What Does the V1 Price Plummet Say to Customers?

With the Nikon V1 kit price suddenly dropping by half on Amazon and by even more than that at a few other online retailers, Nikon has a new problem on their hands. (US$399 seems to be the best price so far, which is US$500 less than suggested retail.)

fallingv1prices

Falling Acme V1 prices, meep meep

While customers are used to seeing price drops on consumer electronics gear, 50%+ in one year is a little unprecedented for current cameras. Typically, a healthy-selling camera undergoes about a 25% drop from introduction to end of life sales before the replacement is introduced. 

Just what are we seeing here with the V1? Is it end-of-life (V2 imminent? ). Is it too much inventory? Is it a response to compact cameras like the G1X and RX100? Is it just retailers unloading (they couldn't do this without Nikon's permission, though, as the advertised prices are lower than the Minimum Advertised Price—MAP—that Nikon established)? Is it an experiment by Nikon to see what the elasticity of demand is? 

It's one thing to see previous generation mirrorless gear hit the fire sale bin. Previous generation m4/3 and NEX gear has long had clearance sales. Indeed, as I write this, the NEX-5N body is under US$400 at a number of places, and a NEX-5N kit isn't much more. That represents a 38% price reduction over the newly announced NEX-5R, which has a number of features the older model doesn't (WiFi, apps, etc.). 

But here's the thing: those that bought into the Nikon 1 line—in particular V1 purchasers—certainly haven't been rewarded in any way by Nikon. High initial prices, no new significant additions to the system, and now the biggest fire sale I can remember in recent Nikon history: these are things that are causing the early Nikon 1 adopters to wonder if they made the right decision. In short, this is not the way to build brand and system loyalty. Indeed, it does just the opposite. Amusingly (okay, macabre-amusing) is that the FT1—which is simply a chunk of metal with pass-through electrical contacts—now sells for half the price of an entire camera and lens kit. What a mis-read by Nikon. If they needed to clear inventory, they should have bundled (V1, both kit lenses, FT1, GPS and/or flash for a dramatically lower price: as in "we'll make it easy for you to get with the system"). At least that would have looked like Nikon was trying to encourage new Nikon 1 samplers, rather than just marking everything "Clearance, buy while it lasts." 

Oh, and that new J2? Now US$150 more expensive than the better-for-most-users V1. Is that any way to introduce a camera? 

Fire. Ready. Aim. 

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