Where Are We? In DSLRs, That Is

Every year before taking my month-long break from the Internet I like to collect my thoughts on where we are camera-wise. This article tells you my current thinking about DSLRs as I head off into break. Typically when I return back, I start thinking forward, about what is necessary for us to move forward in the future.

In essence, we have two DSLR camera makers now: Canon and Nikon. Between them, they control over 90% of the market, and it may even be over 95%. Depends a bit on how and when you count. But to be clear, this is such a classic duopoly that it may be used in future business school teaching.

But all is not equal between the duopolists. Canon is doing okay, while Nikon is trending clearly downwards and struggling. Overall, DSLR numbers have slid down for four consecutive years, with the current year showing that it will be five in a row. 16.2m units. 13.8m. 10.5m, 9.7m, 8.5m. That's not just a downward slope, but it would require hill descent control on a 4x4 the slope is so steep. 

That said, I see evidence that some that left DSLRs for mirrorless come back. So all is not lost. Well, all doesn't need to be lost, but some is. Some of those that come back return to something like a D500, but they lament the lack of DX lenses (buzz, buzz). 

So while we still have a duopoly, we still have to contend with the fact that this particular portion of the camera market has basically been cut in half in a bit over four years. And is still decreasing in size. 

But volume is falling at Nikon faster than Canon. That's despite some clear channel stuffing that Nikon did in the last quarter of 2016. Because neither company generally breaks out how many mirrorless cameras they sell versus DSLR, you can't get a perfect comparison number, but I'd say that it's clear that the ratio of Canon to Nikon DSLRs being sold worldwide is at least 4:3. It's probably closer to 5:3, but I can't quite get enough discrimination of the number sets to say that for sure. 

The good news is that both Canon and Nikon have consistently kept close to their update schedules with their DSLR products. These days, most DSLRs are on two-year life cycles, some on four. Within a +/-25% time window, it appears that both companies are still on that plan. 

But I note that at the low end of the DSLR lineups—particularly the lower cost crop sensor cameras—the product iteration that is coming in each successive generation is starting to look on the lame side. That was particularly true for Nikon with the D3400 and D5600, but it seems also true of the recent Rebels. It's almost as if both companies have given up trying to push features and innovation in this category and are simply just going to max out whatever revenues they can collect in the segment and move on.

In Canon's case, they have something to move on to: EOS M. If Canon sells fewer Rebels but more M's, I'm sure that Canon will be okay with that. Nikon meanwhile, has nothing to move to, so lower D3400 and D5600 sales are going to hurt. Indeed, it seems that much of Nikon's market share slippage is coming exactly in that product position.

Above the low consumer cameras, though, both companies have done a far better job of moving their US$1000+ cameras upwards in terms of capability recently and getting existing customers to eventually move up to them. Canon will be iterating the 6D (and SL) later this week, so we'll have another chance to see what's happening with new versions of their existing models, though again at the lower end of the crop sensor and full frame DSLR spectrum. 

I wrote that both companies have been consistently close to their update cycles. But there's a caveat there, and it is again Nikon that tends to be the exception. The D610, D750, D810, and Df are all late in their update cycle window. That's most of the full frame lineup. Those are all extremely capable cameras, but Nikon seems to be okay with letting them each get a bit long in the tooth for some reason. Still, even after two years, the D810 may very well be the best all-around interchangeable lens camera you can buy. But one wonders how long I'll continue writing that. The clear edge is now an arguable point, and at some point it will be clear that Nikon has fallen behind if there's not a good update to this camera soon.

The Nikon product team must be scratching their heads. Arguably, Nikon makes the best low cost DSLR (D3400), seriously good mid-range DSLRs (D7500, D750), and competition-beating high-end models (D500, D810, D5). So why are their sales slipping so much? 

Meanwhile, the clear laggard in the Canon upgrade cycle now is the 7D Mark III. The D500 has really taken a bite out the high-end crop sensor customer, and Canon seems slow to respond. The 7D Mark II is now nearing three years old, with no replacement in sight. Unfortunately, it appears to be one of the cameras on a four-year replacement cycle, so I'm not expecting any Mark III version until 2018. It's really too bad that the folks at Nikon didn't rub salt in the wound here by making a full set of DX lenses that line up with the D500 (buzz, buzz again). 

That brings up a theatrical term: stealing the spine. In improv, when someone manages to introduce a line that diverts the skit from where it was going to somewhere new, you're said to have stolen the spine. I actually believe that's a healthy concept to adapt in marketing: steal your competitor's spine. 

Nikon managed to do that with the D500 (versus 7D Mark II). But they didn't actually play that card in marketing, nor did they reinforce the steal with additional bits (e.g. DX lenses). 

In many instances in the past few decades, Canon and Nikon have gone back and forth in stealing the spine. On the Nikon side, the D1, D3/D300, D800/D800E, and D500 have all been strong spine stealers. On the Canon side, the 1Ds, 1D Mark II, 5D (in a couple of iterations, too), 7D, 1D C (which launched the cinema line), and maybe the 5Ds have all been confiscators of the vertebrae. 

This is good. Competition keeps the level of product rising, and that makes things better for us customers. Curiously, neither side seems to really do a lot to mortally wound their competitor when they obtain the spine in a product area. Supplemental product (accessories), rapid iteration, comparative marketing, aggressive pricing, and a whole host of other factors just don't seem to be used by the duopoly. But that's often how duopoly's work. Grab as much as you can, then just let the cash cow get milked for a bit. 

Another visible aspect of the market we need to talk about is not the DSLRs themselves, but the rest of the things that the company behind them is doing. The Canon Learning Center is still going strong as far as I can tell. Canon service doesn't seem to get the same complaints from Canon DSLR users as I hear from Nikon DSLR users. Canon's marketing team is active and sending me new information every week. Nikon's? Invisible. (Over the last ten years I've asked at least four times to be put on their press release list. I have yet to receive a press release from NikonUSA.)

I've written a lot about perception in the past. Here's my current perceptions:

  • For Canon — Despite the downturn in camera sales, still promoting, supporting, and iterating products, as usual. Has defined a transition capability to mirrorless, if necessary. Is highly active in keeping remaining compact camera segment alive. Getting much more active in video, too. 
  • For NikonBecause of the downturn in camera sales, has cut back promotion and support, and has now pushed cost-cutting into product iteration in ways that show. Has no transition plan currently visible for mirrorless, if necessary. Has moved away from virtually all their compact camera ideas to the point of annoying customers. Has lost interest in video.

Note the first word in each ("despite," "because"). That defines management style. Management style defines what the customer sees. What the customer sees is often what determines whether they buy. 

Canon has as many problems with the camera sales decline as Nikon does, and as many problems with keeping DSLR sales levels up. It's not letting that disrupt how they do business, nor how they relate to customers. Nikon is disrupting their business and particularly in how they relate to customers. 

I've watched a lot of tech companies think that they can skimp on the customer relations side. They're pretty much all gone now. Ultimately, if you're a consumer company—and selling cameras is a consumer business—you have to embrace and engage consumers. Where Nikon has attempted this—the recent Show NY Some Love campaign—it has been awkward, indirect, ineffective, confusing, and pretty much totally unrelated to selling cameras. The one technology with which they could have engaged customers—SnapBridge—has been such an under-engineered, under-defined, under-performing, under-promoted disaster that all involved in SnapBridge need to be brought out for a public shaming. 

All that said, when I wrote last week about Stop Complaining, I meant it. At least in terms of cameras. Both Canon and Nikon now make, arguably, DSLR cameras and lenses that should enable you to do virtually anything you'd ever care to do photographically, and with a high degree of reliability and quality in the results. 

We live in special times. As much as I feel that we could have even better products than we do, what we have is far beyond what we'd have dreamed of 20 years ago. Maybe even 10 years ago or less. 

Where we are in DSLRs is this: we have unbelievable equipment available to us. While we still struggle with cumbersome workflows, the results we achieve are amazing. Or they should be. 

I'm not entirely sure why Canon and Nikon are incapable of conveying that to potential new customers. 

Some of you are shouting at me "but Thom, it's the thing you've written about: the cameras just don't work with social sharing." My response to that would be this if I were running a DSLR company: Yes, that's true today. But you can't do better than these cameras can, and what are you going to put on your future 8K video screens in the future, little 12mp JPEGs with noticeable artifacts? But better still, we're aware of what you want and we'll be working to give you the sharing connections you want. So why not start building a system today and grow with it into the future?

And that's really where we are. If the two DSLR makers never embrace the Internet and the way images are shared and displayed today, then sales will keep dropping as the number of people who will tolerate the "hassle" of a DSLR dwindle. The ones that keep using DSLRs will still be producing the best-looking and highest quality photos with the most potential variations via lens choice, though ;~). 

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