This week's extreme market volatility and Nikon's expected announcements in the coming two months have a lot of you asking me about what I think will happen to prices. Unfortunately, I don't think the news is good. The dollar peaked against the yen at a little over 85 in April. It quickly fell down to bounce around 80 for an extended period before beginning another slide in July that now has us down to 76.84 (as I write this). The trend has been relentlessly downward since early 2007.
The bad news is that 76.84 is already 4% lower than Nikon has estimated for the rest of their fiscal year (which ends March 31, 2012). That's awfully close to the kind of slide where Nikon typically has raised prices. (Nikon's Europe forecast was downgraded to 110 yen to the Euro, and we're already under that, too, though not by nearly as much.)
I try not to get into political discussions here, but the inability of the US Congress to act even remotely responsibly is essentially forcing the Fed into a position where they will continue doing things that weaken the dollar. Things don't look great in the US (though they're nowhere near as bad as the press and the politicians make it out to be): we need at least a trillion dollars in short term stimulus directed entirely at job creation, and we need to then come up with about 5 trillion dollars in medium term fiscal changes (increased revenues, less spending). I'm betting that Congress will do neither, at least not directly (e.g. the Bush era tax cuts expire again on 12/31/2012 if they are not extended; conveniently, that's right after an election, so if America votes in more Republicans, we'll get in an extension; if America votes in more Democrats, the tax cuts will just expire).
So at this point, I expect price increases in many of Nikon's higher end products. The good news is that Nikon's profit has been rising, so they have some additional flexibility to absorb short term currency fluctuations. But they'd be acting irresponsibly to their shareholders if they didn't react to any continued weakening of the dollar.
What kind of price increases? Well, the pro Nikons (e.g. D1x, D2x) used to be all priced at US$4999 at launch. Lately, that moved to US$5199 with the D3s. I suspect it'll move to US$5499 with a D4. Likewise, the D700 was US$2999, and I'd now expect its replacement to be priced at US$3299 or US$3499 in the US. It's possible that Nikon will show restraint and be more aggressive. After all, there's still plenty of competition out there for your business. But I'd expect Nikon to price higher initially and use Instant Rebates to adjust if sales volume doesn't meet their goals.