Industry Consolidation - Where will Nikon Be in 2 Years?

[Deleted User]

Given the recent Nikon financial news and projected decline in sales of non-phone camera equipment over the next several years, where do we see Nikon headed?

Without some significant new technologies (ai in combination with drones - shoot great images vicariously while you sleep at home!) or unusually convincing enhancements of existing tech, to
maximimuze SH value, one or more photo industry companies should consider mergers to survive. Consolidation or company failures may become evident sooner than we think. Does a Nikon merger with a competitor make sense? If so, who and why?

Nikon downsizing to respond mostly to growing markets (India?) will not be enough to
maintain gross revenues and assure survival. Contribution margins of product lines will become smaller, contracting operating income. Lesser SH value if revenues and EBITA declines.

Looking carefully at videos of Nikon engineers discussions of various products over the Nikon lifespan, they reflect a culture of slow but laudable progress in producing competitive products. Trouble is, Nikon can no longer readily distinguish it's products from Sony, Sigma and Canon, as the wild dogs have continued to nip at Nikon's heels, I believe its cameras are still mostly best in class, but demand us deteriorating from sexy offerings from Sony and Fuji.

Given that Hasselblad has thus far survived a disastrous 10 years by accepting capital from Chinese firm, I don't necessarily see Nikon declining into oblivion; but I do not have a crystal ball.

Thought?

Flip

sport

Nikon is going to get smaller and more focused moving forward. The problems that Nikon appears to have are all fixable. They produce very competitive products and hold a sizable market share. If they can get the development cycle times reduced, focus on raising quality and get their marketing department figured out they get through this just fine.

If they continue to keep all of their products in silos and micromanage them to death then they will go into a real slow death spiral.

heartyfisher

my Nikon camera will still be working...

Pistnbroke

We would all be unable to say where we will be in two years let alone Nikon.
All we can be gratefull for is that its aniverary year so they must do something. Must they?

PB_PM

Nikon needs to simplify more than anything else if they want to survive. Merging with one of the smaller market players wont fix any of Nikon's problems, and I don't see them merging with Canon or Sony.

Part of Nikon's problem right now is there are a ton of older products on the market, due to overproduction that occurred right when camera sales started to dip. The fact that the D3300, D5300 and D610 are still available new is just a hint of that. These products should be pushed to the lower end markets, and removed from sale in the 1st world nations.

Nikon needs to innovate, not iterate for once. Re-badging the same camera with a different set of gadgets every 12-18 months just isn't working. They need to develop cameras to last 3-5 years, not 1-2. Why? There isn't enough changing tech wise in cameras. Longer cycles mean saving on R&D. Maybe throw in a "s" model in-between with a new sensor/processor and nothing else (no need to reinvent the wheel with a new body design each time).

Will mirrorless save Nikon? I doubt it to be honest, they missed that boat and there are still too many issues with mirrorless (battery life) to make them worth replacing a DSLR with.

New development/sales team motto: "Less is more"
1. Kill off point and shoots altogether (other than maybe 1 or 2 super-zooms and waterproof), stop wasting R&D

2. D3xxx and D5xxx lines need to merge into one camera, mirrorless most likely $499 max

3. D7xxx & D500 stays the course, big sellers with enthusiasts and lower end pros $999 and $1599 price targets.

4. D610 & D750 Just one camera to replace both, $1599 price target

5. D8xx Stay the course $2999 price target

6. Df Kill it. Good idea, poor implementation

8. D5 Style body needs innovation, cameras the size of a tank need a rethink. No need to drop the build quality, but something needs to change or these types of camera will go the way of the dodo bird (which would be sad, since performance is important).

heartyfisher

who would you consider to be smaller market players? I think just about everyone is bigger than Nikon.

PB_PM

Pentax (Ricoh), Panasonic, Olympus, and Fuji are all small market players and have around 10% market share combined (in terms of cameras). Nikon (28%), Canon (52%) and Sony (8%), so they hold 90% of the market.

heartyfisher

but most of those companies themselves are much larger than nikon... so a buyout of nikon could be beneficial to both... The buyer gains the market share and nikon gains a bigger backing. Fujifilm for example is a 118 billion yen company(2015) while nikon was 3 billion yen this year. Nikon gains mirrorless expertise.. as well as more sensor and colour expertise. Not to mention some nice mirrorless DX glass.

manhattanboy

Nikon should not be bought out by another camera company. If it is bought out by anything it is going to be some robotics, aerospace or medical company looking to bring in optical and image processor expertise to help with some other problem. For example, imagine a lens that needs to focus on distant objects to help self-navigate around targets and would need Nikon's AF and tracking expertise; this could be useful for a high speed craft or even a robot trying to pick up rapidly moving objects.

Photography would then become a hobby kind of like Ricoh. Unfortunately for Nikon, Sony seems to have learned some of their trade secrets from working with them and is going to be the dominant supplier of image processing hardware in the world. Nikon needs to look more carefully at how they can turn their core competence in optics into a competitive advantage for imaging, be that specialized lenses and micro lenses that are attached to the processor, building in their AF tracking chips, etc.

SouthSideScubaSteve

manhattanboy said:

Nikon should not be bought out by another camera company. If it is bought out by anything it is going to be some robotics, aerospace or medical company looking to bring in optical and image processor expertise to help with some other problem. For example, imagine a lens that needs to focus on distant objects to help self-navigate around targets and would need Nikon's AF and tracking expertise; this could be useful for a high speed craft or even a robot trying to pick up rapidly moving objects.

Photography would then become a hobby kind of like Ricoh. Unfortunately for Nikon, Sony seems to have learned some of their trade secrets from working with them and is going to be the dominant supplier of image processing hardware in the world. Nikon needs to look more carefully at how they can turn their core competence in optics into a competitive advantage for imaging, be that specialized lenses and micro lenses that are attached to the processor, building in their AF tracking chips, etc.

During the 70's, Honeywell bought Pentax, used some of the patents for some of its existing businesses that needed them (think government contracts) and then sold the Pentax brand off .... I know this because my father worked for another Honeywell division and purchasd one of the "Honeywell Pentax" K series camera's during that time (it's the first SLR I touched/used and probably has a lot to do with my intrest in photography). I could be wrong, but my impression is that Pentax never recovered from that period of it's existance; I hope the same doesn't happen to Nikon!

[Deleted User]

But in reality, where is the new tech in photography coming from? Lighter, more compact, better optics, but what else?

Will/should we allow A.I. to play a role in determining what to photograph (parameters as set by the photographer) and the photog determines where to send the camera/drone?

Can Nikon and others write algorityms which can interprete images with aesthetic appeal and take away the direct experience of the photographer? Do we want that as photographers?

Take Iceland or Grand Canyon aerials for instance. Why not just send our large drones aloft with the best resolving cameras and lenses having adjusted the SW to a range of colors and compositions compatable with the photog's vision, letting AI control the image taking? This in lieu of the photog taking a D810 or MFD with the best af primes or zoom lenses and shooting from a helicopter or small plane.

I personally find such scenarios endlessly appealing provided the photog's aesthetic can be translsted into the AI.

Of course another option is to control the image taking of the camera/drone system by way of some optical view control (operator controlled shutter release through sophisticated visually enhanced remote system).

A Chinese company has started to provide drone travel to humans. Rsks abound, but it is the start of a revolution in mobility and expediency with significant ramifications to personal privacy issues. I suspect we have only seen the tip of the remaining icebergs with the potential for this technology.

Thoughts?

spraynpray

I think contraction/refocusing along the lines of PB_PM's post above. At least I hope so. Having the low end cameras just doesn't make sense these days and will make less sense going forward.

HipShot

Nikon + Sony: Sokon? Sonykon?

Nikon + Fuji: Fukon?

Nikon + Canon: Can-o'-kon?

Nikon + Polaroid: disaster.

Etc...

PB_PM

heartyfisher said:

but most of those companies themselves are much larger than nikon...

You do realize that Nikon is part of the Mitsubishi group and not an independent company right?

[Deleted User]

You're suggesting Nikon can raise sufficient capital as needed?

PB_PM

We need to look at this way, Nikon has always been a small company and yet they have survived 100 years, some of that was not in the camera business mind you.

Do I think Nikon will still be around in 5-10 years? If they innovate rather than beating a dead horse? Yes. If Nikon focuses on what it does well, mid-high end cameras and optics then yes they will survive. If they keep trying to hit every possible camera market segment? No.

The latest blog post here seems to indicate that Nikon will be doing just what I suggested, fewer models, mid-high end DSLR's and mirrorless cameras. If they can execute that well, I think Nikon will be around for many years to come, if not they will go the way of Minolta.

snakebunk

I think Nikon should do something like this:

0. Focus on cameras and lenses for photographers and don't compete with phone and fun stuff markets.
1. Start replacing low end dx dslrs with a mirrorless dx format system.
2. Start making competitive lenses (right now Nikon has lost it to Sigma and Tamron). Be inovative, make more long pf lenses and leverage on other useful new technology.
3. Continue developing high end fx dslrs (750, 810, 5), and one high end dx dslr (500).
4. Develop new mirrorless medium format system to replace fx dslrs. But only when the technology is good enough.
5. Invite third parties to make lenses for the new systems, in a controlled and licensed way. It will give Nikon a unique position.

Good luck Nikon! I think and hope that you will do well two years from now.

BabaGanoush

PB_PM said:

You do realize that Nikon is part of the Mitsubishi group and not an independent company right?

Actually Nikon IS an independent company, one that belongs to the Mitsubishi keiretsu. As Thom Hogan explained the situation in a post back in 2013:

"Is Nikon a subsidiary of Mitsubishi? A controversial question because to fully understand the answer you need to know about the keiretsu structure and how it changed both prior to and after World War II.

"But the basic answer is, no, Nikon is an independent company with its shares publicly traded on the Nikkei.

"In Japan there is a history of "company groups", or keiretsu. A keiretsu is basically an affiliation of complementary companies, usually with interlocking business relationships and share holdings, For example, former Mitsubishi-owned companies, in particular what is now Bank of Tokyo-Mitsubishi, hold a percentage of the outstanding shares in Nikon (<5% the last time I looked). "

MegapixelSchnitzel

snakebunk said:

I think Nikon should do something like this:
...

4. Develop new mirrorless medium format system to replace fx dslrs. But only when the technology is good enough...


Good luck Nikon! I think and hope that you will do well two years from now.

This! I would like to see Nikon get really serious in the professional/commercial/studio market. They have the technology and capability to run with Fujifilm and compete toe-to-toe with Hasselblad - if only they would.