—as D300 aficionados will be the first to claim—is that if you want to pursue consumer markets for growth, you shouldn’t neglect the base that made your brand reputation in doing so. A D750 is not a D300s replacement ;~). A D750 is Nikon’s third attempt at a consumer-oriented FX body for mass production and sales. A D810 is not a D300s replacement, though some of us have forced it into that role. A D7200 isn’t a D300s replacement, though barely a substitute in a pinch.

One huge problem for Nikon is that digital cameras, and in particular, sensors, are a moving target. What would have sufficed for a D400 in 2011 doesn’t apply today. Moreover, sensors tend to predate a camera by about two years, sometimes more. By that I mean that if I had a new sensor technology just heading to its first test fab today, I wouldn’t have it perfected and available in mass quantities for about 24 months. The sensor design locks long before the camera design goes into production. 

Thus, if Nikon were to announce this fall a D500 (DX) and D5 (FX) combo ala the D300/D3 announcement, we’d be getting sensor tech from 2013 or so. That implies current Sony state-of-the-art in dynamic range/pixels, but with increased sensor offload speeds. Doable. 

Funny thing is, after briefly handling and using the Canon 7DII recently, I think that Nikon has more than sensor tech to improve. I’d say that the 7DII body is slightly more like the 1Dx body than the D810 body is like the D4s body in terms of quality of build. Nikon has a really tough target to match if they’re going to get back in the game of a top-end crop sensor body. 

Personally, here’s the target I would have tried to hit with a D300s replacement in 2015 (again, I’d have had to make these decisions in 2013):

  • 16-18mp DX sensor. While some think that megapixels are the most important attribute, I don’t, not for this product. The most important attribute is performance in low light at speed. I’ll take fewer pixels with better character.
  • 10 fps mechanical, 20 fps+ electronic. Flapping the mirror, I’m okay with limiting performance to 10 fps. But much as Nikon discovered with the Nikon 1 bodies, if you’ve got fast sensor offload performance and an electronic shutter ability, use it. There are enough situations where the 60 fps of the V3 are useful, even though exposure and focus are locked. 
  • 4K video. As much as I don’t like video as an add-on in DSLRs, it’s now required. So if you’re going to do it, keep it at the forefront, not the rear guard. Given that we have a sensor that can move data off it fast (requirement of the category), I’d also think that 1080P/120 would be a goal, too.
  • Swivel, touch sensitive LCD. This is a top end product. It shouldn’t be cutting corners on the display to make price point while leaving those features on lower end models. 
  • Full weatherproof and tough build. The D810 isn’t weatherproof or robust enough, frankly. I’m tired of LCDs that mist up in humidity, tons of holes and access points through which water and dust can ingress, and controls that break off at inopportune times because they’re not particularly robust. Nikon needs to toughen up. Even the D4s. 
  • Tighten the parameters. First some easy ones: smaller where possible, lighter where it doesn’t compromise anything. But frankly, the more important ones are the tolerance aspects. Nikon is still shimming focus screens, sensors, and more, to get things aligned in manufacturing. This then causes downstream problems. Tighten QA, too.
  • Better communications. USB3 and 802.11ac probably. Both require better software to take advantage of them, which is exactly where Nikon is not like Apple but needs to be. 

Will Nikon give us a D300s replacement? When would they give it to us? What will it be like? My predictions are yes, fall 2015, and not as good as what I just described. 

Here’s another thing that comes into play: I don’t think that the remaining customers for DSLRs are entirely price sensitive. Sure, they are at the D3300/D5500 level, and Nikon needs to do more to make that work for them. But those DSLRs are likely to be eclipsed by mirrorless at some point, anyway. At the D7200 and up level, and especially at the pro body type we’re talking about with a D300s replacement, the customer is far less price sensitive than they are feature sensitive. If the options are (1) what I described above at US$2199 versus (2) the current 24mp sensor doing 10 fps in basically a D810 type body without the other things I described at US$1799, I’ll bet #1 would outsell #2.

We’re looking at a glass half full, half empty type of situation. Nikon would probably think they’ve been successful in filling half the glass (FX is doing okay, and they’re still selling DX DSLRs and making a profit). I’d say they’ve failed to fill more than half the glass (the pro gear right now is decidedly awkward, the DX DSLRs are arbitrarily defined and the channel is overstuffed with them, the Nikon 1 has been a random walk through design ideas with no one polishing anything, etc.). 

A D300s replacement will tell us whether the glass will continue to be half full, or is still half empty ;~). But boy is it coming late to market. Really late. Harvard Business School Case Study late. 

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