A Better Quarter, Sort of

Mirrorless camera shipments were up 13.9% in the first quarter of 2016 versus last year. DSLR shipments were down 5.1% for the same reporting period. Mirrorless volume was 36% that of DSLR volume during the quarter.

The first calendar quarter also ends most of the Japanese companies’ fiscal year (all but Canon), so we’re getting closer snapshots of how things went.

Let’s start with Olympus, who basically repeated their pattern of the last five years: predict a break-even or profitable year, then at the last minute, report losses. Overall, Olympus lost 2.1b yen on cameras for their fiscal year, a smaller loss than before, but their net sales are tumbling. Once again they’re predicting a break-even year ahead. Once again one has to doubt their optimism. 

The good news, of course, is that Olympus rapidly increased their health via the…well, health side. The company basically prints money with their Medical group. But I note that their presentation pretty much ignored all the potential liabilities stacking up in how they’ve achieved that. I only saw brief and passing mention of “compliance” in their materials and presentation in the risk section, yet here in the US Olympus has all kinds of compliance and client issues pending. You had to dig into the detailed financial tables to see any talk of compliance issues, and even that seemed downplayed, as if the issues and exposure is all known.

Olympus has reduced their compact sales relative to mirrorless somewhat, but compacts are still more than a quarter of the camera sales. Overall, Olympus sold 550,000 mirrorless cameras in the fiscal year, up from 510,000 in the previous year (if you’re interested, I track this on the header page for Olympus cameras, see bottom of that page). 

For the coming year, Olympus is estimating 500,000 mirrorless cameras. Note the CIPA numbers: Olympus is losing market share in mirrorless.

Sony, meanwhile, was profitable for the year in Imaging, though it’s difficult to say how much of that is contributed by video gear versus still. The Imaging Products group at Sony posted slightly lower sales (-1.7%) but a very healthy profit (up 30.4b yen and hitting about 10% of sales).

In terms of unit volume, digital cameras at Sony dropped from 8.5m units to 6.1m units year-to-year. That’s mostly compact camera sales that dried up. Sony won’t say exactly how that shift is working other than to say “improvement in the product mix of digital cameras.” In other words, they suggest that by getting rid of compact camera volume and emphasizing high priced ILC units they are getting a better profit margin. But Sony’s presentation materials are opaque as to details. 

Fujifilm has a hobby camera business. Digital cameras are about 2.5% of the company’s overall revenue stream. That they give us any insight into how that business is working is actually a bit surprising. Sales for digital cameras were down 8.2% year-to-year and profits aren’t broken out in a way that you can tell whether the camera business is profitable or not. 

Indeed, Fujifilm uses terms like “strong” but avoids any indication of what that means in numbers. The also talk about “profitability” in a broad sense, as in “profitability improved,” but you should note that in Japan they use that term to indicate less of a loss, too. And while the entire group’s next fiscal year is forecast as growth in sales, Fujifilm specifically declined to say that any of that growth would be due to digital cameras (it’s driven by instant cameras and printing of images). 

Panasonic is a warren of sub-divisions within divisions, and they rarely break out the data that would allow us to examine what’s happening with cameras. The sub-group they’re in posted a 3% sales gain for the year and anticipates a slightly lower gain for the next year. The only talk of contributors to future sales/profit increase was 4K video components (whether cameras or other gear).

Canon had flat ILC camera sales for their first quarter (they’re on a different fiscal year), which was a bit surprising. Given the decline in DSLR sales overall Canon’s flat ILC volume must have been due to an increase in mirrorless (e.g. EOS M3 and M10). I’ll have more to say about Canon when Nikon reports their numbers later this month.

Overall, mirrorless is the healthiest of the camera sales groups at the moment. Compact cameras are still in a steep dive and it’s starting to look like they might not even survive, at least for the non-prosumer, non-waterproof models. DSLRs continue to slowly drift downwards in volume. But there’s a caveat: most of the mirrorless volume increase was targeted at Asia. The worldwide distribution is shifting for mirrorless (and it was already heavily Asian-weighted). I don’t see any indication that mirrorless sales are picking up in Asia, though. It could be inventory dump into the most likely market where you can eventually sell it. 

You can read this one of two ways. (1) The mirrorless boat got just a bit bigger and the lake smaller; or (2) boating as a pastime is slowly going away. It’s a quasi-glass-half-full scenario. 

Meanwhile, the cameras get better and the lens options increase. So enjoy this while it continues.

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