(commentary)
If you've been paying any attention, Nikon's pattern for releases has been February/April, and July/August/September. With all but the D300s and D3x in Nikon's current camera lineup having been refreshed and the known weakness in shipments Nikon experienced towards the end of their last fiscal year, we're left with a lot of questions:
- What will they release in 2013? The D4x is the only camera that's even been hinted at. The D400 and D4x are the only two logical candidates. A D3300, given the speed at which the low end has incremented (almost yearly) is a possibility, but what would it even be given that we're already at 24mp? It's difficult to imagine Nikon expanding either the DX or FX line, so we're not left with many choices.
- Will there be an April release? We've had them in four of the last nine years; we've also had lens announcements in four of the last five years. So I'll say yes, something will be announced. Especially given Nikon's release-of-the-month club marketing as of late (J2, D600, V2, D5200, Christmas, S1/J3, D7100, A).
- What will the last Fiscal Year results turn out to be? We won't know until May 9th whether Nikon continued to experience a bit of a year-end slump in sales or whether those last minute announcements and sales managed to push the volume up just enough to meet their revised numbers.
The problem is simple: just emptying the warehouse of inventory isn't going to make Nikon's current fiscal year numbers look very good. Economies haven't rebounded, dealers still have plenty of hang-over inventory from Christmas and the first quarter release rush, and a lot of Nikon's inventory is still models from earlier generations (currently D90, D3100, D5100, D7000, D300s, D3x). D4 and D800 sales can't be going up at this point, they're likely in a slow drift down.
As I've written before: we're reaching the end of the straightaway and we still haven't seen Nikon brake, turn, or otherwise react. At the moment, Nikon is still only one week into their new fiscal year, and probably busy studying what happened in the last six months of last year pretty carefully. One would think that a D600, D5200, D7100 blitz would have bolstered unit volume in the interchangeable lens cameras, especially given the Nikon 1 refresh. The feeling I get is that it hasn't, and the Nikon 1 went from soft to softer, too (I'm not sure Nikon has hit one million Nikon 1 sales yet).
Which brings me back to "what can Nikon introduce that will change things in 2013?" A D4x won't move the meter enough to notice. While some of us will welcome it (so we're back to a performance/studio combo at the high end), such a model is never going to sell more than 5000 units a month over any long period.
A D3300 just makes the built inventory problem worse. Such a model would mean Nikon would take a bath on the existing D3100 and D3200 models sitting around waiting for buyers. So that doesn't help much.
Yes, you know where I'm headed: there's only one known possible model that can pick up some sales (though it would do so partly at the expense of the just-released D7100, which is why I don't think what I'm about to write is the late April, early May release, but more likely a late summer release). Yep, you guessed it, the missing the D300s replacement. I promised I'd get around to writing what I think that model will be, and I will, but not quite yet. Right now I want to talk about product lineup in general.
- Low-end Coolpix — Can't be very profitable, if at all, and the inventory glut for low-end compact models is killing everyone. Smartphones won this war. Time to retreat and put up just a few good defensive positions.
- High-end Coolpix — The P330 and the A were late, as far as I'm concerned. Thus the benefit to Nikon will be less overall. We should be deep into iteration here to protect those cameras against other comers, but we're basically at generation one for the A, and the P330 hasn't moved the bar very far in its third iteration.
- CX (Nikon 1) — Oh dear, the J2 was a complete dud, and the J3 and S1 misfired as well. Indeed, why the P3xx isn't a fixed lens S1 I don't know (i.e. move the 1" sensor down to high-end Coolpix, Nikon! We don't need two entry mirrorless models). The V2 has just repeated the "too expensive" sin of the V1. Examining sales numbers, I'm not seeing forward movement by Nikon here. The only forward movement they got was from heavy discounting. What amuses me is that Nikon can't even come up with clever marketing to hide the discounting.
- DX — Things are getting a little softer, and this is the really scary part, as this is the heart of the volume/profit combo for Nikon. That we still had D3000's coming out of the Nikon warehouse in December, and we still have D90's coming out today indicates that Nikon is either overbuilding to demand, or demand is weakening. Maybe it's a bit of both. Fortunately for Nikon, Canon is floundering here, too, as they seem to just release the same 18mp camera over and over again in different bodies. The lack of imagination and product management acumen in the crop sensor DSLR realm is getting mind-boggling to me.
- FX — Things are pretty much okay here. The D600 is a little soft, partly because Nikon has botched the whole dust/oil controversy, but overall Nikon put three FX DSLRs into the market last year that hold their own for the market. My guess is that they're mostly happy with the FX sales (note to Nikon: you'd be ecstatic with the FX sales if you hadn't botched the D800 focus issues and the D600 dust/oil issues; high end customers expect high-end quality and support and you haven't delivered).
The way I see it, besides addressing all the issues that come up in those five product markets for them, Nikon has several potential outs that we need to consider:
- Get in bed with a phone maker. I actually suggested this to them several years ago. The only way Nikon can really play in the phone market is to go the "Nikon Inside" route. In other words, become the camera contributor to future phones. Of course, we can probably cross Samsung and Sony phones off the list of potential targets. And Apple, too, as Apple is almost certain to go it alone. Which doesn't leave us a lot of candidates: Blackberry, Google, HTC, Nokia basically. Still, it's a possible play, and I expect them to eventually realize they have to make it. Whether that produces profits for them or not is another matter, but if you're mostly a camera maker, you need to have a presence in as much of the camera market as possible, and the biggest chunk of that is now smartphones.
- Book a return trip to Hollywood. There was a day when Nikkor lenses sat in front of many, maybe even most, cameras shooting feature films. Not so much any more. With Canon doing dedicated DSLR-like video cameras, RED doing the same, and Sony trying to leverage the E-mount, Nikon is mostly missing in action in both Hollywood and high-end video production now. Yet, go to any trade show where Nikon has a booth, and you'll see lots of video demonstrations. Uncompressed HDMI ain't going to cut it. You need that and a lot more, including lenses that can be focus pulled, lenses that have power aperture control, cameras that have XLR inputs and 4K video capabilities, and a lot more. Did I mention "a lot more"? All those demonstrations are mostly sponsored stuff. The folk that are paying their own money to build a video producing company are buying other gear. It's put up or shut up time (and the National Association of Broadcasters convention is this coming week, probably the most important one for video gear, so we'll have a good idea whether Nikon is putting up or shutting up for another year by the end of the week).
- Join the mirrorless crowd in search of customers. Wait, Nikon is already there with the Nikon 1. Right, but that ain't getting them any traction. A 1" sensor isn't going to win against m4/3 or APS sensors short of being lower cost, and that doesn't seem to be happening. No, I'm referring to the DX-rewrite. Basically put phase detect on the sensor and restart DX from the bottom (something akin to what Canon tried with the EOS M, but has failed miserably at so far). Of course, that means more lenses, another product lineup to market (when four already seem to be proving to be too much), along with the possibility of making both existing CX and DX grow weaker.
- Disrupt the camera marketplace. I've been quite vocal on how I'd do that for the past seven years (communicating, programmable, modular). A three-layer, non-Bayer sensor that had low noise at high ISO might disrupt, too. There are definitely things you can do to try disruption, but let me just state right up front that Android-based compact cameras are not "it."
My belief is that Nikon has to do both things (clean up their existing product lineup while marketing it better, and finding a new outlet or two for additional products). But the game has already started: we're in the new fiscal year. Just playing the same game as before will almost certainly trigger a slide in sales and profits for Nikon. Of course, as one of the only two profitable Japanese camera makers, as long as they can stay profitable, some in Japan will think they have super powers. I've said it for about 18 months now: 2013 is critical to Nikon. They can't afford to slide into the no-growth, little-profit doldrums again like they did in film cameras.
So Nikon: Show us the cameras. Show us the lenses. Show us the new products. Do so and customers just might show you the money.
