(news & commentary) Updated
Everyone’s got cameras and lenses on sale at the moment. I’ll get to my predictions about what will happen next in a moment, but first let’s examine Nikon’s latest offering.
First, the lower lens prices Nikon officially posted earlier in the month were price reductions, not instant savings. All the new discounts come off those new prices, which is good.
Basically, Nikon’s got new body+lens bundle discounts. It gets too complicated to describe in words in a short article, so I invite you to go to B&H’s landing page for the program, which allows you pick the body you want, then examine the available lens discounts if you buy the lens together with the body. Nikon lists these as “up to US$1100” instant savings (D810, the D3200 is more modest at US$280 potential savings). To get that, you have to buy the D810 and 24-120mm f/4 bundle, which puts you basically at the old D810 MSRP price. Not bad (and B&H is throwing in a number of other goodies, such as a GP-1A GPS, an extra battery, a card, and even a 2% rebate on future orders).
Other online shops seem to be creating similar packages to sweeten the deal; your local dealer may have a difficult time matching some of those, but I’d encourage you to support your local dealer, anyway. Without them, we’re going to end up with a future where you won’t be able to actually handle and try an expensive camera before ordering. That has to be worth something.
The good news is that a lot of great lenses are now producing instant discounts when bought with a body. Most of the recent f/1.8G primes all have a US$50 or US$100 savings. Even recent lenses, such as the 16-80mm f/2.8-4 DX are in on the savings, which may tell us something about the demand so far for that lens. Overall, the Nikon discounting here in the US seems to be what I would call mildly aggressive.
If you’ve been waiting to buy a new camera, now’s the time to get off the fence or put your feet in cement. Why? I don’t think the Japanese companies can really sustain a prolonged discounting without truly damaging their financials in ways that would be obvious to shareholders and hurt them further. We’re nearing the end of the year and the CIPA forecasts look like they are going to be close to met or maybe even exceeded in one case, which has most of the companies breathing a slight sigh of relief. Things still aren’t rosy, but the decline this year was much less pronounced and what most of us thought were aggressive CIPA forecasts seem to being met, though with a lot of discounting.
Here’s what I think happens next: everyone tightens up as much as they dare in January. At least temporarily, the camera companies will try to rid themselves of across the board discounting. At the same time, we’ll be seeing everyone begin to announce what they hope will be “saving products,” cameras and lenses that start to reverse their fortune a bit. Most of those will be more expensive than current models. There will be a rush to try to re-establish old, higher MSRPs and push models upwards in features, performance, and pricing.
Update: multiple sources are now reporting substantive price increases being planned for Nikon lenses in Europe starting January 1st. This ties in with what I just wrote: everyone tightens up as much as they dare in January. Apparently Nikon is going to use that point to try to recover margin and blame that on currency adjustments.
This just goes to show how on-the-edge things are: sales are down, but if you can push prices up then your financial results don’t look bad at all. But can you really push prices up? To a large degree, Nikon did just that by emphasizing FX over DX for the past few years. But how much more can they push upward?
Sony is doing the same with the A7 Mark II models lately, though note that you can find a new, in original packaging A7 for at or even under US$1000 if you look closely enough. In other words, not all those A7’s sold the first go around, despite the buzz. Now Sony’s pushed prices up into D810 range. That’s going to have a chilling effect on volume. And since we know that previous generation cameras now get hung over in inventory and eventually deeply discounted, the smart person thinking about making a move to Sony is either buying the Mark I models or waiting for Sony to launch the Mark III’s and discount the II’s.
This is all a very slippery slope for the camera makers, and we’ve watched a lot of industries go through these same gyrations before fixing themselves (or dying). Bottom line is this: camera makers will continue to try to move upscale, volume will continue to drop, which will result in heavy discounting of older products to move them off shelves. This will come and go in waves. Right now we’re in the discount wave. In January, we’ll be out of the discount wave for a while.
The question is whether these new products will be buzz worthy enough to produce the increased demand at higher prices that the Japanese companies are targeting. This gets really tricky, as most of the companies have a fiscal year that ends in March, so if they don’t launch compelling new products in January and February and ship them by the end of March, they could get caught in a fiscal-year-end downturn. I suspect Nikon will be, which means we could see a return of significant discounts in March.
But we won’t know what the Japanese companies are truly thinking until CP+, which next year doesn’t happen until the end of February, literally. At that point we’ll see the full year CIPA projections, we’ll have seen most of the significant early year new product launches, and we’ll have the year-end 2015 numbers to examine closely.
So, buy or wait. Better yet, just go out and shoot. That’s what I’m going to be doing for the next couple of weeks, and it’s not a bad way to get away from all the marketing and promotions.
