Canon Joins Canaries in Coal Mine

For the first time recently, Canon reported financial results that indicate a stronger weakness in their camera business. Year to year, the third quarter was down 15.6% in sales, and 45.3% in profit. 

More ominous: "temporarily curtailed shipments due to a pause in entry-class DSLR purchasing." 

Whereas the first two quarters of the year were relatively flat (0.07m ILC unit difference year to year, or -3% change), the third quarter suddenly dropped in a big way (0.25 ILC unit difference in one quarter, or 019% change). Overall, Canon's projections now show ILC's dropping 8% for the year and their market share dropping a couple of points (by my calculations, to 45%, which means that Canon is losing about 5% market share this year to the competition; Canon says they'll only lose 1%, but they've also used overall unit volume for the year than the CIPA numbers are indicating). 

While the EOS R should do well, remember it's at a higher price point where volume isn't nearly as high. It's the lower end products that are giving Canon fits right now, much like the problem Nikon went through recently. It's no surprise that the EOS M models are on deep sale right now.

Meanwhile, compact cameras continue to crater with a full year drop of -26% anticipated.

Much more worrisome is that Canon's camera inventory went from a 49-day supply earlier this year to a 69-day supply during the quarter. This implies some sales coming soon.

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