Original Article written in 3/07
How To Conquer the World
Okay, it's another daydream. Again, I think, a good one...
The cover of the February 18th, 2007 issue of The New York Times Magazine had a story called "How Toyota Conquered the Car World," and featured four action points:
• Never Surrender the Long View
• Invent New Processes as Well as Products
• Seize the Historic Moment
• Do Killer Consumer Research
These action points are interesting to consider vis-a-vis Nikon. Let's take a closer look at each as it relates to Nikon and, in particular, DSLRs.
Never Surrender the Long View
Full marks right off the bat for Nikon: Nikon has historically taken a very long view of the advanced camera market. Did you realize, for example, that Nikon built its first DSLR in 1986 (the Nikon SVC, a N8008-based SLR with a 2/3" black and white sensor in it)? The first D1 prototype surfaced in 1993, and seems to be a precursor of the Fujifilm/Nikon partnership that resulted in the E2 shortly thereafter. And, of course, the appearance of the D1 itself in 1999 really set off the affordable advanced DSLR race.
But the point to be gleaned is that, at a time when Nikon was getting criticized for its slow turnover of film SLR cameras and the subsequent loss of market share to Canon, Nikon was already looking far ahead towards what the future of cameras was going to look like. Nikon had early access to Sony's sensor initiatives due to Nikon's making the equipment those sensors were created on. Nikon had early access to the integration of the digital sensor and camera through initiatives with Fujifilm and Kodak. Through these things, Nikon understood that cameras were going to profoundly change in the coming years, and began R&D very early on what ultimately became the Coolpix and Nikon DSLR lines.
We see similar long-term views in the DX versus FX debate. Nikon dabbled in FX prototypes for years, for example. But they fully understood that the primary market was originally in lower-cost DSLRs. Indeed, it wasn't until the Canon 5D appeared that any full framed DSLR managed to sell in the kinds of quantities that would have local stores and wider distribution channels here in the US consider stocking them. Nikon introduced FX in 2007 with the D3, the followed that up with the D700, D3x, D3s, D4, and D800. Even so, they were in no hurry to have just a single FX body on the market. They wanted to do it right before iterating FX. Nikon's primary goals are maintenance of product margins while increasing sales and market share; one early FX body would have minimal impacts on increased sales or market share at the price levels it would sell at.
Thus, I'm inclined to say that Nikon has been and continues to be looking at the long view. They'll have the products that are necessary when they are necessary. And they understand how major technology changes often trigger new opportunities.
Invent New Processes as Well as Products
This is an area where the consumer often doesn't see what a company is doing. At first it might not appear to matter to a consumer just how a product is built. Indirectly, it's very important, as internal processes are what determine quality control, ability to lower prices, and ability to meet demand.
Here Nikon's record is quite good, but not perfect. On the good side are examples such as the D2/F6 production, or the later D3s/D3x/D700/D800/D4 production. At one time, the Sendai plant that built those cameras was such a mishmash of production lines, parts, and procedures that it's a wonder Nikon could get any film SLR out the door, let alone film SLRs and early DSLRs. There was tons of special equipment that made parts for only one camera and couldn't adapt to new models, different parts streams, and different assembly procedures for virtually everything. With the introduction of the D2h, Nikon did a clean sweep. The D2hs, D2xs, and F6 all shared so many things that the same plant that was a model of production inefficiency turned into an example of how things can and should be done in manufacturing complex equipment. This was later replicated when the plant produced the D3s, D3x, and D700 bodies simultaneously. And again when the quake struck and Nikon was able to reconfigure the plant prior to making the D800 and D4.
Unseen by most are the areas outside the Imaging Division, most notably the Stepper division. They, too, have been re-inventing processes, including new technology that allows larger sensors to be made in a single pass. The semiconductor research, which crosses divisions, is also looking at different processes, most notably in how sensors are made in the first place. Soon we'll say goodbye to traditional CMOS, goodbye Bayer, goodbye to a whole heck of a lot of assumed techniques.
At one point, Nikon had four areas in the Imaging Division alone that were decidedly not efficient: Coolpix design/production, Pro SLR/DSLR bodies built in Japan, Consumer SLR/DSLR bodies built in Thailand, and lens production. Over time, all but the lens production have been rethought, reconfigured, and completely remade. And in doing that, much of the effort went into those new processes that we consumers rarely see.
What remains are two issues: inventory doesn't always meet demand, and in particular lens supply for many models simply isn't keeping pace with demand. Given Nikon's other initiatives in the past decade, I wouldn't be surprised to see the lens situation dealt with the same way as the others: new processes for new products. Sensors will be going through some change, too, partly through Nikon's partnerships with others like Aptina and Sony, but mostly due to Nikon's own process reinvention.
Seize the Historic Moment
While there will some who quibble with my assessment, I again give Nikon full marks on this, at least at a few times in the past. At the time Nikon jumped in with the Coolpix 100, or the moment Nikon dropped the D1 on the pro market, or the times when Nikon launched the D70 and D200, Nikon has often had the right product at the right time. As much as I and others complain about what's still missing, it's easy to forget that Nikon has been very successful at "dropping the bomb" on its competition.
When I originally wrote this article I wrote that we're at another of those historic moments and that it was unclear if Nikon would again seize the moment. The D3 and D300 answered that question. The D3x, D3s, and D700 helped seal that notion. But the thing is that progress keeps moving forward. In 2011 and 2012 we arrived at yet another historic moment, where DSLRs need to be full-fledged video cameras, too, and where Nikon had a chance to take the interchangeable lens camera market from Canon for the first time in years. Unfortunately, the quake and flood delayed some plans and altered others. Thus, what should have been a triumphant 2011 turned into just a good year.
Nikon's next few announcements are key historic products once again. CX (Nikon 1) is one good camera and a few lenses from being a tough competitor in mirrorless. DX is an iteration away from being formidable (though lenses still remain an issue). And by the fall of 2012 Nikon will have completely laid down a full FX body lineup that will be tough for anyone to match, let alone beat.
Basically, Nikon has done well in the past on this point, but we keep moving to another of those points where they need yet another clear "seize the moment" product. There’s no resting in the technology world.
Do Killer Consumer Research
Okay, here's the one we all wonder about. Basically, there are two opposing schools of thought at present. Taken only slightly to the extreme side of their arguments:
- Nikon must be doing consumer research right, otherwise they wouldn't have gained or held market share at the time of the most intense competitive pressures.
- Nikon must not be doing consumer research at all, since they haven't produced the products everyone wants them to and didn't grab the market lead from Canon yet.
So which is true? Probably both.
Nikon's engineers have a long history with SLR designs, and basically got the modern platform right starting with the N8008. Almost every Nikon design since then borrows on the basics that were fleshed out in that product back in late 1980's. The exact lineage wanders around a bit, as in N8008 -> N90 -> F5 -> N80 -> F100 -> D1 -> D100 -> D200 -> D3 -> D300 -> D700 -> D800 and so on. But the DNA of the N8008 is clearly evident in every Nikon DSLR. Indeed, the DNA of the N8008 seems to be continuing to pass on just as the digital DNA of the D1/D100 seems to be passing on with each new generation of Nikon DSLR.
Thus, one could say that Nikon's engineers got it right, and then recognized correctly that it is better to concentrate on refinements rather than upheavals.
Curiously, that supports both arguments: (1) Nikon isn't doing any real consumer research because they know they got it right and they don't need to push any new boundaries, only iterate; or (2) Nikon must be doing consumer research right in order to pick the right refinements.
So we're no closer to an answer.
Looking at the pro bodies tells us a slightly different story, though. Here, Nikon clearly made a couple of incredible mistakes along the way, and those mistakes seem to be rooted in not doing what the customer wants. I'll start with the F4 to F5 transition.
The F4 was a phenomenal camera, one that some film pros are still using to this day. That's because it got all the basics right. It is simple in operation, robust in build, and high in performance (okay, the AF has aged, but if Nikon were simply to put the current pro AF system into an otherwise unchanged F4 body, there's almost nothing a pro shooter would complain about). But pros did complain about the F5. It didn't matrix meter with manual focus lenses as did the F4. It didn't use traditional aperture ring and shutter speed dials. The grip couldn't be reconfigured to make the camera smaller and lighter. The camera now needed 8 batteries and they didn't last very long at all. The list of complaints about the F5 actually was quite long.
Some very notable Nikon pros—such as Galen Rowell—tried the F5 for a short while and reverted back to their F4. That's how badly Nikon botched the generation change: the people the product was designed for abandoned it. It didn't help that Canon had slowly built a lead in the pro market share during the time period running up to the F5. The word on the street amongst pros at the time was that the F4's autofocus wasn't as good as Canon's. The F5's autofocus system certainly brought Nikon back into parity, so they got something right, but the fact that the erosion of Nikon market share continued tells you just how badly the F5 missed the customer mark: better autofocus wasn't enough to pave over the other design mistakes.
The same thing happened more recently with the D1h to D2h transition. Once again Nikon got some things very right (again the autofocus system was pushed to meet or exceed Canon's improvements over the years). Yet Nikon seemed to think that going from 3mp to 4mp was enough. That wasn't what the pros wanted, as evidenced by the migration of even more Nikon pros to Canon 1DII bodies. But the megapixels weren't the only problem in the D2h. Color was another issue, as the camera was too sensitive to near IR. A lack of fast wide angle lenses for the DX format didn't help, either (a problem Nikon has persistently overlooked to this day). Overall, this was another pro model transition that Nikon botched, and probably because it simply didn't have enough key customer feedback entering into the process.
Even more interesting is that Nikon seems to have been pushing something that wasn't really asked for by customers at almost every pro generation switch (the two Nikon got right are D1 to D1h/D1x and the D2h/D2x to D3 change):
- F3 to F4: a lot of pros balked at the F4, as it was automated in almost every way. The F3 was reliable, didn't chew through batteries, and could survive just about anything a photojournalist did, whether it be cover a war zone or just a wet sporting event. Many pros thought autofocus too slow and unreliable, the need for so many batteries changed so often a bit of a burden, didn't like the added weight, and so on.
- F4 to F5: I've already covered it above.
- F5 to F6: Too late. The primary customers had already switched to digital.
- Film to D1: US$5000 for a camera body? Let's see, that's how many F100's? Plus having to deal with computers, no AA batteries, and a host of other things were put-offs to many pros. But the real problem was the modality of the camera, something that no previous (or subsequent) Nikon every had.
- D1 to D2: I've already covered it above.
Now don't get me wrong. Some of us are forward thinkers. For me, for instance, the D1 was the opportunity I'd been looking for to move from film to digital. Thus I embraced it far more than I ever embraced my F5 ;~). Nikon has always used their pro lineup to push new technologies into their entire product line, and as such, there's a bit of dissonance between customer expectations and Nikon's goals of pushing the technology bar further. I wouldn't give up the F4's automation, the F5's color metering, the F6's more compact body despite having "the kitchen sink" worth of technologies in it, the D1's digital entry path, the D2's fantastic autofocus and battery performance, and the D3’s excellent low light capability.
Still, my point is that almost every one of the new pro generations Nikon has made has been met with resistance by a large set of their significant customers. I've been documenting Nikon equipment since the F4 generation, and I've heard from quite a few name pros at each new generation that "this isn't what I wanted." Every one of those technological goodies that I wouldn't give up was usually accompanied by a set of other design aspects that I would give up in a second.
Thus, I have to ask a simple question: is Nikon designing pro equipment simply to create technology breakthroughs, or are they designing it to attract and retain pro customers? Until the D3 came around I'd have said the former, but even with the D3 it's the technology breakthrough that enables the customer request. Which means they're not doing enough "killer consumer research." (Don't get me wrong. Nikon should still do technology breakthroughs. But they need to get the rest of the customer experience right, too. Pushing a new technology without getting some of the "comfort" features right is a no-no in my design book.)
No place is that more evident than in lenses and accessories. Other than the 18-to-whatever DX lenses, there seems to be little rhyme nor reason to Nikon's DX offerings over the past decade. The 18-to-whatever DX lenses are there because that's what all those new consumer DSLR purchasers want. Fine. Someone got that research mostly right (though where the VR went on the 18-135mm is an indication that they didn't get it perfectly right). One might also say that the research couldn't have been perfect because they didn't get the demand for the 18-200mm VR figured out soon enough. And, of course, there's also the point that should be obvious: if the 28-200mm was the best selling consumer lens in film and the 28-300mm probably the second, then it shouldn't be too difficult to figure out that perhaps an 18-135mm and 18-200mm DX lens should exist. Indeed, would you even have to ask a customer what they want? Probably not.
Bottom Line
Nikon does well on the Toyota measurement system proposed by the New York Times. But doesn’t get perfect marks. For consumers, Nikon slowly fell behind Canon and wasn’t quick enough to alternative ideas for most of the film and about half the digital generations. For pros, almost every film and digital generation has had significant issues. I'm keeping my fingers crossed that Nikon sees the same thing and corrects their heading accordingly.
Update
A comment about Toyota's quality control problems that surfaced in 2010 is in order. As much as Toyota was perceived as strong and supremely competent in 2007 by the big mainstream press, the unintended acceleration and quality control issues that came to a head in 2010 proved that you can't take your eyes off basic things, like making quality products that don't fail the customer. Toyota got a little too arrogant about their success. The quake in 2011 brought that home again, as it turns out that all that reliance on pushing just-in-time production to its limit and squeezing of small suppliers turned around and bit them during a crisis. Even great companies make mistakes. The truly great quickly recognize a mistake, fix the problem, and move forward. Toyota's record on this is still incomplete. They were slow to recognize some of those mistakes, they did move to fix many of the problems, but there appears to be a lot of backward glancing still going on instead of looking forward.