Sigma today has provided more details on their long-gestating SD1 DSLR: US$9700 for the 15mp non-Bayer APS-C sensor camera. Meanwhile, multiple rumors have the upcoming APS-C 24mp Bayer-patterned Sony A77 (to be launched 7/7, get it?) coming in at US$999 for the body only. Anyone else feel like we're riding on a roller coaster?
Welcome to the beginning of the end of the digital SLR era.
As I noted elsewhere (and predicted within the correct 12-month window over six years ago), DSLR unit sales have been flat and appear about to fall. Revenue per unit has fallen. Household penetration for DSLRs peaked some time ago, and much of the market now is replacement, not new sales. That's certainly true above the entry level. We saw this same pattern in film SLR sales. Twice. Once in the late 60's when MF hit its nadir, and again in the late 80's and early 90's, when autofocus SLRs peaked and the current power couple of Canon and second-place Nikon took their place on the throne.
Meanwhile, we've got 6 players (Olympus, Panasonic, Pentax, Samsung, Sigma, and Sony) who'd really like to wrangle a significant piece of the high-end camera business away from the ~80% share Canon and Nikon have enjoyed through most of the DSLR era. And as should now appear clear, they've all taken different strategies at doing that:
- Olympus/Panasonic: made a big bet on m4/3 taking the DSLR initiative away at the low end. Both pretty much neglected or abandoned any traditional DSLR approach to do so, which on Olympus' side has alienated customers. Both increased their overall interchangeable lens camera sales significantly with their strategy, but at a lower price point. Still, they haven't really blunted the low-end Canon and Nikon DSLR sales, they augmented them. Status: tenuous foothold at the low end, very tenuous above that. Forecast: continued tough road ahead.
- Pentax: still pursuing the DSLR tactic for the most part. And still in the low single digits of market share while doing so. Status: current strategy didn't work, still in same position as before. Forecast: needs a new strategy or risks becoming irrelevant.
- Samsung: saw where Panasonic and Sony were headed and broke off from their Pentax-fueled DSLR tactic to create NX. Basically same strategy as Olympus/Panasonic, but with a bigger sensor. Status: still looking for a clear winner. Forecast: their problem is marketing, not product, thus their future strength depends upon whether they solve that problem or not.
- Sigma: cast its lot with a different sensor (Foveon), so much so that they bought the technology. The SD1 shows both the gain and risk in their strategy: they're unique and potentially have a very high quality sensor, but they're also very low volume which makes the same sensor pricey. We'll see how the SD1 body fares soon, but previous Sigma cameras have always had this feel of the sensor outmanning the rest of the camera. There's potential for the SD1 to feel like a turbocharged V8 engine in a Ford Pinto body. Status: not a significant player due to low volume. Forecast: high price of the SD1 says their volume won't change and they'll stay at the margins of the market.
- Sony: most interesting strategies (yes plural) of the bunch. On the Alpha side went for very different technologies (e.g. pellicle mirror), which took awhile to get settled, but has clear benefits long-term. Also has been shoring up and improving dealer network here in the US, giving them a potentially significant advantage over the other players, above. Has been aggressive on price with the Alphas (some of which is happening with the dealer), and appears to be about to get more aggressive. Meanwhile, they've made NEX into a potentially serious mount (it currently extends from a low-end mirrorless model to a highly professional video camera). Too bad they don't have the lenses to back it up yet. Status: making progress on all fronts, and Canon and Nikon need to be especially wary of this competitor. Forecast: one weakness is still not having all the right lenses. This blunted sales of both the full frame Alphas as well as NEX models. Even the Alpha is missing a few key lenses if it wants to tackle the high-end Canons and Nikons well. Rumors show progress on this front, but it needs to happen faster. Other weakness is in marketing. The dual strategy makes a strong cohesive "why Sony cameras matter" message very necessary.
- RIP: Fujifilm, Kodak.
Canon and Nikon have continued to pursue their old strategies: entry to pro DSLR lineups, iterated regularly, moved upscale in features and performance with each generation. Status: Quo. Forecast: declining returns from this strategy. A 24mp A77 at US$999 that performs well threatens the more expensive D7000 and D400 on Nikon's side, the same-priced 60D and more expensive 7D on the Canon end. The multi-competitor thrust at the entry position (Olympus, Panasonic, Samsung, Sony) will eventually break through if left unchallenged.
Thus, significant changes in the interchangeable lens camera landscape are almost upon us, and the pricing roller coaster is just a symptom of that. But here's the thing: overall sales aren't going to grow much, if any. Not without some unforeseen product pulling an Apple (iPod, iPhone, iPod) and obsoleting the conventional products.
We're seeing price moves (other than the quake-caused supply/demand ones) because the camera companies are using a crude lever to try to gain advantage. None of the players have exceptional marketing. Even the Big Two seem to be struggling with that. Nikon backed off the best campaigns they've ever created (for the D40 and D80) to the second best (the Ashton Kutcher "shoot like me" ones), while Canon seems to keep folding up their marketing tent as budgets get tighter.
I hate to keep using Apple as an example, but they've been the best available one in high tech for a long time now: strong product definition that creates new categories and quickly dominates them; effective and ubiquitous advertising and marketing; best-in-business customer support (not a very high bar); consistency in design and message; creation of ecosystems around their products. Now take that list and see how many camera companies manage any of those things. No wonder DSLR sales have peaked. No end in sight for the roller coaster ride, though we're coming up on a big drop.