Nikon President Eyes Smartphone Users as Compact Sales Fall

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http://www.bloomberg.com/news/2013-...s-smartphone-users-as-compact-sales-fall.html


Nikon Corp. is looking at ways to tap smartphone growth as a slump in compact camera sales may lead to weaker-than-forecast earnings.
Point-and-shoot camera sales across the industry dropped about a quarter in April and May from a year earlier, President Makoto Kimura said in a July 4 interview at Nikon’s Tokyo headquarters, citing third-party research. Smartphone shipments jumped 46 percent last year to 722 million units, according to Framingham, Massachusetts-based IDC Corp.

Makoto Kimura, president of Nikon Corp., holds a Nikon D4 digital single lens reflex (DSLR) camera as he poses for a photograph at the company's head office in Tokyo. Photographer: Kiyoshi Ota/Bloomberg

“The number of people taking snapshots is exploding by use of smartphones that sold 750 million or so last year and are still growing,” Kimura said. “We’ve centralized our ideas around cameras but can change our approach to offer products to that bigger market.”
(More text and photos at the URL)
 
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The sad thing is that Thom Hogan has been pointing this out for years. Just like mirrorless cameras... Looks like Nikon is once again going to come late to the party, probably with something that is crippled to protect the sales of their compacts, and grossly overpriced.
 
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And yet there are plenty of Nikon T-Shirt wearing folk in these forums who will buy one, of that you can be sure. Of course they are far, far, far too late to make any serious impression on this market unless they come up with something nobody knew they wanted but Nikon aren't that sort of company. Of all the smartphones I have had I can honestly say that I have not taken a single photograph with any of them so having one which said Nikon on it would be about as appealing as a Nikon Microwave.
 
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Of all the smartphones I have had I can honestly say that I have not taken a single photograph with any of them so having one which said Nikon on it would be about as appealing as a Nikon Microwave.

It's not about a Nikon cellphone.

It's about a camera that can compete with what a cellphone has to offer these days. And seriously, that's going to be very hard, as you'll have to overcome the mile-high hurdle of “carrying something else with you” in the first place. Now that I have an iPhone my Canon S90 barely sees daylight anymore. Yes, it’s still a better camera than the iPhone, but the difference is too small to overcome the deficiencies the Canon has compared to the cellphone:
  • It takes up a lot of space
  • Sharing pictures involves connecting with a cable, or extracting the memory card
  • Editing the photos before sharing is cumbersome
You might argue that most of the issues I'm listing are really not that much to overcome, especially once you have your images on a computer, but that is not how the market works.

I don't expect my camera to be a cellphone. But it would be nice if it had wifi, and if, in absence of a working wifi connection, I could cue any tweets, facebook, flickr, instagram, pinterest and who-knows-what other social networking updates. And when I say "I" I don't mean Lurker, but I mean the average customer that would buy a compact camera.

That's the disconnect that CC's have compared to cell phones and the gap seems to grow extremely rapidly. Two years ago you could still shrug it off and say “meh, you still get better results with a camera.” Today is a different story and the smart phone is superior in the ability to share pictures.

Just as much as we recognize that there's more to an image than just sharpness, and that high-performance cameras allow you to get that extra by superior ergonomics, there's more to a snapshot than just being a $0.20 print at the local pharmacy. Smart phones offer that “extra” for snapshots that compact cameras don’t offer.

If we take Nikon’s past performance with “One” into account (by all means a well engineered system, it’s just the marketing and pricing that is incompetent beyond imagination) then we can be truly worried. Nikon’s remarks suggest that they realize now, finally that the compact camera market is under fire by smart phones which means it’ll take another two or three years before we see any products. Well, by then there is no CC market left. And then they’ll price it in a ridiculous way because we don’t want to cannibalize our compact camera sales, we’ll leave that to Apple and Samsung who are much better at it. And even if, and now I'm deep into lala–land, Nikon manages to pull it off in time and price it reasonably, they’ll likely bork it by having it only upload to nikonworld.com instead of facebook, flickr, instagram or other popular sites.
 
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And yet there are plenty of Nikon T-Shirt wearing folk in these forums who will buy one, of that you can be sure. Of course they are far, far, far too late to make any serious impression on this market unless they come up with something nobody knew they wanted but Nikon aren't that sort of company. Of all the smartphones I have had I can honestly say that I have not taken a single photograph with any of them so having one which said Nikon on it would be about as appealing as a Nikon Microwave.

You are not the market for this.

Nikon would like to be the OEM provider to smartphone manufactures. This is a lucrative business as all phones now have cameras. They don't need to make the phone themselves, just the camera parts.
 
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It reads as if it is more than being an OEM.

"Nikon’s imaging division and a new business team are working on products that are expected to be available in less than five years, according to the president.
“We want to create a product that will change the concept of cameras,” said Kimura. “It could be a non-camera consumer product.” The president declined to say if the company was developing a mobile phone."
 
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You are not the market for this.

Nikon would like to be the OEM provider to smartphone manufactures. This is a lucrative business as all phones now have cameras. They don't need to make the phone themselves, just the camera parts.

I think they are probably thinking a little bigger than that! Nobody cares what brand supplies the lens and sensor in their smartphone. I did read what was in my beautiful new Sony when I first got it (it begins with E but other than that I can't tell you) but it would mean nothing to me if it was Nikon, Canon, Panasonic or whatever. I honestly think the vast majority of people don't care one way or the other as long as it takes acceptable photographs for uploading somewhere or sending in an email or text. I think Nikon must have something far more ambitious up their sleeve than that.
 
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IMHO the problem is going to be the business model, not the technology. In Europe, most phones are sold on a contract, so capital layout is not large. Cameras are purchased at a comparatively high price.
Contract costs are less painful than acquiring and immediately owning.
Take it further, phones could become free to own as long as the user signs for a set of services that are charged for.
To compete in that market, cameras would need to adopt a similar approach.
 
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Vast majority of people don't know who makes the parts in their phones. You can bet the companies that do make them want their technology in the phones.

If Nikon is thinking bigger than just supplying parts to smartphone companies, then good luck. They are way behind in that regard.
 
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Vast majority of people don't know who makes the parts in their phones. You can bet the companies that do make them want their technology in the phones.

If Nikon is thinking bigger than just supplying parts to smartphone companies, then good luck. They are way behind in that regard.

It would be foolish of Nikon to worry about supplying parts to manufacturers of cellphones or other disposable consumer electronics such as cellphones. They would have to compete with Samsung and other top tier manufacturers. Nobody is willing to pay a premium price to have a Nikon label on an iPhone or Galaxy S4. We've already seen this trick done with other consumer electronics brandishing the name of some high-end audio company. Nikon won't go forward with this.
 
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It would be foolish of Nikon to worry about supplying parts to manufacturers of cellphones or other disposable consumer electronics such as cellphones. They would have to compete with Samsung and other top tier manufacturers. Nobody is willing to pay a premium price to have a Nikon label on an iPhone or Galaxy S4. We've already seen this trick done with other consumer electronics brandishing the name of some high-end audio company. Nikon won't go forward with this.

If they get in the smartphone market of actually making smartphones then they compete with Apple, Samsung, Microsoft and Google. So what's the difference between that and supplying parts for all the smartphone makers?


Who says there has to be a premium price? Well know companies provide components for smartphones but you don't see them labelled. Samsung makes parts for the iPhone but Apple doesn't market it. You can bet Samsung likes getting the business supplying those parts.

If they get into the smartphone market the choices are supply parts, make the phone, or come up with something new. It would be easier to come up with a camera phone and sell it directly to the manufacturers of established smartphone companies. The nikon president threw out the there were 720 million smartphones manufactured last year. If you were a camera manufacturer, wouldn't it make sense to get in on that action? Say nikon comes up with a 30-50 dollar camera component. They get a contract for 50 million or even 100 million. Big chunk of change.
 
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If they get in the smartphone market of actually making smartphones then they compete with Apple, Samsung, Microsoft and Google. So what's the difference between that and supplying parts for all the smartphone makers?


Who says there has to be a premium price? Well know companies provide components for smartphones but you don't see them labelled. Samsung makes parts for the iPhone but Apple doesn't market it. You can bet Samsung likes getting the business supplying those parts.

If they get into the smartphone market the choices are supply parts, make the phone, or come up with something new. It would be easier to come up with a camera phone and sell it directly to the manufacturers of established smartphone companies.

If you were Nikon you would be asking yourself "what is in it for us?" After you ponder the thought for a moment there really is nothing in it for them. Competing for market share in an arena filled with many great contenders with the same old stale products and ideas is foolish unless you bring something unique and earth shattering. No matter how good Nikon is or whatever greatness they bring into the arena they will always be the fish out of water. It ain't happening, sorry.
 
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If you were Nikon you would be asking yourself "what is in it for us?" After you ponder the thought for a moment there really is nothing in it for them. Competing for market share in an arena filled with many great contenders with the same old stale products and ideas is foolish unless you bring something unique and earth shattering. No matter how good Nikon is or whatever greatness they bring into the arena they will always be the fish out of water. It ain't happening, sorry.

Survival? The Nikon president has already asked that question and the future is with smartphones. Did you not read the article and what he sees the market as?

The big picture is the market is going highend with DSLR's and smartphones. Point and shoots are on the out.

Nikon is a camera manufacturer. Smartphones need camera parts. Some smartphone manufactures would love to be able to say camera made by Nikon.

Even now I see adds of smartphones where they brag about MP's or low light abilities. Nikon doesn't need to get into the smartphone business, just supply camera parts for them.
 
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Survival? The Nikon president has already asked that question and the future is with smartphones. Did you not read the article and what he sees the market as?

The big picture is the market is going highend with DSLR's and smartphones. Point and shoots are on the out.

Nikon is a camera manufacturer. Smartphones need camera parts. Some smartphone manufactures would love to be able to say camera made by Nikon.

Even now I see adds of smartphones where they brag about MP's or low light abilities. Nikon doesn't need to get into the smartphone business, just supply camera parts for them.

Yep, I read the article and I'm standing by my statement. This article is nothing more than Nikon thinking out loud. Nikon has always lagged in P&S sales for a solid decade because their cameras in that segment suck. When both my wife and I were in the market for P&S cameras we went with Canon. DSLR is definitely Nikon. I can't fault the powers to be at Nikon for daydreaming.:biggrin:
 
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Yep, I read the article and I'm standing by my statement. This article is nothing more than Nikon thinking out loud. Nikon has always lagged in P&S sales for a solid decade because their cameras in that segment suck. When both my wife and I were in the market for P&S cameras we went with Canon. DSLR is definitely Nikon. I can't fault the powers to be at Nikon for daydreaming.:biggrin:

Gotcha, so Nikon creating a whole new business section devoted to alternative products and new business models is just thinking out loud. :rolleyes:
 
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Gotcha, so Nikon creating a whole new business section devoted to alternative products and new business models is just thinking out loud. :rolleyes:

Only if they go ahead make something of it, which we both know they won't. Until then it is nothing more than thinking out loud.
 

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