It wasn’t that far back when pundits were predicting the decline and fall of the DSLR and that mirrorless models (let’s call them CSCs: compact system cameras) would come on so strong they would overtake and replace the “bigger and heavier” DSLRs.
The new cameras were exciting and, initially, considerably more compact and lighter. They also had a new tech sizzle that lured the early adopter crowd. Well, the CSC takeover of the interchangeable-lens camera (ILC) market hasn’t happened—and isn’t likely to happen soon, if at all. Emotionally, it seemed like CSCs were garnering all the headlines, and developmentally, at least, there was certainly a lot of action. So, what happened?
One tip-off for me was when I attended the GfK meetings (a respected German market research firm) at photokina last fall. I have to admit I was surprised to learn that worldwide sales breakdowns showed DSLRs outselling CSCs nearly three to one. You see, I was one of those guys who assumed CSCs were going to be the next big thing, and there was more of a horse race going on.
As it turned out, the numbers were skewed by the Japanese market, which had a 40/60 CSC/DSLR percentage split. Worldwide, the Japanese numbers were an anomaly, with the most recent numbers from CIPA (the Japanese Camera & Industry Products Association) showing a global split of 22/78 (CSC/DSLR). But the numbers that really bowled me over are those for the USA: a 15/85 percentage split.
When you drill down into the charts, you see that CSC sales have grown somewhat while DSLR sales have dropped a bit, but percentage of growth and unit sales volume are two different matters. And one has to take into consideration that CSC sales started low, and for a good while the DSLR was the only ILC game in town. Yet, in essence, the percentage of unit sales in a category indicates market penetration as much as anything else, and 15% does not a takeover make.
Said Masahiro Horie, director of Marketing and Planning at Nikon Inc., “While growth has been slower than expected, it is worth noting that the market segment is experiencing growth. . . . In the U.S., body size is less important to consumers, and the DSLR is still a popular choice.”
To see what else might be behind those U.S. numbers, I called Ed Lee, group director of InfoTrends’ Worldwide Consumer and Professional Imaging Services. He confirmed the figures and said, “We don’t see those numbers moving up for mirrorless anytime soon, if at all, and don’t see them getting out of the teens until at least 2020.” I asked why he thought this was so.
Lenses a Key Factor
“The appeal of compact system cameras,” said Lee, “is supposed to be that they are smaller and lighter in weight but still offer interchangeable lenses and high quality. The fact is that many new DSLRs are smaller and lighter, which has blurred the lines between them. And many buyers have legacy lenses, or lenses given to them by family members from their SLRs that fit those smaller and lighter DSLRs. Lenses are a key factor here.”
This is certainly on the minds of those companies with a deep investment in CSCs. Ryouichi Takamoto, product manager at Fujifilm, sees this as an essential part of growing the company’s sales. In essence, there are many advantages to having a camera system designed “from the ground up” with a coordinated lens system to go along, yet you have to have a lineup of various lenses to fulfill the needs of the customers.
“We understand customers may need to invest in a whole new system and new lenses,” said Takamoto. “Yet the lens design is specific to the camera system, processor, mount and positioning, so we offer very high image quality with our X-series cameras.
“It may take time—the X series is only three years old—but we believe that when photographers experience the quality and word gets around, and the cameras get into photographers’ hands, we will grow market share for our cameras. Certainly having an expanded lens assortment is an important factor.”
Nikon’s Masahiro Horie told me, “Nikon has a long legacy of optical excellence, and in developing the Nikon 1 system we engineered the FT-1 mount adapter for Nikkor lenses.” This accessory adapts those legacy lenses to Nikon 1 cameras, albeit with a focal length multiplication factor, which would seem to give Nikon a leg up on the legacy lens issue. Yet, there are also numerous adapters from Novoflex and Voigtländer to mate all manner of lenses to other brands, although many necessarily do not mate with the host camera’s automation.
Speaking of lens compatibility, I asked Ed Lee about Micro Four Thirds, what some considered a sort of universal (or at least an attempt at that) mount, and if that might make a difference in the lens issue. Has the MFT approach caught on and might it be a good move for more manufacturers? “When we poll consumers,” he told me, “Micro Four Thirds scores probably the lowest awareness—six years later it has no traction in terms of awareness.”
Lee went on to say, “Overall in the marketing of CSCs, with different sensor sizes, focal length equivalence issues, and companies switching out mounts from one year to the next, we have absolutely confused the consumer.”
Could it be that competition among CSC makers and the proliferation of lens mounts has indeed confused the customer to the point where they don’t know who’s going to stick around and who’s going to commit to a full line of optical options?
If you look at the independent lens makers, necessarily cautious about all this, they haven’t been exactly rushing CSC mount lenses to market. A quick check shows the following, as of this writing: Zeiss (Sony, Fujifilm); Sigma (MFT, Sony); Tamron (Canon M, Sony, MFT); and Tokina (a 300mm telephoto mirror lens for MFT).
Customers know that camera models come and go, but lenses tend to stick around for a long time. So, perhaps the DSLR seems like a safe harbor, a friend the consumer knows, in the stormy interchangeable-lens camera seas.
Nikon’s Horie stated unequivocally, “Nikon is committed to supporting the Nikon 1 system and its customers.” Yet, one company that came in with a CSC and then withdrew it from the U.S. market was Canon, who knows a thing or two about the interchangeable-lens camera market. Chuck Westfall, advisor at Canon’s Professional Engineering & Solutions Group, told me the initial offering, the Canon M, was discontinued six months back in the U.S. and that Canon has no plans to continue CSC distribution here. Their new M2 will be available only in China and Japan. In the U.S., the company will be fully concentrating on its DSLRs, including the Rebel, the 70D and the 7D Mark II. “While there seems to be a lot of excitement and talk about these [CSC] cameras, the sales figures simply do not bear that out,” he said.
Zero Sum Game?
Some marketers think that market share in the days of declining overall camera sales is a zero sum game—that is, there is a fixed amount of buyers and only fierce competition will sort out winners and losers. We have seen marketing from some companies heavily into CSCs that treat the DSLR as the antagonist in the battle for the hearts and minds of the consumer. One campaign shows a stooped and labored photographer shedding his cumbersome DSLR and then walking upright with the newfound freedom of his CSC—a clever visual pun on an evolution poster at a natural history museum. Another blatantly tells consumers to “Ditch the DSLR” and hosts “Ditch Days” where consumers bring any working DSLR and get a new Samsung mirrorless camera.
“Right now,” said Nikon’s Horie, “our main competitors for the Nikon 1 system of cameras are other CSCs.” But it must be said that some makers, those whose only skin in the ILC game is the CSC, are taking that zero sum approach. “If you look at the interchangeable-lens market of the past 15–20 years, it’s been Nikon and Canon, and penetrating that market is a challenge for other companies,” said Canon’s Westfall.
Ed Lee sees the zero sum approach as detrimental to the industry. “To me the argument pitting DSLRs against CSCs is not helpful. They just happen to be two types of cameras with interchangeable lenses that serve and appeal to different consumers in different ways. I think we should move away from thinking about one versus the other and see how they could complement one another. And as more lenses and improved finders arrive, we should see some growth in CSCs. Yet I think it’s a mistake to create a one versus the other approach.”
Matthew Schmidt, senior manager, Corporate Communications, at Fujifilm, seems to agree. “Of course our aim is to grow market share, but we don’t see this as an all or nothing matter. We see our X-series cameras as a complement to the equipment owned by a DSLR user, and as a system that can stand on its own and deliver great image quality. Part of our marketing strategy is to establish a direct relationship with photographers, and as more photographers experience the value of the system, and as we grow our lens lineup, we will see its use and acceptance grow.
“In a sense, the market is a multiple camera ecosystem. Each camera meets the needs of consumers to match their lifestyle, and photographic style. We expect it to mature and grow in the years ahead. That growth will come from new customers seeking higher image quality, those who switch from their DSLR, and those who want to complement their DSLR with our cameras.”
Said Nikon’s Horie, “We see Nikon 1 customers as active and [as those] who value portability, speed and ease of use, which are hallmarks of the Nikon 1 system. Consumers have a lot of options for their image capture; we obviously see a healthy market for the entry-level and enthusiast DSLRs, which are familiar to U.S. consumers, but think there is still a lot of growth potential for the CSC market as well. We have also found that enthusiast customers are looking to the Nikon V3 as a companion to their DSLR cameras to supplement their day-to-day photography.”
“It’s our job to continually point out the quality and visual opportunities of the interchangeable-lens camera,” said Canon’s Westfall. “We can’t be narrow in our approach and think the ILC world is just composed of Nikon and Canon. It’s our task as a whole to draw the consumer into the ILC world. Yet, we also have to be continually aware of ways to improve our cameras in terms of AF performance, the overall form factor and ease of use, and making the camera something people can enjoy using regardless of the kind of images they make. If they don’t or can’t enjoy the experience, then we will cede the photo market even more than we have already.”
In my experience, pros and certain enthusiasts have taken warmly to what CSCs have to offer. They love the ability to adapt, for example, older Leica lenses to new Sony models, and especially the fact they can use the CSC, rather than a full-frame DSLR, as their walk-around camera and still get great image quality. But so far, this enthusiasm has not translated into ramping up CSC sales percentages.
With smaller and lighter DSLRs, the inclusion of new and exciting tech in both types, the highly attractive premium compacts available today and, of course, with the leverage of legacy lenses weighing heavily in some buying decisions, the mirrorless CSC category has some challenges ahead.
As to the industry banding together to fight the challenge posed by increasingly sophisticated smartphones for the hearts and minds of those who make lots of images and communicate with them, I’m certainly not predicting a Kumbaya moment among the ILC contenders. But no one I spoke with wants a Pyrrhic victory either.
As Ed Lee suggests, “Interchangeable lenses and image quality are what we should be selling as a value proposition of the industry. And as sales of ILC cameras grow, lenses and accessories will follow, and that’s good for the industry as a whole.”