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Nikon to reconsider Nikon 1 plans

Nikon has followed Canon in significantly cutting its operating profit forecast, with Nikon president Yasuyuki Okamoto noting that interchangeable lens mirrorless camera sales had been disappointing in Europe and the US.

Great White Hope: Nikon is disappointed with sales of its Nikon 1 system cameras.
Great White Hope: Nikon Japan is disappointed with sales of its Nikon 1 system cameras. In Australia J1 sales have been strong and V1 sales below expectation.

Nikon revised its profit forecast down to 65 billion yen ($740 million) for the year to next March, a reduction of nearly one-quarter from a forecast issued three months ago. Nonetheless, if it delivered the newly-forecast result, it would be a be a rise of 27 percent from a year ago.

Beyond the basket case which is compact camera sales, the Nikon 1 interchangeable lens system seems to be the worst-hit category, with Nikon revising its units sales of interchangeable lens cameras (DSLR and mirrorless) in the year to March 31, 2014 down by 550,000, with the Nikon 1 representing ‘the majority of sales volume reduction’.

‘‘[The] non-reflex camera market growth shows deceleration,’ Nikon noted in an investor relations presentation. 

‘In Europe and the US, the ratio of mirrorless to SLRs hasn’t grown at all, unlike in Asia, where it’s quite popular with women because it’s light. We had higher expectations for other regions,’ said Mr Okamoto. ‘But people who like cameras tend to just go for SLRs, even though they’re very heavy.’

As a consequence, Nikon says it wants to ‘accelerate shifting newer products in the entry class of DSLR’ and, ‘reconsider product planning of Nikon 1′.

Nikon Australia is more positive about the prospects of Nikon 1 in the local market, seeing the new mirrorless category as still a work in progress.

‘Certainly the mirrorless category is not reaching the growth numbers the industry expected – but does this reflect lack of consumer interest or lack of consumer awareness?’ asked James Murray, general manager, Sales & Marketing, Nikon Australia.

‘In Australia, J1 sales have been very strong and V1 below expectation. We are now in model transition to J3, while the V2 launched a few months back,’ he explained. ‘More and more lenses have been added recently, incorporating key Nikkor technologies such as NANO coatings.

‘The early days of Nikon 1 and other mirrorless cameras were heavily focused on price, rather than the consumer really understanding the user benefits of, in our case, Nikon 1.

‘With further education we believe that the benefits can be better understood and in future price won’t be the sole deciding factor.’

Nikon (Japan) says it sold 80,000 fewer interchangeable-lens cameras and 60,000 fewer lenses in the three months to June 30 than in the same quarter the previous year.

Compact cameras plans will also be re-examined. Sales of compact cameras, in volume terms, fell 30 percent.

‘Although our market share had been expanding in recent years, sales volume will diminish  more than the estimated market shrink,’ the investor relations presentation stated.

Nikon is not alone in being disappointed in the success to date of the new camera segment.

For the first six months of 2013, mirrorless interchangeable camera sales have fallen 18.5 percent globally, according to data from the Camera and Imaging Products Association (CIPA). (Compact camera shipments plummeted 48 percent for the full six months!) .

Olympus Corp said last week that sales of its mirrorless interchangeable PEN models had also fallen 12 percent in the first quarter. 

‘For the future of our industry we all need to learn how to engage and inspire consumers more positively and not only ‘supply’ what they already know or demand,’ said Mr Murray. ‘This is our job as suppliers and retailers alike!’

Click here to access the Nikon financial presentation.

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