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Camera hardware is still in crisis

One of the most popular opinion articles on this site is from January 2018, where we discussed “Hardware in Crisis: Can Cameras Companies Compete.” We also followed up with “Six ways digital cameras should be competing with smartphones“, which mentioned ways digital cameras are superior to smartphones, including battery life, but added digital cameras still trail smartphones in key customer-loving metrics like connectivity, apps, and UI.

Nearly, 18 months later, the answer not only seems to be “no,” but “hell to the no.” Yes, there have been some moderate changes here and there, especially with Canon’s efforts to foster a developer community. This effort has already borne fruit in the volume photography space. Other than that, however, today’s digital cameras are still not competitive with smartphones. In the months since publication, digital cameras – whether it’s a compact camera, a DSLR or a mirrorless camera – still follow the same “capture-store-share” paradigm from the analog photography days. Despite having tremendous on-board computing power, DSLRs/mirrorless cameras don’t do much other than process images. User interfaces continue to confound casual users. There are still no popular native apps on cameras.

The licensing trend

As DPReview reported, Nikkei Asian Review Deputy Editor, Masamichi Hoshi, has written an article outlining a grim picture for the future of the Japanese camera business, including Olympus’ recent sale to private equity firm, Japan Industrial Partners (JIP). The usual suspects are mentioned: the rise of smartphones and the ongoing COVID-19 pandemic.

“Japan’s digital camera industry was once considered on par with the country’s auto sector in terms of international competitiveness,” says Masamichi. “But smartphones have driven camera makers to the brink of extinction, and this year the novel coronavirus slammed the already hobbled industry.”

But, Masamichi provides this valuable insight:

‘Smartphones are not the only reason Japanese camera makers, who had established an oligopoly nearly everywhere around the world, have come to this point. Japanese industry, which has a penchant for competing against its own products, can also blame itself.’

The article mentions as the Japanese camera market continues to struggle, camera brands may pursue licensing and contract-manufacturing arrangements. Polaroid and Kodak have gone that route for many years. As the Japanese camera companies make more of their profits from high technology, office equipment, printing and other segments, it’s quite possible more brands will choose to just license their trademark and collect royalty checks.

The problem isn’t quality

Camera manufacturers haven’t learned yet which battlefield they are fighting on. Cameras are still closed-loop systems designed to keep the customer in the fold. The big selling point seems to be quality, either in the form of megapixels or lens quality. Realistically, though, DSLRs and mirrorless cameras are all universally excellent quality. There isn’t a stinker in the bunch. There isn’t a camera on the market that isn’t suitable – if not ideal – for the average user.

Competing on quality is important but it’s a less important distinction to today’s consumers than the overall experience. We are far from the days where buying a third-party lens was a risky proposition. That’s when informed reviews in the photo buff magazines were incredibly valuable to discerning shoppers. Today, crowdsourced reviews are sufficient for most shoppers. In fact, they prefer them.

On a feature parity standpoint, digital cameras just aren’t competitive in today’s photographic experience. They lack connectivity; WiFi or Bluetooth connectivity tools built into a camera body are a nice first step but it’s a kludge next to 4G and soon 5G connectivity. The trend embraced by Fujifilm, Panasonic, Nikon, Sony and Canon for allowing mirrorless cameras to act as webcams is a nice upgrade; wouldn’t it be a better upgrade, though, if they could stream live from the field?

Think of the product categories replaced by the smartphone: MP3 player, calculator, pocket flashlight, home computer and, increasingly, the family camera.

The mass market is a waste of time

Endangered species?

I constantly hear from camera marketers who say mirrorless cameras are “the perfect step-up” devices for smartphone users. Is this really happening? I am not saying mirrorless cameras aren’t great cameras but if you have a recent-era smartphone, what advantages do DSLRs have in 2020 for the average consumer? I am talking about the mom who used to buy the Canon EOS Rebel to get pictures and videos of their kids’ activities. She’s probably better off buying an iPhone 11 Pro to capture little Suzy’s recital. Mom can send images to friends and family right from the parking lot outside the dance hall. In the DSLR/mirrorless scenario, she has to choose photos on the camera’s screen, ping them to her phone with an app, apply any filters or corrections there, then send them. That’s way too many steps for today’s busy connected mom. (Oh, and she’s still not done. She still has to load those photos onto a laptop to create anything else with them.)

Last week Nikon debuted the Nikon Z 5 full-frame mirrorless camera, which is described as an “entry-level” camera. There is nothing “entry-level” about a $1,400 price point for just a camera body. For that kind of money, a person really interested in photography can buy a high-end smartphone with multiple built-in lenses and 256GB of storage and still have money left over for a GoPro. They can also pay for it in installments. For the $1,400 for that Nikon Z 5, you still have to buy lenses, a spare battery, and a memory card. That “entry-level” experience is really $2,000; add on to that the cost of a Mac or Windows computer and image-editing software and this “hobby” has moved into a lifestyle.

You’re a sports car in a Toyota Corolla market

DSLR and mirrorless cameras are now premium products. The Japanese camera industry should recognize this and position themselves that way. Leica Camera does very well by understanding its products are not for everyone. Interestingly, the new CEO of Leica Camera in the United States has a background in luxury goods retailing, not photography.

As an upscale item, the Japanese cameras would then be more viable for camera dealers. It’s no secret camera retailers have struggled for years to compete with internet-driven retailers and big-box retailers. Making $30 profit on a $1,000 camera body is not appealing to a retailer in the best of times and, add on to that the onerous rebate procedures, it’s no wonder camera dealers rely on sales of camera bags, memory cards, and filters to just make the category palatable.

The internet is the brains

As we mentioned above, internet connectivity is now table stakes for consumer-electronics devices. Camera manufacturers still cling to the “capture — process — share” workflow. A camera today has a lens, a processor, and some storage. The images are later offloaded onto another device for processing and for editing. The future of photography is artificial intelligence, but the digital camera is barely sentient. With powerful onboard processing and a live cellular internet connection, the digital camera could add meaningful location data to add in sorting images and in telling meaningful stories. This is already being done on smartphones. DSLRs and mirrorless are also excellent video-capture devices, why not add on-board basic video editing? Smartphones have offered video editing since the mid-2000s on devices with small screens, little memory, and anemic processors. Indeed, Sony and Panasonic have both introduced cameras geared toward “vlogging,” so they recognize the market is there. Too bad the hardware potential is unrealized.

Wouldn’t it be a better experience for the Mom mentioned above if, after capturing her daughter’s recital, her DSLR’s onboard computer sifted through the pictures, selected the best ones, discarded the bad ones, and automatically created a video slideshow or photobook? The processing power and intelligence are already there.

Think of it this way: What if smartphones were invented before digital cameras and the “new digital camera” was introduced? What do you think the response would be? Would digital cameras be lauded for their ease-of-use, convenience, or connectivity? Or would they be slammed for their expense, cryptic UIs, and steep learning curve?

Where would you place your bet on future success?

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One thought on “Camera hardware is still in crisis

  1. This is a fantastic and profound analysis of the camera industry.

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