Short answer: apparently nothing. It’s all down, baby ;~).
We now have official statements of withdrawal from the camera market by Samsung in Germany and the Netherlands. We have unofficial rumors of withdrawal from a couple of other countries. We have rumors in the South Korean press of Samsung having made the decision to shutter their camera division. So what gives?
The sad thing is that the NX-1 is a very good camera. If you like DSLR-style cameras and want state-of-the-art mirrorless, the Samsung NX-1 is arguably one of your best choices, and maybe your best crop sensor choice. It isn’t that Samsung has been building terrible NX cameras. Quite the contrary. As I’ve noted over the course of reviewing three of them, the NX cameras and lenses have been quite competitive.
On top of that, Samsung took a risk that was just starting to show some payoff: while they originally started down the path of using Android as the base OS in their cameras, they slowly moved to Tizen, a Linux-based platform they developed in conjunction with Intel (and which has its roots in a Nokia/Intel alliance). And the NX-1 shows just how far they came with it: a solid performer with a relatively handsome and useful interface, plus a strong connection to mobile devices.
But the law of numbers seems to have caught up to Samsung: they just didn’t sell enough product. At US$1699, the NX-1 was pushing up into FX DSLR pricing, and the cost of good lenses just added to that. Moreover, Samsung’s sales and distribution pattern really relies a lot on big box stores (at least here in the US), and look how the camera section at stores such as Best Buy got cut down and moved in prominance in the last couple of years. Some months in the US, I’d see Samsung creep up to number three or even number two in the NPD and other retail numbers for mirrorless bodies, but the US isn’t a big mirrorless market.
Indeed, that’s the disturbing thing about Samsung’s withdrawals in the European market: so far this year we’ve had 508k mirrorless units shipped into Europe, only 342k into the Americas. Japan, where Samsung has few sales, is a market that took in 498k mirrorless units (Asia was 971k, Other 61k). Let’s presume for a moment that a company has 10% of the mirrorless market (Samsung doesn’t, but let’s use that value for an illustrative point): so far this year that would imply something around 280-300k units. That’s not a lot of units to get sensor costs down with. And you’d think that Europe would be one of the places where you could sell more, rather than less, of them.
Note that most of the mirrorless cameras are using essentially the same older sensors across generations. We’ve been stuck at 16mp for Fujifilm and Olympus for a long time now (that will change soon, but then get stuck again). That’s because in order to get sensor costs down into a reasonable realm, you have to pony up to the bar for large quantities. Samsung is on their third sensor generation across very few units, and the last generation has been an expensive-to-produce BSI one. Samsung was also one of the few to be sticking state of the art WiFi and Bluetooth chips into their recent products, another bit of cost.
So the law of numbers is working against Samsung: low volume isn’t enough to pay back R&D, sensor, sales, distribution, and support costs. While five years ago they had hit 10% of the global market for compact cameras, note what’s happened to compact camera sales since. 10% of a market that declines 25% a year is not a winning proposition in terms of paying back such costs.
Samsung is certainly big enough to absorb cameras as a hobby business, as Fujifilm and Ricoh seem to do. But Samsung has a long history of moving in and out of businesses and shifting priorities in terms of where they place their business investments. Cameras got shifted to the group that makes mobile phones, which is under extreme pressure to produce the kinds of financial results that Apple is with the iPhone.
Overall, things don’t look good for continued Samsung involvement in the digital camera market. Best case now is a smaller product line and less availability. The more likely case is that the rumors out of the South Korean business press are correct: Samsung is folding its cards in cameras and putting those resources elsewhere.
Should you be afraid to purchase a Samsung camera because of this speculation floating about? Absolutely not. If a Samsung camera is the right choice for you today and the lenses you need are available, I wouldn’t rule them out, especially the NX-1. Still, the news isn’t exactly encouraging, is it?