Photography Has Become Bipolar

I’m amused by the bipolar nature that’s becoming more and more clear on the Internet regarding cameras. It seems there are two schools of thought:

  1. Bring on the iteration and innovation. This is mostly eptimized in the mirrorless world, witness Sony pushing the A6500 with so many technical advances over the recently introduced A6300, and most Sony fanatics rejoicing with each new push (though a few are wondering why the A6500 came so soon after the A6300 at such a higher price).
  2. Stop the merry-go-round I want to get off. This is often voiced with the “it’s good enough” and “I don’t need a new camera with more features I’ll never use” complaints, and made real by the Last Camera Syndrome folk. A lot of those people are higher end DSLR owners who just aren’t seeing what any new fangled tech or spec would provoke them as a useful incentive to upgrade.

But let’s be honest. Both ideas, pursued to the extreme, are problematic. 

While I like that Sony is pushing technology rapidly forward, they’re doing so at a pace that becomes expensive for anyone wanting to stay even close to where Sony is at today. With the exception of 2015, someone shooting at the A6xxx level of mirrorless would have had their camera obsoleted every year since 2010 (NEX-5, NEX-5N, NEX-5R, NEX-5T, A6000, A6300) and now twice in the same year with the A6500. Some of those iterations were more minor, but many were meaningful differences, and the pace of meaningful differences has picked up. 

This encourages purchase of new bodies, of course, but that also means that people are putting their available money more into bodies than lenses. Or more into bodies than into training, photographic travel, or accessories, etc. That doesn’t necessarily move a person’s photography forward all that much. What it does move forward is their bragging rights (“heh heh, I’ve got more pixels than you have”).

Meanwhile, the other extreme tends to get voiced most often by the long-established DSLR buyers. We’ve also had nine DSLR iterations at the bottom of Nikon’s lineup in 11 years, which is a lot. But the last few have been very mediocre changes, and it’s still very normal to see people using one of the earlier models. At the top of the line, we’ve had five major generations of pro body in 15 years, and in the last several, a mid-term refresh as well. So again, a lot of changes. Yet you’ll still find a lot of pros are a generation or two behind. At US$6000 it takes a dramatic change to get an upgrade purchase out of a customer.

I’ve written about Leakers, Samplers, and Last Camera Syndrome folk before, but the pace is faster now at one end (Leakers and Samplers) and slower at the other (Last Camera Syndrome). 

It’s illustrative to note that the companies pursuing rapid technological advances—Fujifilm, Olympus, Sony—tend to be the ones that have made their bets on mirrorless. They need mirrorless to catch up to and exceed DSLR capabilities if they really want to make inroads into the Canikon ILC market share. Don’t expect these companies to stop iterating rapidly or stop pushing upscale. They covet the huge volumes Canikon have in DSLRs and the high DSLR prices, and will stop at nothing to try to get them.

Meanwhile, Canikon have long-established iteration cycles with more modest advances per cycle. They need DSLRs to stay viable above and beyond mirrorless to prolong their dominance in the market. They also need to iterate regularly to have any change to replace some of those older DSLRs in customers’ closets.

All the camera companies have excess inventory of previous generation product—though the 2016 earthquake did change that for a number of ILC products—Canon and Nikon (and now Sony) have made this into a strategy, whereby they end up with more pricing levels as they slot older products between newer products (e.g. D3400, D5200, D5300, D5500). For Nikon, that strategy got shook, literally, when the Kumamoto quake damaged a critical Sony sensor factory. That factory didn’t return to full production for three to four months.

So now Nikon is in the following situation: the D3300 remains in the lineup, but they weren't really been making them due to sensor shortage. The D3400 was introduced, but, it, too, was only in modest supply due to sensor shortages, though it received the bulk of the 24mp sensor input from the factory. 

Say what you will, but camera buyers are price sensitive, and it shows in the data when you look at it closely. Having so many price points between US$500 and US$1000 allows Canikon to pick up marginal sales, plus upsell or downsell as necessary to make the sale. 

But I expect this, too, to change as volumes continue to decline in the camera market. I expect to see longer product cycles start to show up soon. No one still has the volume to make so many significant advances every year. That’s a lot of R&D expense with declining payback. Better to do longer cycles, move product upscale, and pick up the R&D expense with lower volume at higher price over a longer time. 

Olympus is a good example of the problem. Here’s their annual volumes for their m4/3 bodies since 2012 (with the 2017 fiscal year prediction from Olympus): 590k, 510k, 500k, 510k, 550k, 460k. All that product iteration they’ve done—nine new models since the 590k number—isn’t moving the volume marker for them. They have moved the average selling price up by emphasizing the OM-D models over the Pen models, and additionally moving the price of the top OM-D model upwards. Still, quite a bit of R&D effort to paddle in place.  

Thing is, we camera users should be benefiting more from the camera company’s problems. Price should be going down as demand drops, or we should be getting far better gear with some serious use advances. We’re not exactly getting either, though we’re closer to getting the latter than the former. 

Funny thing is, every MBA program teaches a microeconomic model of supply and demand, where in a competitive market there will eventually be equilibrium in supply and demand at a normalized price. The camera market seems to defy that assertion in pretty much every respect. But as many economists have begun to note, the rationality of a market isn’t always as expected, nor are markets particularly efficient and predictable via equations. 

And so I don’t foresee any difference in what’s happening in the camera market as we move from 2016 to 2017. We’re going to see camera sales continue to decline overall, we’re going to see camera makers continue to try to push price-per-camera up. Canon and Nikon are defending, Fujifilm, Olympus, Panasonic, and Sony are on offense. (Pentax still seems to be suiting up ;~).

 

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