The following article has been in progress for well over a year (more on that at the bottom). I've had several people whose opinion I trust look at it at several times.
One thing that came up out of that review process is something that people aren't quite fathoming yet: no matter what Nikon (or Canon) does, the number of camera models they can truly support is likely to be far, far less than peak. For some reason, that surprises people. Many of the article reviewers have responded with "but what about X model" type of questions. Simply put, there isn't room for as many models as we currently have, you can't make the economics of that work in the smaller future camera market.
The temptation among the camera makers has been to keep older models in circulation and to perform minor updates to "fill the gaps." I believe this is a tactic that works only for a short time and has now over-lived its usefulness and is counterproductive to making a solid, small, profitable camera lineup. Why? Because you want people to transition to the cameras you know you'll continue to make and boost the volume on those models. Spreading updating users among too many models means that your GPM will go down, and you can't afford that, either.
Finally, I publish this article as a thought piece. There's no way that what I propose here could actually be done, partly because you can't just jump in at one point in time, wave your hands, and make models appear/disappear. What you will be able to do over time is compare what I write here to what Nikon actually does, and get some sense of how they saw the same problem.
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The benefit of being outside looking in is that you can see mistakes more easily and you don't have to fight the in-house political battles that characterize any large organization trying to make a big change. Thus, I'll be honest right up front: I doubt Nikon can or will do what I propose.
First, I need to set some metrics. My goal will be to take a 15% market share of a near-future 4m unit market. I believe I could do better than that, and the 4m market bottom is still a guess, but I'm trying to be conservative here. Given the way the market is collapsing, you're better off planning for a very bad case (15% of 4m units) than a more optimistic one (20% of 6m units, which is about where I think Nikon's planning is).
My planning number thus works out to 600,000 interchangeable lens cameras a year. Of those, I'd guess that at least half have to sell for US$1000 or less, two-thirds of the remainder have to sell for US$2000 or less. So as a gross approximation:
- 300,000 cameras at US$1000 or less
- 200,000 cameras at US$1000 to US$2000
- 100,000 cameras at US$2000 and up
If I were actually in charge of the product line, I wouldn't be this crude in my price planning (and there's of course the issue that everything is a moving target; I can't do everything with a snap of my fingers, though for the purposes of this article, I'll make my crude three-point assumption). For the purposes of commentary on a photography Web site, I think that's appropriate. But again, when you do this in-house at the manufacturer, you are much more nuanced than I'm going to be.
You're probably guessing that it will be tough to fit Nikon's current 12 cameras into 600,000 units. Correct. Won't happen. Even considering body-only, that's far too many SKUs (stocking units) for the expected volume.
The problem, of course, is that Nikon still has a DSLR lineup and is growing a mirrorless lineup. Most of the conflict in how to proceed comes in that implied transition coupled with the contraction that is still to come.
So first up, Nikon needs to make a clear declaration about DSLRs (it might do this only internally, but I'm for transparency, so I'd do it externally, as well). I'm also going to try to be consistent in my own previous positioning here in presenting this proposal. Which means, effectively, Nikon needs to declare that there will be no more DX DSLRs. End of line. Done deal. Liquidation begins.
The reasoning behind this is, you guessed it, lenses. Given the fact that Nikon never filled out the DX lens lineup means that cameras like the D3500, D5600, and D7500 just shouldn't be in Nikon's future. They're dead ends without lenses. Nikon's DX DSLR lens lineup doesn't hold up against m4/3, Fujifilm XF, or Sony E, which it would be competing with. Even the D500 would have a difficult time living in a lens-starved world. As Nikon probably has discovered, D500 users mostly own the 16-80mm f/2.8-4 and a bunch of FX telephotos. If they have a wide angle DX zoom, it's likely not a Nikkor. And they wanted some fast DX-sized primes. Oops.
So carrying any DX DSLR forward becomes a problem. One of the issues you face in product line rationalization in a contracting market is that you have lots of problems, but you have to jettison products based on the scale of their problem versus the scale of the potential future market. The scales for DX DSLRs are (1) the things you'd have to do to fix the problem are big and expensive and have long lead times; and (2) the size of the potential market downstream is far smaller. Thus my decision to stop DX DSLR development of any kind. Note I didn't say DX development ;~).
Well, with one burst on the keyboard I've eliminated 4 of the 12 current camera models ;~).
The next part is easy: in FX DSLRs we currently have five cameras. Three of those are very old models now (6, 6, and 4 years old). Gone.
That leaves only two: the D5 and the D850. I'm with Nikon on the first one: a D6 is absolutely necessary still. It's not going to be a big seller or a game changer (pardon the pun), but it sits at the top apex position with some of Nikon's most important customers. Besides, given Nikon's four-year replacement cycle for the high pro DSLR, that work is already done. So the D5—technically its replacement—stays. You'll see it in January or so.
I think the D850 spot in the lineup stays, too, but it needs some help to do so. First, I believe this model should get the 60mp sensor. Second it needs dual CFexpress slots. Third, it could use IBIS and pixel shift. Finally, the funky features, such as focus shift shooting, need to be cleaned up and made more useful. All those things would make for a pretty incredible DSLR with long legs. One good enough to keep a lot of those D7xx/D8xx folk updating. The marketing approach is simple: "If you like DSLRs, you'll love the best one ever built."
The goal of the two DSLRs I'd carry forward is this: let those that prefer the DSLR ILC choice have the best possible iteration of a speed (D6) and quality (D900) camera available that they can update to. These would be top-end cameras, period, and they're going to live far up on top of that US$2000+ pricing, meaning that they won't have a lot of volume, but it will be important volume to keep. They're also going to live for a number of years, much like the F6 has lived in the film SLR world for the last few that want a competent camera there.
Oh, one more thing: yes, there are a couple of F-mount lenses that should still be done. Many DSLR users will stand put as they have quite competent cameras already, but can be enticed to pick up useful lenses still. Thus, I think as part of the DSLR line simplification announcement you also introduce a lens road map that discloses those future DSLR lenses.
Wait, what about the D750? After all, there are well-established and long-running rumors that Nikon will roll out a replacement for this model soon, possibly with the D6. To me, that speaks to "milk run." In other words, what's the easiest thing we can do to hold a product position we think might be important. My problem is that the D750 runs dead square against a huge group of mirrorless cameras, as it's in the middle of the lineup and that's where most of the action is taking place at the moment, including from Nikon. I'm not one to send mixed signals, and I really don't care about mopping up a few extra dollars in transition, I want to make sure what we transition to creates to-die-for products.
Worse still, the current rumors about the D750 replacement basically says it'll use the same 24mp sensor as the Z6 but slot in extra features than the Z6, like dual card slots. Oops. Doesn't Nikon really want people to buy a Z6? You really don't want to be coming out with a product so close to the product you really need to work downstream, undercutting its sales. I wouldn't make a D750 replacement, myself. Sends the wrong signal. Note my message for the D850 replacement ("best DSLR ever built"). What's the tag line for the D750 replacement, "somewhat better than our mirrorless camera"?
Which brings us to mirrorless. What I kept in the DSLR lineup is maybe 40,000 units a year, so we still have 560,000 units to fill!
We're sort of at the question of "how many camera models should we produce?" We have two so far, and I'd guess that those DSLRs will eventually taper to zero in four to six years (e.g., ultimately a mirrorless model replaces them directly).
We want clear positioning and model choice, without a lot of confusion and clutter. We need cameras with price points of US$600, US$1000, US$1500, US$2500, US$4000, US$6000, or something similar. (That's a pricing simplification, but again, a Web article has to stick to the simplification side. There's a lot more MBA-type math that would go into specific positioning points, and that target changes constantly over time. If I were writing a business plan, there'd be statistics and prediction models. For now, we'll just use those price points as markers.)
Which brings me to another point: Nikon's biggest success has been with serious enthusiast and professional shooters, people who are willing to pay a reasonable price for performance and features using a proven UX. Those are the folk that bought multiple Nikons along the way and want to stay with the brand. They're the ones with the biggest lens closets. Porsche doesn't make a entry-level Kia competitor, and I don't think Nikon should, either.
Those target Nikon users are, at a minimum, D70 type of users (current model D7500). Many moved up to the D300/D500/D700 level at some point. Some went all the way up to the D850/D5 level.
The current Z50 actually hits slightly below the D7500 level, which I find a bit of a problem (similar to the Z6 being just underneath the D750 replacement). I have no idea why Nikon thought that simplifying and removing features was the right thing to do, but overall the Z50 hits a level slightly below the Nikon user I'd want to continue to attract and retain. Thus, you won't see me do a Z10, Z20, Z30, or Z40, at least not until I could verify that those models would actually grow my market. Thus, I'd add back in some of the things that Nikon took out of the Z50 and push it higher in several areas of performance. The Z50 Mark II becomes my entry camera.
It's not a bad entry camera, actually, even as it is. It's also the closest Nikon is going to come to giving us top-end serious users a pocket camera, I think (the Z50 and kit lens does fit in my jacket pocket). This is also a camera that has potential for firmware and modest hardware upgrades that will make for a clear Mark II model. If I were in charge, I'd also roll all the firmware upgrades that fit to the existing Z50 user base as I was introducing a Mark II. Make users happy and they'll keep with your brand. Send the right message!
What Nikon really needs is a new US$1000 camera that's more sophisticated and slotted above the Z50. I'm going to call it the Z70 because, well, the D70 was so seminal in Nikon's DSLR success. I want to try to replicate that by mimicking the name. "You started with a D70 because it was the best all-around camera of its generation. Well, we've done it again, witness the Z70."
The Z70 needs the 26mp BSI APS-C sensor, more shutter performance, a better choice in rear LCD, dual SD card slots that are UHS-II, the full firmware feature set Nikon is capable of (e.g. all NEF choices, Focus Shift shooting, etc.), and "something extra." I'll leave that last bit in quotes for another discussion, but I have some serious ideas about that. This camera needs to be US$1000 body only, and reek of solid performance. It needs to be so good that D500 users want it.
And then there's this: the Z70 is DX, so it (and the Z50) need a fuller set of Z DX lenses. And those lenses should not be the consumer-fodder specs we've gotten so far. Those lenses shoot too low for long-term success. Remember, we're competing with other crop-sensor cameras with full lens sets.
That means we need a DX-sized 10-20mm f/4, 16-80mm f/2.8-4, and perhaps a 50-135mm f/2.8-4 lens, as well as a scattering of DX-sized primes in the wide to normal end (14mm f/2.8, 16mm f/2, 24mm f/2, 35mm f/1.4). I'll concede the rest of the lens lineup to the excellent Z FX lenses, because I'm defining a smaller, leaner Nikon here and don't believe I have the option to define twenty camera bodies and eighty lenses.
I'm keeping the aperture specifications slightly conservative here because a Z DX lens clearly has to be Z DX sized. The whole point is to put together a reasonably complete system that's small, light, and highly competent. One that caters to serious enthusiasts and pros. Any compromise to those things makes it less likely Nikon could hit future sales targets and retain gross profit margin (GPM).
Yep, my Z DX lineup is just two bodies and ten lenses (that includes the three known kit/convenience lenses, which is all we need of those ;~). And Z DX probably has to account for half of my projected sales. That means I can't make targeting, omission, and simplification mistakes in the DX product line. The Z50 Mark II body has to come up a bit in capability while going down in price, the Z70 has to come in like the D300 did years ago: a highly desirable product at the right price, and one that tops all competitors.
Of all the things I outline in this article, the DX side of mirrorless will be the most difficult for Nikon to get right. That's partly because, beyond the market volume collapse that has happened, we've had a price collapse, too. Nikon put the Z50 body out at US$860. That's too high for what it is, given that there is a plethora of older generation cameras on fire sale all around it and you have to get fence-sitting Last Camera Syndrome folk off the fence.
To survive and re-capture those old customers, you need an incredible product at US$600 and a super-incredible product at US$1000. Don't try to fill the gap in between, don't try to finesse the GPM down to the last penny at the expense of attracting that customer, don't leave room for the competition to out-shoot you. Don't let your loyal user have any excuses to switch brands.
Unfortunately, Nikon has almost five decades now of "missing" at the bottom of their lineup. The build a great high end, then think that they're a consumer company and put out chaff at the bottom, expecting it to hold serve and gather new customers. Every time, they overextend and end up having to regroup, just as they are right now in Tokyo. I suspect that there are too many folk in Nikon that still are shooting too low, and will think that Z DX is some sort of simplified consumer product compared to sophisticated DSLR products. That kind of thinking is dangerous right now.
I kid you not, the ultimate size or fate of Nikon in the camera business depends upon the "low end", which is Z DX. But note I put that in quotes. "Low end" for Nikon should be a higher-end target than the competition. Navigating that problem correctly—doing more at lower cost—is ultimately the thing that will define Nikon's successes or failures moving forward.
We have two other existing cameras to talk about, the Z6 and Z7. Yes, they should continue, and they should be Mark II'd very quickly. Where are the pain points that have to be fixed on these cameras? (1) Add back in the things that were simplified or removed from the D850. That's a no brainer. (2) Dual card slots. While I don't actually think this is a necessity from a product definition standpoint, the backlash that Nikon got against a single XQD slot at launch has to be addressed, and the easiest way to do that is to just do what the plebeians asked for. That would also serve the purpose of being able to say "see, we listened," something Nikon isn't so good at appearing to do. (3) Fix the add-on grip situation. The current solution looks like a quick-and-dirty MBA student summer school project that didn't get completed before they had to go back to campus. It seriously cripples the perceived upside of the camera. This is another of those "see, we listened" things. (4) Resolve the focus. We need a realistic 3D Tracking mode, and we need the ability to switch focus modes easier. The cheap thumb stick needs to be a heftier thumb pad (ala what Sony did with the A9 m2), as well. Add rear LCD touch-to-position focus capability and better tracking targeting. (5) And remember my "something extra"? Yep, add that. There's probably some small stuff I'm missing here, but again, I'm trying to keep this short and just hit the big bullet points.
All these things would make the Z6 and Z7 Mark II's prove that Nikon can do what Sony did with the A7 models. The Z6/Z7 already hold their own well against the Sony Mark III models, so it shouldn't be difficult to keep them in the lineup and selling. But it will take a solid iteration to weed out poor initial decisions Nikon made with the two models and hasn't yet addressed.
I'm going to ultimately create two other mirrorless cameras. The first is going to take the Z50 Mark II body and features and stick an FX sensor in it. Call it the Z5. This is a product that has to get down to the Canon RP pricing level. It's also a product that's going to require one or two new Z FX lenses (no IBIS means we need kit lenses with VR). Why an entry full frame? Because without the D610 and D750 on fire sale, Nikon doesn't have a solid full frame entry unless they care to fire sale the Z6. Remember, my Z50 Mark II definition is upscale from the current model, so a Z5 still packs a lot of punch, only with a bigger sensor.
The second new model would be the inevitable transition of the D1/2/3/4/5/6 line to mirrorless. Call it the Z9. I think we have until the 2022 Winter Olympics for that product to appear, so I'm not going to detail it out at the moment other than to say Nikon needs to make D6 users salivate when they see it. Instead of a D6s, Nikon pros will want a Z9 on the two-year cycle, that's how I'd know the new model was properly defined.
That's eight cameras, with a strong tilt towards mirrorless and an emphasis on core enthusiast and up-scale from that. Let's see what that gives us.
In the following, note that the pricing I list is where the price point has to get to. If you get the products perfectly right, you can sell the first shipments at a slightly higher price and then use discounting to adjust volume, a very common marketing and sales tactic. For the purposes of planning, though, you need to know where these products are designed to sell at for most of their product life and what their GPM was calculated from, thus my pricing points.
From bottom to top, my product line definitions gives us:
- Z50 Mark II — entry-level crop sensor camera at least at the sophistication level of a D70 and its successors. Going to have to sell for US$600, though.
- Z70 — top-of-the-line crop sensor camera with the sophistication and performance level of the venerable D100, D300, and D500 lineage, ultimately selling at US$1000, a price that's half what the D500 came out at.
- Z5 — the Z50 Mark II body and capabilities, but with the 24mp FX sensor. Needs to be at the US$1200 price point (2x the Z50) with potential for discounting.
- Z6 Mark II — a serious update to a current camera that's selling decently, so the update needs to be significant and meaningful to hold the price point (US$2000 with periodic discounting). This camera also needs to be the one that D610/D750 users would get, so it needs to be at or above their D610/D750 update expectations.
- Z7 Mark II — this is a trickier one, as the Z7 isn't selling as well as the Z6. It may very well mean that we need to add quite a bit to this model to get it to sell back at the US$3500 price point (ultimately discounted). The Z7 Mark III will be eventually targeted to replace the D900.
- Z9 — (Two years out) The first iteration of this product has to live in a world where the Sony A9 m2 is probably US$3500, and it has to compete well with it and the inevitable A9 m3. So I've put the Z9 at the US$3500 mark in my lineup, but that will be really tough to do. This is a bells and whistles camera, but it's going to be under immediate pricing pressure. This camera needs to be Nikon's best effort in 2022, and clearly so.
- D900 — the pixel counting DSLR user's last stand. We've got everything thrown into the box for this one, literally, as I'd likely include the vertical grip, and our goal is to get as many of the remaining D7xx/D8xx/D#x holdouts to upgrade. At US$4000, this product has to be top-notch and extremely well-rounded, just as the D850 was before it.
- D6 — the speed DSLR's last stand. Let's hope that Nikon got the definition of this US$6500 camera right, as it really has to hold its own for two or three years against the Sony A9. Eventually, Nikon's own mirrorless answer (Z9) will replace it.
So why are the mirrorless cameras less expensive than the DSLRs? Well, from a manufacturing standpoint, they're cheaper to produce. But there's a hidden plan in my lineup here: I'm encouraging people to move from DSLR to mirrorless because the mirrorless options are cheaper, yet equal or better. Yes, they aren't as high level as the two top DSLRs in some ways, but how many people actually are going to buy at the very top? Not many. I want to encourage as many folk as possible in that tasty middle to transition to mirrorless, while continuing to please the highest-end DSLR user.
Ultimately, I also want to encourage upward migration in my user base: Z50 user to Z70 or Z5. Z5 user to Z6 Mark II, Z6 user to Z7 Mark II/III or Z9.
All this also means that while I've outlined eight cameras here, ultimately I'm headed to a line of just six. I'm also not trying to stuff new models in between clear product points, slot stuff to try to attract unsophisticated consumers, or think that Augmented Reality cameras or some other business I'm not yet in will be my savior.
Six solid cameras targeted at enthusiasts and pros. A full set of lenses for Z DX and Z FX. That's the core. With so few cameras, that means that the products must meet or exceed user expectations, period. The days of feature removal, over simplification, and making the user give in to the bean counters' demands need to be over at Nikon. I'd be looking very carefully at solving more user problems, too, even ones that the user doesn't yet know they have. (Again, I've left the discussion of entirely new, desirable features out of the discussion for the moment, as they deserve an article of their own. Suffice it to say my entire eventual lineup would have that "something extra" I mentioned earlier. This is key to keeping Nikon appearing to be a leader rather than a follower.)
So finally, how do you extend that core? Ecosystem partnering. Yes, the lens mount and flash mount will be licensed under my product line management. I'd cooperate with any software developer as much as possible. I'd work with accessory makers to extend what the cameras can do. [Side note: I'd also ship lens hoods, extra batteries, and other things at the same time as the product they're for if they're not included in the box; small things matter ;~]
I can just see the NikonUSA and Nikon corporate managers all bemoaning: "but if you open up the mount we'll sell fewer lenses." Uh, guys? Aren't you supposed to be a 100-year old optics company that's better than anyone else? If you're telling me that you can't compete and create compelling, unique optics that people want, then I think you need to get out of the consumer lens-making business. Simple as that. Maybe a little less chutzpah and a lot more time in the design shop?
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As I noted above, this article has had a very long gestation period. Several times I've been tempted to publish it. The genesis was my product line thinking in late 2017 as I became aware of all the prototyping that was going on at Nikon and the discussions among top management about what products should be produced in the future. Nikon's introduction of the Z50 and Z DX actually fit in well with the models I had "planned" back in late 2017, early 2018. I've only had to change a few things overall and re-center my lowest end camera around the Z50. Likewise with the Z6 and Z7.
Whatever you think of my ideas, trust me when I write this: Nikon's top management is going through this very same process right now (and actually has been for going on three years now). As the consumer DX DSLRs totally collapse and the overall market continues to contract, Nikon in their last financial statement finally publicly admitted what all of us have known for quite some time: the future is going to be difficult and require some very carefully planned changes to stay afloat. Missteps at this point will be extremely costly.
It's time for Nikon to act with some humility, get completely in touch with and aligned with its loyal use base, and to shore up the key core of their product line. Simple as that.
