Get Ready to Wait

Okay, some of you are already waiting.

What do I mean? Well, every camera maker I've talked to recently—which is a majority but not a plurality—is saying the same thing: they're having to make decisions over what cameras to make in volume. And that's with a pandemic still tamping down demand. Every maker seems to have parts in their supply chain that are in short supply now, and that means that they have to very carefully manage which models they put those parts into (assuming it isn't a unique part). New cameras with new parts are seeing issues, too.

When Sony announced the A1 I had to make a decision: my borrowing one of the first ones produced for an extended time means that someone isn't going to be able to buy one. If Sony hadn't hyped the A1 quite so much, I might have demurred and just reviewed it later rather than sooner. I did pass initially on the Fujifilm GFX100s, mainly because I don't think it's a big difference from the GFX100 I reviewed in terms of image quality, and I can wait to see what the handling changes do once I'm able to shoot more freely again.

Nikon seems to be emphasizing Z6 II's in their production chain, and that makes some sense. The pricing is moderate but the gross profit margin high. Right now there's enough demand to sell lots of Z6 II's. There's also pent up demand for the Z7 II, as well, but Nikon seems to be prioritizing 6 over 7 for the moment. 

At B&H at the moment, the following high end cameras recently introduced are out of stock: Canon R5, Fujifilm GFX50R, GFX100S, Nikon Z6 II, Nikon Z7 II, and of course the Sony A1. All are high-end cameras which aren't likely to be built to demand for a while, it appears. About the only exception of recently introduced high-end camera intros that is in stock is the Sony A7S Mark III. 

Unless the supply chain gates open and start flooding makers with the parts they covet, I'm betting that we'll see out of stock filter downwards in the model lineups. 

But the problem extends further. One source claiming to be privy to a maker's current decision making claims that a body that probably should be introduced this year and would sell well may get postponed to next year. 

Meanwhile, there's a ton of inventory overhang. By that I mean previous generation models being sold at discounts. In one case, Olympus, there's a distributor that scooped up the Olympus inventory who's trying to unload it while OM Digital Solutions figures out everything from their side for new production and distribution. 

I'd warn the camera makers to look closely at what happened to Nikon when they had huge inventory overhang a number of years ago. At one point Nikon was selling three generations of some cameras (sound familiar, Sony?). The problem is that people buying those models reduce your overall GPM, sometimes considerably so, as you try to unload inventory and parts commitments. They also stall some of you recently introduced product sales, as who wants to buy, say, their full frame camera at US$2400 when a US$1000 one is available? 

There's always been a lot of micromanagement going on in the production/distribution/sales game with cameras. But now the stakes are higher than ever.

I can't predict sales in this environment. My advice is similar to what it has been throughout the pandemic: be careful of just waiting for big sales. The camera makers are dialing up their sales management trying to max out dollars while not killing demand, and juggling variables you and I aren't fully aware of. So it's gotten tough to predict instant rebates and flash sales, and they aren't always on products you might want. For example, Nikon usually has quite a wide variety of product on sale in February each year as they try to manage their final quarter's fiscal numbers. That's not happening this year. A few minor discounts on the lower end and older generation mirrorless gear, a handful of lenses, mostly F-mount. (This, by the way, belies the Internet Myth that Nikon is running out of money and won't survive long. They've got billions in cash sitting around and they're not putting their entire inventory on fire sale. Hmm. If you were about to go out of business because you don't have any money, why would you do what Nikon is doing right now? ;~)

All is not bad news, though it starts with bad news. As happens every time this year, the association the Japanese camera companies all belong to, CIPA, has published their calendar 2020 results and their initial 2021 predictions. 

2020 saw digital camera shipments down 58.4%, with the largest decline in compact cameras, the lowest in mirrorless. The grand total ILC units sold (DSLR and mirrorless) was 5.3m, slightly higher than I expected, but significantly above the 4m figure I say is a floor sales don't dare go through. 

But for 2021? CIPA predicts growth! Indeed, a 13.4% increase for ILC to just over 6m units. 

Now put these two things together: parts shortages are keeping volume down as we start the year. Yet the camera companies all think their sales are going to go up during the year. If they're right, that means that things will eventually work themselves out. We could have a real gangbuster happening by late spring, certainly by the holiday season. 

So, practice patience. Buy what you need to buy, but you might be better off waiting a bit if you can. If the supply chain improves and demand goes up as the Japanese expect, the camera makers are all going to start jockeying for position, and that means more choice and more sales.

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