Hardware in crisis: Can camera companies compete?
The hardgoods part of the photo industry has always been highly competitive and price sensitive. Accessory sales prop up profit margins, as dealers rely on photo printing, lenses, bags, tripods, filters and other add-ons to build comfortable margins. It’s not unusual for an independent dealer to make $50 or $60 on the sale of a $1,200 DSLR body.
This is not a new trend. Even back in the heyday of the 35mm SLR, accessories and photofinishing supported the bottom line of the camera business. New cameras built traffic, but accessories, film and photofinishing built profits. With digital technology, however, film and photofinishing profits have declined precipitously and the hardgoods market is ever-more competitive, with consumers having the choice of local photo retailers, big-box stores, online sites, and even manufacturers’ own stores.
[bctt tweet=” New cameras built traffic, but accessories, film and photofinishing built profits. ” username=”DeadPixelsSocty”]
The challenge for camera makers is to become more relevant than smartphones and be as innovative as VR/AR companies, while dealing with razor-thin profits of their own. It’s no secret Canon, in particular, is looking for innovation outside of imaging.
Hardgoods are tough business. You only have to look at the struggles of GoPro and closure of Wynit to reach that conclusion.
The Big Two Camera Companies – Canon and Nikon – are the most vulnerable. Sony has built a strong following, and continues to win accolades for its DSLR and mirrorless range. Niche makers like Olympus, Panasonic, Fujifilm and even Leica continue to carve out a segment of fans. Meanwhile, the Big Two have struggled beyond the DSLR. According to rumor sites, Canon is actively seeking advice from professional photographers about what they want in a mirrorless system and Nikon is considering another run at the mirrorless platform. Introduced in 2016 to middle-of-the-road reviews, Nikon’s 360 “adventure” camera hasn’t made much of an impact.
Can camera companies compete?
Facing the fact smartphones decimated the compact camera market, is the system camera next? Or will Canon and Nikon just become professional-class platforms, as Hasselblad has done? There are a few things these companies should consider:
- Open systems are the way – Major camera brands are notoriously close-looped. There is no app ecosystem to build interest among developers. I understand the potential service issues with adding this capability, but if smartphone makers can do it, why can’t camera makers? In the early 2000s, there was a general-purpose digital camera operating system – DigitaOS – and today we have Android. The groundwork has already been done.
- Connectivity is key – Why can’t a DSLR talk directly to the internet? Imagine the capabilities if a SIM card slot were an option for a DSLR or mirrorless camera, right next to the SD card slot. Again, most cameras are basically laptops with a lens; perhaps its time to embrace this potential.
- Go to your strengths – Camera companies have amazing optical capabilities, yet continue to produce cameras with just one objective lens. They should be leading the way with computational photography.
- Become more well-rounded – A lens is a lens, and a camera is a camera. While upstarts like YI Technology makes mirrorless cameras, they also make AR/VR products, home-security cameras, action cameras and more. In some of cases, camera companies offer these products too, but through an industrial sales division. Panasonic and Canon, for example, sell security systems in business markets, yet the big names in the home market are Ring and Nest.
What are your thoughts? Leave a comment!
Camera companies seem to be facing a dilemma that many consumer products manufacturers face when they finally achieve a goal of finding the largest channels through which to sell their products. They end up selling their products only to those most interested or most aware. In other words, they forget to grow the market.
I recently wrote a series of five articles that summarized a university study of the challenges facing the photo industry and other industries like it. Here’s an excerpt from one of those articles:
If a consumer expresses an interest by clicking on
a website, by clicking on a product illustration, by sharing a link, or even by mentioning
something in a post anywhere, they can become a targeted market segment of one. But that
relegates the industry’s prospects to only those who already know about specific products or
services. Using this scenario, future revenue growth would depend on existing potential
customers and exclude everyone who is currently unaware of the features, benefits, or value of
new products. Existing customers die, move on, or saturate. Without access to new customer
acquisition, without access to efficient diffusion of innovation channels, without a sustainable
channel of retail distribution, any industry faces increased vulnerability to the decline stage of
the product lifecycle.
—
Dr. Banasik