I wonder if some of the camera companies are about to get the wrong messages?
Let me back up for a moment. We have a confluence of things happening at the moment. First, we've got the whole mirrorless initiative. Second, we have cell phone cameras hurting compact camera sales. Third, there's all that video enablement in still cameras, which is slowly working its way through the entire still camera lineup. Fourth, we have some user resistance building, as the gains from each increment in cameras is getting more and more difficult to notice, thus more difficult for a customer to justify the upgrade to. Fifth, the yen appreciation has priced some equipment out of some customer's budgets. Next, we have corporate decisions, such as Nikon's tight inventory and Sony's backing away from full frame. Finally, we have an earthquake. That quake has produced a deadly silence about a lot of things from the camera companies, and some oddball results, such as today's cancelling of the Coolpix S4100 by Nikon.
Here's the thing: the sales mix of cameras in 2011 will look very different than in 2010. Not necessarily because the customers want exactly the mix we end up with, but because all of the things I just mentioned have stirred the pot into a new sales mix. Consider inventory. Nikon had none, Olympus had a lot. Joe and Jill Average walk into their local camera shop to buy graduation presents for their twins Joe and Jill Jr. What are the choices on the store's shelves? Not that it was a likely choice, but no full frame cameras, few high-end cameras, a mix of compacts, and a lot of mirrorless. Pretty much everything they might find will have video built in.
So, the sales numbers come down at the end of the quarter and it says "mirrorless cameras with video increased in sales relative to everything else." Now, you could be a brain-dead marketing manager and just jump to the conclusion that "we should be designing and making more video-enabled cameras." If I were your boss and you did that, you'd be on the street looking for another job next week. But in Japan, your job is safe, I think.
Data is a great and powerful thing. Collect the right data and interpret it well, and you can make very intelligent decisions. Collect the right data and interpret it incorrectly and you can make very dumb decisions. Collect the wrong data, well, you were just dumb to start with.
I have this terrible feeling that the 2011 numbers are going to be read wrong even if collected right. This week was Mother's Day. My local Best Buy was out of a few low-end DSLRs but had the Olympus E-PL1 on sale at US$399. Guess what sold? Now if you look just at the numbers next week, you'll say "inexpensive mirrorless systems are selling at the expense of DSLRs."
Don't get me wrong, the camera companies aren't quite so bad that they'll just look at the numbers and change direction. They have large staffs trying to make sense of sales trends and patterns. The problem I see is that a lot of the "pattern" recently is self-fulfilling. DSLRs with video sell more than ones without because, well, we've made more DSLRs with video than without, and companies have been marketing video-in-the-DSLR heavily ever since the D90 came out. Of course the numbers would go up. But is it cause or effect at work?
Many industries over time manage to get themselves rendered into a corner because they start believing the numbers and their analysis of them. The American auto industry is well known for designing from past data and either ignoring or misinterpreting it. I once was a participant in a Jeep focus group and by coincidence, later saw a copy of what was reported to headquarters. The "results" didn't match what I and my fellow groupies said, at least in my humble analysis. Indeed, one common comment amongst almost all those in the group didn't even make it into the report. So I asked "why?" Turns out that the specific task of the focus group had been exceeded by the group. The company didn't actually want to hear anything other than what it had sought out to hear.
One thing that is happening already is that the Japanese companies aren't hearing what the potential buyer is saying right now. Everyone's wondering about when things will change in supply and whether product announcements are going to be delayed or cancelled. Nikon's the first to tell us about a particular product (the cancelled Coolpix) but there's no information about anything else.
That's already distorting sales. Let's just take the D700. Three things have happened in the customer base: (1) some have simply decided to stay with what they've got; (2) some have decided that the D800 isn't coming thus they'd better pick up a D700 when their dealer gets one in stock; and (3) some have simply diverted to a D7000. #1 lowered demand, #2 raised demand, and #3 lowered demand. Overall, Nikon must be thinking to themselves that the D700 and D7000 are really popular cameras (because of #2 and #3). But they're missing seeing #1, people that are leaving the market, possibly more than temporarily. Also, note that the more #2 and #3 that goes on, the less likely those people will buy a D800 when it does appear.
These are interesting times for a manufacturer. Times when they need a close connection to their customer to understand what's actually happening.