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Sony now the market leader? (Looks like it!)

The latest financial results from Japanese camera manufacturers indicate that Sony has quietly assumed the mantle of market leadership in cameras from long time leader, Canon.

Canon camera sales fell below Sony’s in 2018, with the decline forecast to continue in 2019. (Source: Canon Global website)

The stark contrast between Canon and Sony photographic business unit results for 2018 are a leading indicator of a changing of the guard in camera manufacture. Canon’s Imaging business unit – comprising cameras and lenses, inkjet printers, scanners, projectors, broadcast equipment – didn’t have a great year, with a fall in net sales and a larger fall 32.6 percent – in operating profit. There was a drop in sales of cameras of 14.6 percent compared to 2017. Projections for 2019 is for the decline in camera sales to continue, but at a lower level.

 

Sony revised down its full-year sales forecast to 670 billion yen in its Q3 report. This is roughly more than 10 percent better than Canon’s camera sales performance. In fact, Sony’s 2017 camera sales bested Canon’s 2018 camera sales by around 60 billion yen! (Source: Sony.)

By contrast, Sony’s Imaging Products group latest results – the nine months from March – December  2018, show sales up by 23 percent and operating profit up 14 percent compared to 2017. (Canon operates on a Jan-Dec financial year while Sony’s runs from April – March.) Sony’s imaging business unit is almost entirely involved in the manufacture of cameras and lenses. It has a separate, 800-billion-yen business unit manufacturing imaging sensors.

Canon’s camera sales for Jan-Dec 2018 amounted to 600 billion yen – plummeting from 703 billion yen in 2017. Sony’s predicted sales from April 2018 to March 2018 are forecast as 670 billion yen, and it already has 516 billion yen logged from March – December.

Canon predicts camera sales of just 563 billion yen in 2019. (Sony has yet to publish 2019 forecasts.) On these official company figures, it would appear that Sony is already the world’s largest manufacturer of cameras. And that’s without the huge contribution to imaging technology from its advanced image sensors for itself and other camera manufacturers. It could thus be argued that Sony is the camera industry’s new market leader. (Nikon? Its imaging division has overall sales under 400 billion yen.)

And there doesn’t seem to be anything particularly magical up Canon’s sleeve to arrest the decline. Canon’s strength is in compact cameras and DSLRs – both contracting segments of the market. Canon attributed the drop in sales of Canon cameras in 2018 to market contraction, and pointed to full frame mirrorless cameras as a particular (‘urgent’) focus for 2019. But this is where Sony has established a dominant position.

‘Accelerating the expansion of our mirrorless lineup is a priority,’ the Canon report states. ‘The key to this is the EOS R, our first full-frame mirrorless model, launched in the second half of last year.’

‘…In order to further increase our presence in the mirrorless camera market, this year we will continue to expand our entire mirrorless camera lineup, consecutively launching new R-System products, including lenses.’

(Related story:Cheaper Canon mirrorless rumoured)

Not only will Canon have to take on Sony, which will be moving on to its fourth generation of mirrorless cameras in 2019, but Nikon, Panasonic and Olympus have also recently come out with well-received new mirrorless cameras. This is not to downgrade Canon’s undisputed strength among, and support to,  professionals, many of whom wouldn’t consider using any other camera.

All-new cameras
Canon’s other strategy to drive growth in cameras rests on the courageous decision to develop and launch new types of cameras.

Canon is hoping products like these will boost its flagging camera sales.

‘Due to the proliferation of smartphones, the number of people capturing images is increasing and this
is widening the range of users seeking image capture features as high zoom ratios and video functions.
In response, we are broadening our horizon with regard to image capture and will launch models that
don’t fall under the typical notion of what a camera is.

‘We showed several new concept cameras that were well received by young people when exhibited in
the United States last year…It will take some time before we see these activities contribute to our performance. We will, however, continue efforts to actively cultivate new users.’

– But mainly it’s about full-frame and mirorrless. In a Q&A document accompanying the annual report Canon stated:  ‘For cameras, amid market contraction, we urgently need to re-allocate our resource to categories that are growing such as mirrorless cameras and cameras incorporating full-frame sensors. And this is what we are currently doing.’

‘Urgent reallocation of resources’ doesn’t sound like the tactics of a company in full control of its destiny.  Certainly not in a leadership position. Sounds more like panic.

Canon has been the largest and most influential of the camera makers for such a long time now the notion that this may no longer be the case will probably take some time to factor in, but in raw sales terms, and looking at what Sony has going for it and Canon hasn’t in the immediate future, it’s worth considering.

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7 Comments

  1. Alan Small Alan Small 12/02/2019

    All of this has been totally predictable, and has been spoken about by experienced people for some
    years. We have learned very little about marketing photographics in this modern age. As people don’t
    drive, eat or require photo gear for medical use or to live in them , the only reason people will allocate hard-earned money to cameras and photo-gear, is for emotional reasons–the passion for image making, the ability to express themselves in a unique manner, the need to time-freeze and re-live special occasions.
    Companies like Canon have caught the Kodak disease which comes from being number one too long, although to be fair to Kodak they did at least create ” another Kodak moment.”
    Here are some key points:
    *lack of ongoing innovation and excitement.
    *not understanding that about 60% or more of all photographs are made by women.
    *ergo, heavy, old fashioned alpha male equipment will not appeal to women – or at least not for long.
    *chainstore marketing in an effort to be No 1, created an army of people who simply could not com mand that SLR two lens kit they bought ‘on special’ at a big chain, so they gave up and went back to their phones.
    *note that: we, this industry drove people to use their phones rather than a good camera, because reputable and skilled dealers were pushed aside by big bullies who simply wanted the cash.
    *lack of warranty – lack of empathy. Some cameras outside their warranty period were serviced by the maker for problems not created by the end-user, for up to half the original cost of the unit.
    *lack of dealers. Big makers, like those we are relating to, not only misused their market power to compete head-on with the very dealers who helped build their business, but undercut many valuable dealers through their discount chainstore strategies. Lack of dealers = lack of clients. But also
    lack of margin at dealer level meant fewer highly experienced sales people. Less information and training, or even setting up the camera correctly. Again less satisfied customers.
    *The only passion we as an industry have created, is to get the best price possible as opposed to good value. That has increased the army of people who simply don’t know what they are doing with a modern camera and so the downward decline continues.
    *Suppliers simply manipulate the market to their ends, not to make the pie larger.
    A commission of enquiry into the supply chain and retail industry (across the board) would reveal
    much greater anomalies and dishonest behavior than the banking industry, particularly by
    vertically integrated international companies.
    *lack of reliability and durability in quite expensive products, including so-called high grade lenses,
    has left a sour taste for quite a few people, especially when some of those issues were design
    problems rather than use. There is no evidence anywhere of rectification of design problems, as is required in the auto industry. Link this to inadequate warranties – two years on say a $4000.00
    camera, whereas a low cost motor car might get you five to seven years. (A $4000.00 camera should equal a $50K motor car)
    Like climate change, the bell is tolling for this industry and it needs a whole re-think. AS

  2. James Madelin James Madelin 12/02/2019

    Great comment above, AS!

    I’m curious…. are there any stats about actual number of units shipped these days? “Billions of yen” is interesting from a relative perspective, but would be fascinating to know the actual number of, say, compact and DSLR/Mirrorless shipped.

  3. Evan Williams Evan Williams 15/02/2019

    Canon is a misguided dinosaur. Their Mark Iv was a huge miss for still photographers after 5.5 years of wait. Great, 1 stop of extra ISO improvement – who cares? Canon is still trying to make money by using image stabilizAtion in lenses and charging $500-1000 more in some cases. Sorry but they don’t care about still photographers much anymore. I am a Canon shooter and will be switching to Sony.

    • David Reynolds David Reynolds 19/02/2019

      I came to the same conclusion last year and switched totally to Sony.
      I have no regrets apart from the financial loss incurred but that is outweighed by now using equipment which is lighter and more innovative. While the respective image qualities are very subjective and quite different in many areas the result is still acceptable.

  4. Matthew Matthew 20/02/2019

    This graph is looking at Sony’s Image Products and Solutions segment which includes cameras, lenses, video products and software. This should be compared to Canon’s ‘Imaging Division’ results which has a Sales result of 1,008,165 Million Yen (Profit of 116,995 MilYen) compared to Sony 670 Million (Profit of 78MilYen).

    See the whole graph (not the selectively cropped graph your source presents) on page 10 of:

    https://www.sony.net/SonyInfo/IR/library/presen/er/pdf/18q3_sonypre.pdf

    Canon’s results for imaging is on page 9 and 12 of:

    https://global.canon/en/ir/results/2018/rslt2018e.pdf

    The Sony graph also shows that Sony moved 3.6 million cameras est up to Feb compared to 4.4 million in 2017. These are ALL cameras including ILC and compact. Note that Canon moved 5.04 million ILC cameras alone (excluding compacts) – way more than Sony’s total numbers.

    https://www.canonrumors.com/canon-inc-full-year-2018-financial-results-and-thoughts-on-the-industry-and-future-goals/

    Look at this article and you will see how much camera sales has shrunk for Sony in the last couple of years – and you won’t like it, but it is in real danger of being closed down.

    https://www.bloomberg.com/news/articles/2018-05-20/new-sony-ceo-to-detail-shift-away-from-gadgets-in-mid-term-plan

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