My Nikon Proposal Followup

Wow. My Proposal for Nikon’s Product Future sure generated a lot of feedback. The most feedback I’ve gotten on any article in 2019.

As with the initial private article reviews I had done before I published the final article, the results were the same from the readership: a lot of “yes, but…” With the but part being about a product they specifically wanted to see move forward or be added.

Here’s the thing about that: there wasn’t any big consensus to save any particular product. I’d read one email and it would say “love the idea, but they should make a Df2,” while the next would say “love the idea, but they should do a DX DSLR with the Z mount” (and a snout ;~). 

All this confirms something I’ve been writing for awhile now: the exact product you want may not exist two, three, four years from now. That’s due to the core thesis behind the article: a camera company must survive on lower unit volume than they’re currently selling. Lower unit volume than they’ve been predicting. Lower unit volume than we’ve had at virtually any time in the digital camera era other than the first few years. 

That means that the camera companies need a few really good products that take and defend unique places in the overall product lineup. Products to which people will upgrade. Unfortunately, that also means fewer products overall. Which was what I tried to do with my proposed list.

That brings me to the second point. I stopped counting after 100 such responses, but my In Box was filled with another comment: “I’m not upgrading at the moment because I’m not sure what to upgrade to and why I would want to do that.”

So, besides identifying and defending a unique product niche—as opposed to being a slight variation of other products around it—each camera in the future must be compelling. Moreover, the compelling aspect needs to be marketed well so that potential buyers understand the benefit.

The camera makers’ ideas about what is compelling are getting very narrow. The Sony A7R m4’s compellingness? 60mp. Oh, “and we improved some body ergonomics.” I’ll bet that Sony is finding that the A7R m4 isn’t quite selling at the rate they thought it would (it’s in stock everywhere, and, of course, Sony also has plenty of A7R m3’s to still sell, too).  

That’s because of what I call frictions. One big friction that Sony users are starting to figure out is that Sony file sizes are incredibly big, and nowhere near as tightly packed as Canon and Nikon files are. Not only is Sony offering more pixels, but that is making file sizes way bigger. You’ll need more storage and a faster computer to deal with them. That’s a friction. (Note, there’s already a presumption of raw shooters here. Is there any JPEG shooter that really wants and needs 60mp? ;~)

What the camera makers don’t need right now is to produce any product that has clear frictions in it. That stalls the upgrade market, which is the only big market they have left. I have no idea why Nikon didn’t put the AF-ON+Focus Area combo choice on the Z’s, but that’s a friction. Nikon users had just rejoiced when the D5 generation DSLRs introduced it, and now…it’s gone again. For some reason Nikon thought they had to simplify cameras that they wanted their sophisticated users to upgrade to. Bzzt. "I’m sorry, but that’s the wrong answer. How much did you wager?”

In a contracting market where you have a sizable installed base—which defines interchangeable lens cameras—the biggest thing you have to address is how to stop the contraction. All the bean counting in the world won’t do you any good if you don’t stop the contraction. That’s because as you take things out to save money, you increase other frictions and fewer people decide to buy, so the contraction just continues. Also, as you take things out, you decrease the desire of your existing users to upgrade, so the contraction continues.

The proper product response is the opposite: put as many things into the products as you can to make them truly compelling. If that costs more to do, then you need to find cost savings elsewhere, as putting cost reduction in the product itself is in the long run counterproductive.

My article got a lot of response well beyond my site. One dpreview fora post commenting on it maxed out the same day it appeared. Youtubers kicked in with their answer on how to save Nikon. Other sites published their views on the same subject. 

Another way of looking at my article is “what will happen to the other camera makers?” I posited an eventual six cameras for Nikon on a 15% market share, but what about Canon and Sony? Or Fujifilm and Olympus? 

Well, if Canon can reasonably hold serve and stay at the 40% or higher market share level, they can definitely afford to have a few more models than Nikon. But the future model total is not going to be the huge number (27) they currently have on the market, that’s for sure. 

Like Nikon, Canon has to make a clear decision about how many DSLRs to keep around, and for how long. Where I wanted Nikon to get down to two, Canon could probably sustain three or maybe even four for the same period of time. But they can’t all be Rebels (KISS in some markets). Indeed, I don’t think any of them should be Rebels. I’d go with the SL3, 90D, 5D m4/5, and 1DX m3, with the first two being next on my cut list. 

The problem, as I’ve been pointing out for a long time now, is that Canon’s mirrorless options aren’t compatible. M doesn’t lead to RF. The M mount becomes a dead end as DSLRs (and their EF mount lenses that are adaptable) go away. 

Note also that Canon’s naming system is in complete disarray, too, which is sowing additional confusion among those not following along closely. We have Rebels and SLs and ##D’s and #D’s and M’s and R’s. That’s six naming schemes. Plus the M’s have # and ## and ### variations. 

What I was asking for from a future Nikon lineup is simplicity and clarity. For Canon? Heck, I’ll start with clarity ;~). The current situation is a complete marketing nightmare. Note that Apple got themselves into a similar one with their laptop lineup at one point, which had so many models with different architectures inside I couldn’t keep track of all the differences (now pretty much simplified to MacBook Air, MacBook Pro 13”, and MacBook Pro 16”, the old Goldilocks three-choice scenario). 

Thus, I think Canon actually has more work to do and more to lose in a continuing market contraction than Nikon. They’re juggling dozens of balls of different sizes and balances, and no one can keep track of which name goes with which ball. Or maybe they’re juggling a watermelon, bowling pin, and a chain saw. Who knows? Someone in Canon thought that this mess was the right approach, let’s ask them…oh wait, you say they’re no longer answering their phone? ;~)

I’m going to make another of my bold type predictions: Canon’s Imaging group will go unprofitable at some point soon before they fix their problem, just as Nikon’s did. Canon’s still trying to have the best of both worlds (DSLRs and mirrorless, and two different approaches to mirrorless).

Meanwhile, Sony’s biggest problem is that it has to get out of the “we’ll sell you any generation of that camera” syndrome. Similar to Nikon, they are in a situation now where it’s unclear why someone wants to update. That’s particularly true in the A6### lineup of five similar looking cameras that I’d defy most of you to properly identify the differences between. How’s that work to optimize GPM in a contracting market? 

Much like Nikon, four full frame and two APS-C cameras from Sony could go a long way if properly separated (e.g. A6100, A6600, A7, A7S, A7R, A9). There’s just not enough market volume to “fill in the blanks” between those models, and leaving older cameras to fill in price gaps I doubt is optimal. Though I will admit, at the moment Canon's and Nikon’s mistakes are letting Sony get away with that model proliferation across generations. If Canon and Nikon were better competitors, Sony would be having issues selling right now.

Canikony are 86% of my market bottom call (i.e. should take a large majority share of the 4m ILC units I predict as bottom). 

The remaining 14% are going to be a dogfight that no one wants to be in. 14% of 4m is 560,000 total units to be split between six players (Fujifilm, Leica, Olympus, Panasonic, Pentax, Sigma). It’s difficult to see how they all survive, let alone stay profitable. Oh, wait, one of them we know is unprofitable and one clearly seems to be unprofitable. Only one of them, Leica, we know shows a clear profit. But again, I’m predicting the market to contract quite a bit from where it is. Profitability changes fast as your market size declines.

You’d have to guess that having a small piece like these six will may just not be enough to make or sustain profits. I’ve gone on record elsewhere that Olympus should be making only four cameras right now (compact and ILC). Ignoring (many) older models still being sold, Olympus is at seven ILC cameras at the moment and unprofitable. Fortunately for them, the rest of the company is highly profitable and looking the other way.

The company in the Six Dwarfs I worry about most is Fujifilm. I think they’ve overextended. Four APS-C models would be enough for their likely sales volume. I don’t get the X-Pro3, X-H1, and X-T3 trio. These all seem to be trying to cleve the same basic user three ways. I believe that Fujifilm needs to pick a lane and put everything they’ve got into that. The GF line is fine, though I’m not sure three separate cameras are needed there, either. Like Olympus, the rest of the company is so big and not under undue stress, so upper Fujifilm management tolerates the small camera group for the moment. 

So finally, here's the question no one is asking: what happens to the camera industry if we get a global recession of some sort during this continued strong contraction? That could be the thing that triggers us to lose one or more camera makers.

And again, the way around the problem is to make the very best possible camera you can. Something that is compelling enough that people upgrade to it despite a recession. Thus, I'll stick with my original plan for Nikon. 

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