It’s common among those trying to explain the collapse of the dedicated camera market to ascribe this solely to the rise of smartphones. No doubt that the progress companies like Apple and Google have shown with the cameras built into their yearly updates coupled with the ease of sharing the photos those phones take has had a large impact on whether people might opt for a dedicated camera, but it’s really only one of the factors that come into play (careful, strong generalizations ahead):
- Disposable Income. You might not have noticed if you’re in the 1%, but the other 99% isn’t really managing to get ahead lately. Throughout the world you see the masses starting to rebel against the class disparity, and they’re not in a mood to buy cameras. Buying cameras—at least the bulk of the market that the camera makers need to be healthy—is a middle class disposable income function, and that middle class is under stress. Everywhere. With new interesting full frame cameras checking in at US$2000 or more, and new lenses worth putting on those cameras ranging upwards from US$750, that’s a lot of disposable income the camera companies are counting on. Yes, some still can afford that—the higher up the class spectrum they are, the more likely they can—but I’ve noted more and more folk around me delaying their upgrades lately. Some of that has to do with monetary stress. With items like cable/TV bills now running at a couple of grand a year now for many and a cellular plan piling on even more expense to that, consumables are chewing into the middle class budgets in big ways now. I just don’t think you can expect to sell any expensive cameras into the lower and even middle class any more. They can’t afford them, even if they want one. But even the upper middle class is slowing their camera buying as far as I can see in the numbers.
- Aging and Changing Demographics. The unspoken thing about digital cameras is this: the Baby Boomers hit their career and buying strides right around the time that the D1 came out. Many had grown up with film cameras and found the digital cameras solved their biggest issue with film (e.g. “did I get the shot?”). The innovation of digital came at the right time and solved the right problem. And we were off to the races. Today? The following generations are struggling more than the Boomers did (see Disposable Income), and didn’t have the closet full of film lenses they could resurrect. Some might not have even participated in film, but started with an early digital camera. Unfortunately, the Boomers are all at retirement age now. If they’re still interested in photography they have a tendency to buy at the very top and make that their Last Camera. When that Boomer buys a D850 today, what camera, if any, would they even consider next? Also, remember that traditionally, (first) marriage, first home, first baby tended to be the trigger events that caused someone to purchase their first interchangeable lens camera. At the other end of the generation spectrum, the Millennials are marrying later, not necessarily buying a home, and having a family later. So all across the demographics there are things changing that don’t favor the camera makers. Current smartphones are getting good enough that First Baby photos don’t require a sophisticated high-end camera any more, too.
- No New Innovation. Let’s count the big innovations that made people buy cameras: (1) interchangeable lenses; (2) automatic exposure metering; (3) autofocus; and (4) digital (chimp to see the image you took). Some might add (5) mirrorless allows you to preview your photo. #5 wasn’t as big a revolution as #4, but I’d tend to argue that it was a necessary step. Unfortunately, EVFs weren’t up to the job early on, so it’s been a slow roll from DSLR to mirrorless. To trigger a new Mass Buying Event—that’s where everyone decides that what’s in their closet is obsolete and they need the new thing—you need a big Innovation that solves a Big User Problem (BUP). Unfortunately, the Japanese camera makers have no idea what a BUP is until it hits them on the head and gives them a concussion (and it takes them time to recover from the concussion). Nikon R&D was very early to things like image stabilization and autofocus, only they didn’t commit to either to make a big BUP type move. Instead, Canon saw Nikon’s VR research and eventually ran with that, while Minolta (correctly) saw autofocus as the way they could unseat Canikon (too bad about the patent violations ;~). To some degree, Sony’s early commitment to mirrorless is a bit of BUP, but it took a long, long time to play that out, and that really didn’t generate a big buying spree, it just started siphoning market share from Canikon in a declining market.
- Completely Built Out, but Not. Related to the previous point is this: cameras as we now know them are highly competent. Indeed, pretty much any dedicated camera built in the last seven years or so is able to take great photos when used properly. So look at what camera companies have been adding as “features” to new models. A lot of that has been small things (everyone tinkers with their JPEG rendering a bit each generation, but I’d defy you to pick out the differences between, say, EXPEED 4 and EXPEED 6 while looking at a NIkon JPEG). Other things that have been added tend to be incomplete (e.g. focus stacking and pixel shift, where not a single implementation to date is what I’d consider complete and fully usable without hurting your head). Nothing really compelling is happening with the current level of engineering updates. Not compelling? Then there’s no need to buy it. (See today's other article.)
- Overbuilt Inventory. If the new cameras aren’t exactly overly compelling and older cameras are still capable of taking great photos, then by keeping that older camera inventory around longer, you get into a different problem. You end up discounting the older product, sometimes excessively, and that in turn then lowers the sales of your newest product. Doh! As far as I can tell, every camera maker has excess manufacturing capacity now. Moreover, I believe that many of those older cameras in inventory are the result of committing to a volume of sensors they weren’t actually able to sell. In other words, everyone was overoptimistic in how easy it would be to sell product, and overextended themselves in parts commitment to try to squeeze more profits out. One thing that doesn’t get talked about in business is that you can make ten right decisions but one wrong one can undercut everything. Or 9 and 2, 8 and 3. Every business thinks that they can nail all eleven decisions perfectly, and they’re always wrong. How much wrong determines whether they can recover or not. I currently count three Japanese camera makers that clearly made a wrong decision somewhere, and three that are in some jeopardy with their current decisions. Yeah, that leaves one, and that would be Sony. But I’m not at all convinced that Sony won’t undercut themselves in this tough, contracting market. That’s the other thing that isn’t talked about in business enough: you have to keep making decisions, so you’re always playing the game and can always end up making a mistake. When I saw the 2019 CIPA estimates—which come from the consolidation of Japanese company manufacturing plans for the coming year—I was pretty sure that more inventory was going to be added to the already overbuilt inventory. In other words, those estimates were high. So what’s happening with overbuilt inventory is this: Tokyo keeps overestimating, year after year, which means inventory never goes away. That’s a wrong decision that can undercut every other decision.
- Inability to Integrate. Making cameras (and lenses) is a business that seems to believe that it stands alone. That you don’t need to integrate cameras with anything else. I ask you this: what camera today helps you with your eventual output, whether that be sharing over the Internet or making prints? Why, for instance, do so many cameras set the DPI field at 72? What printer do they think we’re printing to? Worse still, the camera makers really don’t want to integrate with the program you’re going to print from (e.g. Lightroom). Or help your printer understand the color profile the camera maker baked into the JPEG. Heaven help you if you want to post to Instagram (square photos baby). Frankly, the camera makers just don’t give much of dang about anything that isn’t a camera or a lens that they make. Nikon can’t even put out batteries and needed accessories in the aftermarket at the same time the cameras they introduce. Nikon is so bad at integration, they can’t even integrate with themself! Funny thing is, these same camera companies all talk about their “system.” That word is used over and over in marketing materials and manuals. But that system doesn’t work very well with the Internet, with modern Wi-Fi, with image sharing services, with your computer, with your software, with…well, with anything other than the lenses the camera maker makes for the camera, and even then you run into things like Canon EOS M being in a land all of its own. Want to have a bigger market? Be part of something even bigger: integrate with the modern world.
- Added Complexity. My books on some recent cameras are now pushing out over 1000 pages. You might dismiss that by saying “they’re downloadable books, so that’s not an accurate page count.” Nope. It’s a very accurate page count because I express that number as if the book was printed in standard trade paperback format. To accurately and completely describe any enthusiast camera product these days takes a lot of verbiage and illustration. The products have become extremely complex and nuanced. All that’s a bit in contradiction to what you want to do: observe a scene in front of you and reduce it to a simple two-dimensional moment-in-time capture. Even at the simplest level (exposure, composition, and focus) you’re juggling a lot of variables, and you need multiple buttons and dials to control those. One of the not oft noticed things about smartphone cameras is that they just do a lot of the heavy lifting and leave you to composition and moment in time only. It’s not just that smartphones know how to share images, but that they also automate and simplify so much of the process of taking one (e.g. HDR is done automatically now). And they also make modifying (using filters) on an image simple, too: review the image, pick and choose. Nikon cameras allow you to modify images in lots of ways, ala smartphones, but it’s done via another menu and another workflow. Why can’t I directly access cropping and filtering options while I’ve viewing the image just after I took it? Nope, I have to leave playback, go to another menu, pick what I want to do, pull up playback again to pick my image (!), and then perform my action. Golly gee, Mr. Salaryman, have you not used a smartphone? Did no one ever tell you about direct UX? Cameras are partly complex because so much of what you have to do is indirect. That’s one reason why a lot of photographers get excited about shutter speed and aperture and ISO and exposure compensation dials. Direct. Change dial position, things change accordingly. Everyone understands direct UX (other than Mr. Salaryman designing your camera ;~).
- Travel Restrictions. It’s never been fun to travel the world with a DSLR and a bunch of big lenses, particularly wildlife capture beasts like a 500mm f/4 or bigger. Unfortunately, traveling with cameras keeps getting worse and worse. To the point where you couldn’t even manage to get a basic system packed into the weight allowances on some airlines, let alone that 500mm f/4. The aging photographer demographic can’t carry 50 pounds any more, either. So there’s been a long growing demand for smaller and lighter. As much as those that claim the Sony A7’s are too small, I think Sony’s approach is correct: smaller is better long term. What Sony got wrong initially was hand position and controls. They’ve been slowly fixing those, to their credit. Nikon’s got it right with their Z cameras. My mirrorless kits these days are smaller and lighter than my previous DSLR kits, and just as competent (arguably even more competent in some ways). But this is a never-ending quest. The Nikon PF lenses are a revelation, and we need more of those (or similar).
- Self-Fulfilling Cycle. If all you ever do is increment, eventually you hit a roadblock: each iteration gets less take up by customers. Less take up by customers means you cut back on your iteration (longer cycles or less change). Cutting back on your iteration gets less take up by customers. The Japanese consumer electronics industry is notorious for this insidious cycle. Find a market, rush to dominate it, fractionalize it (low cost, moderate cost, and high cost options), then iterate, iterate, iterate. And for some reason, that market goes away. Hmm. Wasn’t anything we did, was it? ;~) TV makers, for instance, wanted 3D to take off, then 4K, now HDR, next 6K or 8K. Why? Because it ends the cycle and starts the next new BUP. But note that 3D wasn’t a Big User Problem. Failed. 4K isn’t really a Big User Problem when users have no 4K content. Slow take-up. HDR isn’t a Big User Problem. Will fail. Put another way, the Japanese CES companies, including the camera companies, are good at the iteration cycle, way less good at triggering a new buying cycle and generating higher demand again. Unfortunately those mild iteration cycles are destined to generate smaller and smaller returns.
You might notice how many of these trends interact in some way. The cumulative sum of the problems is actually greater than the parts, unfortunately. Give me one way to ignore buying a new camera and I can probably dismiss that. Give me ten ways to ignore buying a new camera, and I can’t dismiss that.
Realistically, there’s no way any camera maker survives unless they figure out how to address all of those trend lines. They need to go 11-0, not 9-2. The longer that they don’t find the solutions, the worse the problem becomes (e.g. Self-Fulfilling Cycle just flies the plane into the ground).
Some trends are outside the camera makers’ ability to address directly (e.g. Disposable Income, Demographics). Others have potential costs that the camera makers would rather avoid (e.g. Innovation and Integration).
Nevertheless, as a business that wants to stay a business, you must get in front of all these things and rebuild your products and organizations so that they can survive. That’s not happening fast enough in Tokyo. Not even close. I'm not sure that (mostly) having bankers in charge they will ever see or understand that.
I’m going to suggest that there’s a bigger issue here, too: the camera companies just want to sell boxes, not build relationships with customers. I’ve been a big fan of Sony’s Kando (and mini-Kando) events because they at least partly speak to this. But even with Kando you see inefficiencies that just shouldn’t be carried on (example: if you buy a Sony “box” do you get any clear marketing message about Kando and how to participate? Did you become a member of the tribe and welcomed by the chief? Is there a daily advantage to being in the tribe?).
Sony’s actually using Kando more for influencer-type promotion than they are trying to get closer to their entire customer base and keep them happy. I would suggest that you can and should do both simultaneously.
Every camera company executive in the US is going to complain about what I just wrote. “But Thom,” they’ll say, “we send sales reps to do mini-events in stores all the time.” I see. What’s the point of those events? Sell more product, not get closer to the customer. The fact that it’s sales reps that are being used should tell you something.
The bottom line is that Tokyo is fighting a lot of battles, and is doing so poorly. That’s why they’re seeing a healthy business slowly decline and wither away.
I’m not saying that the camera business could ever be 18m interchangeable lens cameras again. Not even close. But I’d like to think that my 4m unit market bottom call could be improved upon by playing the game right (or that a player that gets the decisions right could break out compared to the others). Worse, failing to address the trend lines and get closer to customers could see us falling through even my pessimistic bottom.
I’d hate to think that a few years from now my best selling book will be The Complete Guide to the Apple iPhone 14 Pro Max Ultra Bionic.
