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Nikon Ranked 5th in 2019 MILC Sales

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Nikon Ranked 5th in 2019 MILC Sales

Nikon has had a torrid few years as it rapidly tried to pivot to mirrorless on the back of declining financial results. It ended 2019 with falling market share, losing second spot to Sony. The reason for this is now apparent: low mirrorless sales that place it 5th in the market. What is happening at Nikon?

It’s no secret that Nikon is struggling financially. Its Imaging Division has been the core of its business, falling from 68% of total revenue in 2015 to just 38% last year. Precision Equipment are now the larger unit, but that is on the back of declining income across the whole group. Earnings from camera sales in the Imaging Division were split across compacts and ILCs, however the volume compact market is essentially dead and their new medium term strategy is about cutting away that manufacturing capacity and reducing costs. Income is therefore being driven by ILCs with Nikon itself projecting a continuation of the declining market share to 16.6%, selling 800,000 units on the back of a market of 4.8M.

The puzzle is where the poor sales are originating from as Nikon does not report on the split between DSLR and mirrorless sales. NikonRumors summarizes a recent Nikkei report that breaks down the 2019 ILC sales by DSLR and MILC. Total ILC sales are topped by Canon, Sony, and Nikon:

  1. Canon: 4.16 million
  2. Nikon: 1.73 million
  3. Sony: 1.66 million
  4. Fujifilm: 500,000
  5. Olympus: 330,000
  6. Others: 280,000

The breakdown for MILC is a critical indicator of future market share given declining DSLR sales and the likelihood that MILCs will outsell DSLRs in 2020:

  1. Sony: 1.65 million
  2. Canon: 940,000
  3. Fujifilm: 500,000
  4. Olympus: 330,000
  5. Nikon: 280,000
  6. Others: 240,000

There are five key takeaways from this breakdown. Firstly, Sony is head and shoulders above the competition for mirrorless sales which gives it a significant advantage. Secondly, even with it’s slow entry in to the full frame mirrorless market, Canon has been very successful (although this will also include M-series sales) in selling cameras. The impact of COVID-19 on market share and how that translates in to a trajectory in to 2021 will be critical. Can Canon overtake Sony? Thirdly, Fuji is selling a good number of cameras! Sure it’s not in the same ballpark as Sony or Canon, but that’s still a lot of cameras for a healthy business. Clearly it’s strategy of APS-C/medium format is paying off. Fourthly, Olympus is also still selling plenty of cameras. How this will fare through 2020 and 2021 remains to be seen, although the take home point is that they don’t believe the business is sustainable on these numbers. Fifthly, Nikon sits fifth in this table. Only 16% of its camera sales were generated from MILCs which is worryingly low and explains why income has flat lined. In short, DSLR sales are declining but not being replaced by mirrorless sales. They have engineered a good product, produced fiercely competitive camera bodies, and have a good lens roadmap.

Whilst 2020 was shaping up to be a formative year for the camera market as the whole sector shifted its focus to mirrorless, the impact of COVID-19 on business has made this more acute. Income will be severely constrained at a time when development costs are high and the market contracting. Sony is riding high on its mirrorless market advantage, with Canon seemingly bouncing back rapidly. How will the fortunes of the different manufacturers shape up over the next 18 months?

Lead image courtesy of Pexels via Pixabay, used under Creative Commons.

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