We're now at a stage with the mirrorless market where we can better evaluate how various strategies have played out. I believe in giving credit where credit is due, so here we go:
Winners
- Fujifilm — While their business is still modest in size to the Canikony trio, at least it appears to be modestly growing in these times of contraction. Where credit goes to Fujifilm is in their straddling of the main trend (full frame mirrorless). By keeping with APS-C and introducing Medium Format, Fujifilm's strategy is to niche on either side of all the full frame push, and that's worked as Sony has mostly ignored APS-C other than to tech innovate the A6xxx body bit by bit, but virtually nothing else. I'd give Fujifilm further credit for rounding out a full line of crop sensor lenses on their own, too. How long Fujifilm's strategy works now that Canikon is fully in the mirrorless market, I don't know. But for now, things look fine.
- Sony — They made the classic Ries/Trout call and made a committed move away from DSLRs some time ago. Moreover, they made a correct call to emphasize high value product (full frame) over lower end (consumer APS-C). That last bit has upped their position to #2 globally in terms of ILC sales dollars, I believe, passing Nikon and getting close enough that all of Canon management is staring at Sony in shock. All good things, and the reason why I put them in the winners category. Like Fujifilm, it's unclear how long the Sony strategy will play out for them. I doubt they have much to fear from Nikon—though Sony Semiconductor definitely wants Nikon to do well for obvious reasons—so it's Canon you have to watch to see if there are going to be clear chinks in the Sony armor. Good thing for Sony that Canon is a mess right now (see below). But you can't count on things staying that way.
Losers
- Olympus — They abandoned DSLRs earlier than anyone (the right call for them). What they haven't done is build that into a defensible business with staying power. Indeed, they stalled at around 500k units a year and are now down to 340k units for their past fiscal year (and continuing to shrink as their product line doesn't match consumer demand). Olympus peaked at near 8% ILC market share and is now down to 3.3%. Clearly, this isn't because of the build quality of the product, feature set, or the breadth of the product line (e.g. full set of lenses). The failure can only be attributed to camera bodies that aren't priced or designed "right" to compete in the broader market—witness the E-M1X—coupled with the marketing of same. I'd say that Olympus has repeated the same mistake in cameras at least four times over my lifetime, so there's something systemic in their internal strategy versus market acceptance execution.
- Pentax — I'm not even sure I could call them a hobby business any more. Pentax has taken a couple of minor stabs at mirrorless (K-01 and Q), but neither seems like a serious attempt to sell product or grow the business. The Q seemed like a DSLR scale model, but had lenses with the word "Toy" on them, while the K-01 seemed like an Art School project gone wrong (sorry Marc, you mailed this one in). The fact that none of you reading this are using either one says something important, I think ;~). Even more strange is that Ricoh, the company that bought Pentax from Hoya (which bought the original Pentax company), continues to insist on making cameras under the Ricoh name. Simply put, Pentax (Ricoh) has no mirrorless strategy, yet mirrorless is the only segment of the camera market that isn't contracting. Nor do they even seem to have a coherent "camera" strategy, given that they can't agree on a brand name. Thus, one has to conclude that Pentax (Ricoh) wishes to contract even more. Which the market will gladly help them do.
Unknowns
- Canon — The biggest camera player is now in full transition to mirrorless. It's an incredibly awkward transition, to say the least, as EOS M doesn't lead to EOS RF, the RF cameras don't match the RF lenses, and there doesn't seem to be any consistent UX in what Canon is doing with mirrorless yet. And will Canon Cinema cameras be left in the EF mount? Yikes Canon has a lot of messy things to clean up. However, it's too early to say whether that mess will trip up our market leader, or whether it's just a short term result of trying to move faster than they were really ready to. I'd say things could go either way for Canon: (a) they lose their clear dominance over the other players because they can't clean up the loose ends fast enough, or (b) they get everyone in the Imaging group on the same page and executing back on the same cross-supportive strategies again to keep their dominance. The awkward thing for Canon is this: both Nikon and Sony have essentially eaten away Canon's full frame dominance, particularly in the US. If people's dollars are votes, Canon isn't leading full frame any more. And remember, full frame mirrorless is the primary trend line in cameras that's working.
- Nikon — Nikon now seems on the "Slim Sony" plan: transition to mirrorless much like Sony did, but just start with the meat in full frame and skip over APS-C for the moment. It's just too early to tell completely how well that's going, though I'd say that Nikon overall hit somewhere between Mark II and Mark III on their first try (and skipped the poor lens phase). Nikon's sales might not completely disrupt Sony, but it's clear that Nikon is moving a reasonable volume of Z hardware now and has the built-in profit margin to be more aggressive moving forward. The problem for Nikon is that they're probably a year late to when they should have started this transition, and no one yet knows how they're going to handle the sub-US$1000 market (if at all). So Nikon gets an Incomplete on their score card, but with a note that says "work turned in so far looks good."
- Panasonic — I'll give Panasonic full credit for this: they make cameras that seem much more like cameras than technology or engineering experiments. Clearly, they've got photographers in their design teams, and Panasonic is less likely to experiment with non-traditional UX than anyone else except perhaps Nikon. Further, I'll give Panasonic full credit for building a two-platform position (m4/3 and full frame). This allows them to avoid trying to do the "everything for everyone" product, which is a near impossibility to start with. If I had to grade Panasonic solely on product, I'd put them in the winners category. What's 100% unclear, however, is how they're actually doing in the market. Panasonic, like Sony, wants ROI on everything it does to the point where they'll eventually jettison businesses that don't meet high standards. We have no idea whether cameras actually turned their ROI around as asked to by the corporate CEO. The comparatively small Panasonic camera group been shuffled around within the huge company so that it's impossible for the outside world to tell how they're doing, which I take to mean that the company is giving the camera group some time to deal with their financial number problems. So, like Nikon, Panasonic gets an incomplete, just for a different reason. The note on their score card says "consumers seem to like many of the products they've done recently, but they need to reach more consumers to make that click."
We have three other small players who you can't really judge strategy on. Hasselblad is a very small player, with a very narrow niche. They have little momentum, but they've almost always had little momentum.
Leica has always played a high-end luxury niche game with a resulting low-volume in sales. One thing that I took as a disturbing recent sign, though, is that we're seeing products like the Leica SL with lens bundles showing 32% discounts. That's a bit unheard of for a current product in Leicaland. I take that to mean that Leica is feeling some market pressure, much as the rest of the camera companies are. As the Canikony trio play further up-scale themselves, Leica is going to have a tougher time finding customers, I think.
Finally, Sigma is going to do in cameras whatever they feel like, when they get around to it. That's always been the case. They tinker with cameras, apparently, because it's a nice diversion from staring at optical charts all day. Most of their cameras are on sale right now, though, which means that they probably have the same inventory issues everyone else has run into after the dismal first quarter. But there's really little strategy to judge in Sigma's camera group. As I noted, they just do what feels right to them, regardless of the economic signals consumers send back.
From a user's standpoint, I like what Fujifilm, Nikon, Panasonic, and Sony are doing. Clearly Fujifilm and Sony are having some financial success with that in a very down market. (Nikon and Panasonic are still unknowns in terms of financial success in mirrorless, but anecdotally they seem to be doing okay.)
I'll make no attempt to hide the fact that I don't like what Canon has been doing overall so far in mirrorless. Oh, some of their products seem quite good—I really like the M5 for example, though I'm less enamored by the M lenses; the opposite is true for RF where I really like the lenses so far but not so much the bodies—but I'm not getting the feeling that I want to be a Canon mirrorless user from the mismatched products and UX. I need a clearer signal from Canon as to what their future really looks like.
Likewise, I want to like Olympus so much, but they keep making awkward moves that don't really resonate with me (and apparently lots of other folk), nor do they seem to acknowledge or address the shortcomings they have in their products. Stop changing colors and fonts in the menus, Olympus, and finally get around to actually helping us use them! The PL series seems to have never progressed anywhere, the Pen F is one and done, while the E-M1X isn't the type of camera I want with an m4/3 sensor in the first place. The three DSLR-like cameras in the middle that I like and which best reflect Olympus' historic position (E-M1, E-M5, E-M10) seem to iterate oddly (E-M5), or not with enough iteration between models (E-M10).
It seems to me that long-term staying power in the mirrorless market is going to be predicated on getting the camera and the customer experience right (or more right). One of the reasons why I like what Fujifilm, Nikon, Panasonic, and Sony are doing is that I see clear indicators that they are trying to do just that. I feel good about the mirrorless future of all four of those brands.
The other brands? The jury is still out for me. Moreover, as the ILC market continues to contract, it's unclear how many camera brands can really survive if the market contracts all the way down to the size it was at the end of the film era.
This is the time of year when corporate management in Tokyo is communicating to the full staff just what they expect moving forward and want they want them to do. Promotions, or lack of promotions in many cases, are being used to emphasize that.
Of course, given that the typical design cycle for a new camera is two years—and four for the very top technologies—there's a danger that products get out of sync with both the market demands and corporate expectations. I won't point fingers, but I think that's true at as many as half the camera companies right now. If contraction of the market continues, it's going to eventually be true for all.
So, being a winner in strategy so far doesn't necessarily mean you stay a winner. Ditto for losers.
That's the thing about tech products: you can't stop to assess where you are, you have to keep moving towards where you think you need to be. To me, that's the real issue with the camera companies: photographically, I'm not sure they have a strong sense of where they should be. The current trend of going up-scale and pushing full frame isn't really driven by the user base needs, it's driven by financial needs (if you're going to make fewer products, the profit margin has to be bigger).
