Whither Nikon?

As I expected, August rolled by without any DSLR news from Nikon other than the 18-140mm DX lens. And here we are in mid-September already. For some reason, this year's fall announcements will actually be in the fall for a change. 

At this point, one really does have to scratch their head a bit about what Nikon is or isn't up to with their primary money making line.

Consider the following:

  • Since the August 2007 reveal of the D3, D300, and five lenses, we really haven't had  another "big bang" launch. This perplexes me. The D3 event was a big one, and it resonated loudly throughout the photographic world in ways that were highly beneficial to Nikon. Basically, it pulled Nikon back into the high-end world in a big way, and established the "modern" Nikon DSLR lineup in a way that Nikon hadn't been able to achieve before. Since then, though, we've gone back to the trickle-announcement strategy. Even the D4/D800 combo was slow rolled rather than going for a dramatic punch. 
  • Nikon has been quiet lately while Sony has been on a big roll and rumors have it the roll will continue with mirrorless full frame variations. Announcements from Nikon: P7800, S02, a DX super zoom that was long overdue for update. Announcements from Sony: Powershots RX1R, RX100II; new concepts QX10, QX100; photo-centric smartphone Xperia Z1; NEX A3000, NEX-5T, 16-70mm and 18-105mm lenses; video cameras MV1, AS30, and FDR-AX1 4k. The problem here isn't the quantity of announcements, it's that Sony is pushing firmly into new territory that Nikon simply hasn't really entered yet (Coolpix A notwithstanding). 
  • Nikon is now officially a follower. Big sensor compacts? Nikon next to last to enter, and then with something that is higher priced than a direct competitor by a large margin. APS mirrorless cameras? No play. New mirrorless stuff? No play. Video cameras? No play. 4k? No play. Programmable APIs? No play. Compact with EVF? Finally, the P7800 pops up looking a lot like the pre-existing Fujifilm X20. If all this "no play" stays intact for a few months, Christmas will be very Sonyish this year for many. 
  • The FX line is a bunch of one-offs: one consumer DSLR (D600), one high-resolution DSLR (D800), one high performance DSLR (D4). As such, this lineup doesn't look like so much of a lineup as a "sampler." What we should have is a low end and the current D600 for consumers, a D800s (16mp) and D800x (36mp) instead of the insipid variation of removing the AA sensor, and a D4s and D4x to mirror the D800s/x. Choice, not sampler.
  • The DX line is missing its true flagship and the iteration cycles seem to be longer now. The D3200 is overdue for replacement (but see paragraph, below). The D7100 took a bit longer than the usual two-year cycle. The D300s is a dinosaur. Only the D5xxx models seem to be iterating on a more regular schedule (the D5200 was even "earlier than expected" in most markets). With Sony moving from DSLR to SLT to mirrorless (soon), and Canon iterating virtually every variation of an 18mp DSLR they can think of, including one that's much smaller, Nikon's traditional keep-on-iterating more pixels and features methodology is looking like it might need some refreshing. The Sony NEX A3000 is a shot across the D3200 bow. At US$400 it's going to get some takers that think the D3200 is too expensive. And Olympus' E-M1 and high-performance lenses are going to start cutting further into the top of Nikon's DX line. I warned several years ago about what neglecting the DX lens line was going to do. Well, it's happened. E-M1 users have fast 24-80mm, 80-300mm equivalents, and fast 24mm, 35mm, 50mm, 90mm, and 150mm prime equivalents to choose from, and the whole m4/3 system is now properly scaled as the smallest and lightest enthusiast system with excellent performance. If Olympus had been aggressive in pricing, the D7100 would have been toast this Christmas. Even with Olympus' pricing, a lot of folk are experiencing a strong temptation to pay more for less (size and weight). 
  • Nikkor lenses are barely trickling. 2011: 2 F-mount lenses. 2012: 5. 2013: 4. Total DX lenses in two years: 3, two of them super zooms, the other a macro that's too short. So far Nikon has issued more press releases for awards received for products this year than for lenses. 

Meanwhile, the new rebate program in the US has expanded to all the DSLR bodies except for the D4 and to 30 of Nikon's 79 lenses (when bought with a DSLR body). This seems to imply that there's plenty of inventory overstock here in the US at the moment. Worse still, I'm told that sales receipts indicate that the three-year old D3100 was the leading seller in July, with about 15% of the DSLR market share in the US. No wonder Nikon has slowed down: they're still trying to sell discontinued cameras.

Nikon has never been the most hip, leading edge, inventive, quick to respond, or fast moving company in the camera world. But it seems to me that it's becoming even less hip, less leading edge, less inventive, and less quick lately. No doubt the quake and flood rattled the company in ways that are still being felt, and no doubt that the rise of smartphone cameras has thrown their previous strategy on the trash heap (e.g. own the compact camera market via Coolpix). The future of cameras is changing rapidly now, yet our favorite player seems mired in the status quo. 

I don't think it's a matter of whether Nikon will figure things out. It's a matter of when, and how well. 

I've made posts about the camera industry's likely declining market for almost five years now (back in 2003 I forecast the digital camera peak would come in 2010; I was off by a year, it was 2011, though some of this was stuffing inventories that took a long time to sell). 

Back when the Nikon 1 came out in 2011, I actually wrote a "what would I do article," but didn't publish it, partly because I knew I'd get a lot of flak over it, plus I didn't want to just post a long series of market economics articles.

However, we're deep in the thick of the market change now, and the camera companies are still all over the place in how they'll handle it (and some still in denial, at least publicly). For us Nikon users, it should be noted that DSLR and lens sales are now more than half of Nikon's overall sales (last quarter numbers). For Nikon to continue to grow, or even to tread water, there needs to be a real strategic response to these market changes. 

So I'm going to resurrect some of my unpublished article (with a few updates). 

This is where we should be today:

  • Overarching Strategy — Every camera in the lineup from bottom to top needs to support the same overall product statement: best made, highest performing, latest technology imaging available, and so on. The crap at the bottom, perfection at the top strategy has got to end. The emphasis across the board should be on quality: better image quality and performance coupled with long-lasting and reliable build quality, both created by pioneering technologies and purposeful design. Loosely worded marketing line: When you outgrow your smartphone's camera, every Nikon camera will take your images to a much higher level. How high do you want to go? In other words, there are Smartphone Moments, and there are Nikon Moments. 

  • Underlying Tactics — No gimmicks, just workflow and UI that directly solves user problems with taking, managing, and outputting images. No marketing gimmicks, either: it should be obvious which Nikon camera you should get from your stated purpose and your price range. This means a reduction in models, with each occupying a unique position. It also means programmability. Moreover, if you outgrow the model you bought and want to move up, you should never have to buy new batteries, new remotes, new flashes, new GPS units, and so on, nor should you need new programs. In other words: grow with us, we've got you covered. 

  • Coolpix — US$300-US$600 models, all the higher end models using 1" sensors with phase detect on sensor (preferably all of them, but that would be hard to do at the US$300 price point). Nikon makes (currently; this is one my many revisions to bring the article up to date) 24 Coolpix models, which range in retail price from US$100 to US$500 (excluding the Coolpix A). These 24 models produce about 20% of the revenue in the Imaging division, and that number is declining. Having products at every US$20 price point (and in multiple colors) is a logistical and marketing nightmare. Moreover, I believe it detracts from what Nikon wants to say: we're the world's leading maker of quality cameras, the ones you choose when the image is important.

    Nikon has a pretty good US$380 Coolpix that could be the basis of bottom of the Coolpix lineup: the P330. With some tuning, PD on sensor, and some slight cost reduction it would serve as a better "entry" compact than anything they've got today. Trying to gather up lots of folk with US$100 and US$200 not-so-great cameras isn't going to move the brand forward, IMHO. Give them a good lens, raw capability, and more, and put a reminder inside the box that this is the kind of thing that distinguishes Nikon's entire lineup: "when you need something even better, we have it."

    Realistically, from the US$300 to US$500 price point how many compacts do you need to make? Make the P330 but with a 1" sensor for the mid-point, make a variant of each of those, but with "more lens." Note that the 1" sensor versions look an awful lot like a Nikon 1 with a built-in collapsing lens. So this isn't rocket science: Nikon already has most of the pieces of the puzzle. 

    If Nikon wants to swing for the fences, then sure, put a super zoom on each base camera and add an EVF (e.g. the P510 re-purposed). Not 1000mm equivalent, though, but something that delivers quality throughout its range.

    Finally, Sony's QX offerings echo what I've been writing about for years now: Nikon needs a smartphone "camera accessory." That's really where the low-end Coolpix (and Powershot and Cybershot cameras) need to be these days. Just adding WiFi isn't enough: the "camera" has to be a real extension of the phone, as the QX is trying to do. By the way, Nikon, that supposedly "ultra-chic" S02 you just announced (Nikon's words, not mine)? Can it talk to your smartphone? No. Not chic at a all. 

  • Mirrorless — I'll repeat a point that I've made elsewhere: if you're going to make highly competent compact cameras and you already make a full line of DSLR cameras, there's not a lot of room in the middle, if any. From my four (or six) compact camera line suggestion, the step to "mirrorless" has to be more than "add interchangeable lens" in order to work. Thus, I wouldn't have done the P510 style Coolpix: I'd save the EVF for the mirrorless-in-the-middle, and I'd make sure that we had the lens reach in mirrorless, too (currently only 300mm native, and slow in aperture). 

    Of course, the problem that Nikon has gotten themselves into is sensor choice. I'm suggesting at least a 1" sensor Coolpix (and we can already hear the rumblings from within Nikon that they're going to try some 1" Coolpix). This is the same conundrum that Nikon has with the Coolpix A versus a D3200. If there were a decent, small, 28mm f/2.8 DX lens, everyone would buy a D3200 over the Coolpix A (especially the way Nikon has priced it).

    Unfortunately, the Nikon 1 line is overpriced and under performs (against competitors with bigger sensors). This is a fatal combination that doesn't meet my earlier criteria, and needs to be fixed, stat. 

  • DSLRsIt's time to make some choices. If a DX line is going to continue on, the DX lens lineup has to expand, and rapidly. No, I don't mean another half dozen super zoom choices, either. And there has to be a real bottom and top to the DX line. Nikon's current line consists mostly of a "middle" (D3200, D5200, D7100). Sony is targeting the bottom (A3000 is the first example), and Nikon loyalists bemoan the fact that their once "pro" top to the DX line is now extinct with the dinosaur D300s trying to hold down that spot. Using out-of-production DSLRs (e.g. D3100, D5100, D90) as the "bottom" and pointing to FX DSLRs as the "top" is silly, confusing to users, and leaves Nikon vulnerable to someone who gets it right. The huge response to the Olympus E-M1 is just the first round of DX users looking elsewhere and finding what they want. Fortunately for Nikon, neither Canon nor Sony seem to be able to get crop sensor DSLR right at the moment, though Sony might stumble upon it with all the products they're putting out these days. (Though Sony still has the same missing lens problem as does Nikon, for the most part.)

    The FX lineup, as I noted earlier, is a sampler. Hard to be an efficient pro with the current lineup, as we get battery and handling differences when we want to move from performance to pixels. I now wish I hadn't sold my D3s and D3x, as they were a perfectly fine combo where all the batteries and accessories were the same, the controls were the same, I could set the cameras the same, and I just had zero cognitive dissonances when moving from camera to camera. Nikon needs to restore this at a minimum (e.g. D4x). But I think (and have thought for over five years) that the smaller pro body needs the same dichotomy: D800s and D800x. We can argue about whether you need one or two consumer FX bodies, but the high-end that Nikon's reputation is built on needs to be solid. Rock solid. Right now it's a sampler at best.  

But all this is ignoring the elephant in the room: DSLRs won't be SLRs for much longer. The mirror and optical path will go away soon, if for no other reason than to reduce cost and complexity. I get into arguments with folks about whether autofocus systems can perform as well without the mirror as with (I bet they can perform as well or better), and others who complain about EVFs taking over from OVFs (a properly done EVF should be an improvement over OVF). Most of those folk haven't used a state-of-the-art PD-on-sensor or state-of-the-art EVF camera and/or can't imagine how technology moves incessantly forward and eventually fixes the issues we have had with both in the past. 

At this point I'll be surprised if the D5 in August 2015 has a mirror. I'll take a wild stab at this right now even though we're still two years out: 24mp, mirrorless, augmented PD on sensor, 3m+ dot EVF, 30 fps silent electronic shutter, 12 fps+ mechanical shutter. Anything less than that will seem like a let down.

And that's Nikon's problem in a nutshell. A lot of their announcements (or non-announcements) lately have seemed like let downs. Even the D4 seemed a bit of a let down when all was said and done: sure, 16mp instead of 12mp, but a new battery, new cards, not a lot of extra performance elsewhere. The D800 was the last big "wow" from Nikon, and they botched that by denying the focus issue for months. The D600 and D7100 were nice, but didn't generate the same excitement, plus again a quality control issue held down the D600 much like the D800.

And it's not just the cameras that aren't generating the right buzz, but Nikon's marketing, or lack thereof, is contributing, as well. For years now Nikon has been watering down the Coolpix reputation with cheaper and cheaper cameras. (I use the word cheaper here rather than inexpensive for a reason ;~). These days, many people just think of Coolpix as ubiquitous undistinguished designs that have retracting lens covers that stop retracting after a year's worth of use. In other words: low end. Very low end. So why would anyone in Nikon's marketing department think the right name for a high-end, large sensor compact made in the same factory as the pro bodies and costing more than 2x the highest other Coolpix should be named Coolpix?

(Aside: when you're with more than a dozen other photographers for a couple of weeks as I was in Botswana last month, you talk a lot about things that are wrong with your cameras and you wish were different. My over-the-top response to a design issue that shouldn't have seen daylight is usually "the person that decided that should be fired." By the end of the trip, I had fired dozens of Nikon employees ;~) So. The person who decided on the name Coolpix A? They should be fired! Yes, this is tongue in cheek, and like I just noted, over the top. But something is seriously wrong within Nikon, as too many decisions they're making just aren't resonating with the user base and are sending the wrong messages. The Coolpix A should have been called the Nikon 28 DTi. Oh, wait, it doesn't have any Ti in it, does it? Maybe it should. Wait, Nikon describes the light colored model as "Titanium," maybe that's enough? ;~) 

So here's the thing: if your primary business is making cameras, shouldn't your cameras be generating excitement?

The short checklist:

  • Move Coolpix into the future, and fast.
  • Get fully behind Nikon 1 or drop it.
  • Fix DX with a real prosumer top end, much more useful lens choice, plus better product iterations.
  • Fill out the FX line for pros.

Bonus point: figure out how you live with smartphones as the primary camera being carried by everyone.

We'll have a small set of announcements from Nikon in the next 30 days or so. Judge them by whether any of the above is achieved. 

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