Camera Market Health

What has happened to the Photography Industry so far in 2020? What does it mean for the consumer?

In June 2020, Olympus sells camera division so it’ll be shutdown and there won’t be any new Olympus cameras or lenses in the future, nor will there be any service available at some point in the near future. Since Olympus is Selling Camera Division, So What About Micro Four Thirds? I would never recommend m4/3. I’d either go APS-C like the Canon M50II or M6II or Full Frame now that prices of the Canon RP is only $900 and the Lumix S5 only $2000

In July 2020, the Nikkei Asia article, Olympus exit foreshadows a Japan camera sector shake-up gives an explanation of why there will be more contraction among camera manufacturers. Not sure what that will look like, but you’re safer with a Canon or Sony system unfortunately. I hate to leave Nikon and Lumix off my recommended list but not sure their camera division will be around in 10 years.

As of October 2020, as you might expect, sales are worse than 2019 and much worse than 2018. In addition to the steeply declining market for ILCs due to smart phone cameras and other factors, the COVID-19 pandemic made it that much worse. Mass unemployment, uncertainty about the future, the cancellation of weddings, sporting events, concerts, traveling, vacations, and the Summer Olympics decimated the demand for and sales of ILCs. Looking at the CIPA data below it’s pretty depressing. The first graph is digital still camera sales and the second is lens sales.

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2020LensesWhat does this mean for us the consumers? We should be aware of this since it should influence our buying decisions. We want to buy into a system that will be repaired, supported, see firmware upgrades, and new bodies and lenses being introduced. Canon and Sony should be okay due to diversification and market leadership. All others, not so sure. If a large company with a great product like Samsung can pull out of the photography market, smaller marginal players can too. Olympus already did. Nikon has some great new mirrorless cameras and lenses but I won’t buy due to past mistakes and the worry they might not be around in 10 years. Canon’s RF line is filling out and they have some compelling new bodies and lenses as does Sony and Lumix. The new Sigma L mount lenses look especially compelling. The L mount is probably the least popular sales wise, but I still plan to buy the Lumix S5 with the 20-60mm for $2300, Sigma 105mm Macro for $800 and 85mm f1.4 for $1200. These are all compelling products that competitors don’t currently match. In summation, Canon and Sony are your safest bets if you are most concerned about your camera brand continuing for 10 years or more.

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What has happened to the Photography Industry so far in 2019? What does it mean for the consumer?

Sales dropped 30% according to CIPA, In Jan 2019 Canon believes the market will plummet another 50% over just the next two years. This is reasonable since sales have dropped 50% from 2017 to 2019. In April 2019, Canon is planning to lower its profit forecasts for the 2019 fiscal year by 20% — amounting to approximately 50 billion yen ($446 million USD) — due to shrinking camera sales. As the CIPA data shows, shipments of digital still cameras with interchangeable lenses, built in lenses, and lenses are all down and will most likely continue to decline every year for a while. This is of course bad news if you work for these companies or hold their stock. For the camera and lens consumer? There are a few things to keep in mind:

  1. Crazy fire sales and depreciation. I paid $2300 for an EOS R in Nov 2018 and in Dec 2019 they are $1500 new and $1200 refurbished. Another example is the Lumix S1R that sells for $3697 new but can be bought in Dec 2019 from bandh refurbished for $1862 almost 50% off!!
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  2. Used gear prices are coming way down too. Selling used gear will be particularly difficult in 2020 and beyond. Don’t buy unless you absolutely need it and are going to shoot with it. It is best to buy used since if you need to sell it you won’t lose much money.
  3. Since sales are down, companies have to make more money from what they do sell so a new Nikon F mount 24-85 is $500 but the Z mount 24-70 f/4 is $997. It’s difficult to justify this price increase which of course leads to low sales figures.

Canon News on the state of the RF mount makes some good points worth reading.

The EF and F mount cameras and lenses are so good that it’s difficult to justify selling a full frame DSLR system and switching to a mirrorless system. You’d keep all your FF DSLR lenses anyways until the RF and Z mounts are fully equipped in like 2-5 years I’d guess. After a few years, FF mirrorless would be a better choice for a new FF camera buyer especially if Canon and Nikon stop updating the technology in their DSLRs but then consumers would buy an RF instead of an EF or a Z instead of an F. Better than buying a Sony, but still the camera market pie and slices will all shrink. Still, both Canon and Nikon had to launch the RF and Z lines for their own survival but for the camera buyer it’s a bit of a confusing time. As a buyer, if you’re confused what do you do? I’d guess just not buy anything and shoot with what you have.

Q: So what system should a FF buyer buy into?

A: Quality and feature set wise either Nikon or Canon.
Canon will most likely update some or all of their RF bodies to include image stabilization in 2020. Should you hold off? I dunno. I use a tripod so it doesn’t make a big difference to me. If you have a shoot then just buy, use it, and sell it when you don’t need it. That’s what I do.

A: Well, not Nikon if resale value or security knowing the company will be around in 10 years is important to you. However, if you find a really good deal on used gear that would make sense. Nikon gear depreciates faster and further than Canon and takes longer to sell. This is true for the SF Bay Area. This is a great example: This guy has been trying to sell these lenses for the last year on the sfbay craigslist. The 70-200 is an excellent lens with 5 star reviews and currently sells for $1396 at bandh. He’s only asking $700 with the tripod collar and has no takers. The 24-85 f/4 is $497 new and $220 used. He’s only asking $150 and has no takers.

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Screenshot taken 12.24.19

If you bought a Z6 or Z7 both of these lenses with the adaptor would be great but 6 months later even at more than a 50% discount off of new he still hasn’t sold them. I considered buying both and a Z6 but then just decided that my current 6D Mark II would be fine. He finally sold the 2 zooms for his asking price in January 2020 about 6 months since he put them up for sale, but in April 2020 is still trying to sell the 50mm.

Another example of fast and steep depreciation are used Nikon Z mount 24-70 f/4 lenses. $997 new but only $500-$600 used so a 40-50% discount.

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Nikon Z mount 24-70 f/4 used pricing. Screen shot taken 12.24.19

This is a confusing time to be buying into a full frame system. Is a new Nikon 24-70 f/4 Z mount worth $997 when a Nikon F mount 24-85 is only $497 new and $150-$250 used? Hard to make an argument to spend that much money so better to buy Z lenses used now that they are on the market for a 40-50% discount from new. Even when comparing used prices, is a Z worth $600 when an equivalent F mount is only $150? You can get a Z body and used F mount lenses to save money.

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When you can get the refurb for almost half that at $1862? Fire sales and depreciation are out of control in late 2019.

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There is a possibility of a camera company going under. If Samsung can pull out of the camera business, then I suppose anyone can. However, Canon and Nikon aren’t nearly as large or diversified as Samsung so their imaging products are a much larger percentage of their income. Nikon has 4 business units and imaging is 42% of their revenue. If they pulled out of the imaging business it would be difficult to survive. Canon also has 4 business units and imaging is 25% of their sales. Sticking with Canon or Sony is a safe bet, Nikon is more risky due to poor management and execution. Read Canon or Nikon for more details. As much as I hate to write this, sticking with Canon or Sony is a safer buy if you consider the financial health, future prospects, and past mistakes made by Nikon. Their new Z bodies and lenses plus the roadmap all look great, better than Canon, but sadly I don’t think it will change their financial future much.

What Happened to the Photography Industry in 2018?

Well, as you can see from the graphic below, not much good news the last 8 years for the camera industry. The original article is a good read over at LensVid.

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Some interesting points worthy of discussion:

  1. The Point and Shoot camera or ‘Non Interchangeable Lens Cameras’ sales have steadily shrank exponentially from 108,000,000 in 2010 to 8,600,000 in 2018. That’s a decrease of 100 million cameras in 8 years! With smart phone cameras getting better and better, and Point and Shoot technology remaining stagnant, I’d expect Point and Shoot sales to go to almost 0 at some point except for developing nations.
  2. Mirrorless Camera sales are growing very, very slowly, much slower than predicted.
  3. DSLR sales are decreasing steadily, a rate that is faster than Mirrorless sales are growing = a shrinking market for everyone.

So, the market pie is getting smaller. The slices are being redistributed with mirrorless growing slightly and DSLR slice shrinking faster, and point and shoots will be non existent.

Why does this matter to the consumer?

  1. I wouldn’t recommend buying a point and shoot. Phone camera image quality and convenience really makes a point and shoot obsolete except for rare cases like optical zoom or a water and shock proof sports camera.
  2. Buy the phone with the best camera. It will be the camera you shoot the most pix with. It is easy to upgrade either by selling on the open market of trading in your old phone on a new one through Apple’s trade in program. Of course no camera manufacturer has a trade in program…
  3. I would recommend sticking with a major player like Canon. If Samsung can just pull out of the camera market, any of the smaller players can too. Buying a lot of equipment from Pentax, Lumix, Olympus, etc. it’s more risky. Fuji makes such great cameras and lenses it’s difficult to say avoid them. Nikon too, but financially not sure they will make it and Nikon has made such poor decisions in the past, I’d avoid them.

In general, the vast majority of  consumers will be fine with the camera on their phone. I wouldn’t be too concerned especially if you stick with Canon or probably Nikon. The real question is should you get Canon or Nikon and a DSLR or Mirrorless? See these articles for more insight on answering that question.