Technology Versus the Customer

We're in a period with cameras where two things are in conflict: technology and customer.

Let me explain what's happening.

First, technology. We have a constant and relentless march in a number of areas. Moore's Law might have slowed a bit, but despite rumors to its imminent demise, we clearly have many years where the number of transistors in a given space will increase. The first new chip with state-of-the-art capability you create is astonishing in how much it costs. Once you're building millions of them, not so much. Meanwhile, automating processes—both in manufacturing and in use—keeps getting better, and machine learning keeps getting better, too. 

In the 1980's through the end of century one of my jobs at most of the companies I started or worked for was to try understand the five to ten year forward horizon in terms of what would be possible. It typically takes two or more years for a full scale complete product development of an advanced tech hardware product. Sometimes it takes more for a software product because you need the hardware first. If you don't see clearly what's coming down the pike in technology capabilities, you can find yourself introducing a product that's not competitive or antiquated by the time you finish development. I've seen many tech companies have to kill what they were developing and then put in a rush cycle to deal with what they didn't see correctly.

Nothing's changed since I was dealing with this look-ahead-and-predict problem. If anything, the problem has been exacerbated. Beyond silicon, I see more and more aspects of hardware products that were taken mostly for granted that are succumbing to very rapid technical developments that can trip you up: metallurgy, batteries, assembly process, packaging, and more. 

So, on the technology side, what's possible five years from now isn't possible today, but that's your design goal. Moreover, costs change in that period, too. You can make something new, more sophisticated, capable of much more, and get it to a customer for less cost. I'd argue that the camera makers are at the trailing edge of this constantly-moving forward pattern: they simply haven't kept up with the pace that could have been made in their products. 

For the camera makers, unfortunately, not only is the technology constantly moving, but now their customers are, too. 

There was a time when the most likely point at which someone would buy a sophisticated interchangeable lens camera (ILC) was at a significant life event: graduation, wedding, first baby. As you might note, those are all things that tend to happen in someone's twenties, maybe into their thirties. 

While life events still do trigger some buying, they don't do so in the quantity that they used to. Partly because the reason you wanted a camera around those events was to share your accomplishments with others. These days, sharing is done virtually, via social media, and the smartphone is the primary capture/modification/sharing device you'd want for that. Because today's ILCs are cumbersome at sharing and you don't need the quality they're capable of, the motivation to buy one at an early life event has disintegrated. 

The camera companies instead went after the upgrade market (cater to people who already had bought an ILC, convincing them that they needed "newer, better, faster"). DSLRs had a wild upward sales burst for 10 years because they solved problems that had relegated the film SLR to those user's closet. But inherent in the focus-on-upgrade customers is this: your target customer ages over time. 

While everyone points to various "benefits" of mirrorless as their reasons in buying one, I'd argue that underpinning all of those decisions was something else: the aging customer preferred smaller/lighter, and at equivalency, the mirrorless cameras provided that over DSLRs. I've surely noticed it: the kit I pack for Africa these days is more than 10 pounds lighter than what I packed in 2007, but more capable. Since I went from 55 to 70 in age between those two trips, the 10 pounds savings now feels heavier ;~). 

What I'm finding over and over again is that the camera makers are sealing their own fate when it comes to customers. While the technology allows the camera maker to do something new, that new thing might not be what the aging customer actually wants most. It's just as predictable to figure out what customers-in-place (e.g. existing users) will need in five years as it is to predict what semiconductors can do. But what I don't see in the camera business is any company that is getting that customer prediction right. 

Think about that for a moment. Canon just announced the R7 and R10 cameras, which are effectively a DSLR 90D and Rebel in mirrorless form. Five years ago is that what you would have predicted would be the biggest demand from your customer? The biggest need that those customers had? 

Let's look at what Canon's marketing thinks ;~). "More Than An Upgrade." Okay, I'm with you so far, Canon. "[The R10] brings some of the best features from the growing EOS R Series to a sleek, lightweight design." Uh, isn't that just an upgrade in a different form? So what are the key features/benefits of "More Than An Upgrade"? Here's the bullet list from Canon's Web pages:

  • Capture sharp photos and videos
  • Full features, sleek design
  • Capture fast-moving subjects in brilliant detail
  • Smart, speedy autofocus

I'm pretty sure the current Canon DSLR user who Canon wants to buy the R10 gets most of those things already in the camera they have. And I'm pretty sure that the customer that doesn't have an ILC already isn't hearing the things they need to abandon their smartphone. 

The problem with not solving new customer problems and with not seeing what the customer needs five to ten years out is that you just sell a box that's another in a long series of such boxes with little differentiation, and the marketing (push) needed to sell each new iteration gets tougher. The usual response to the sales pressure is to drop price with sales and incentives. What that does to your margins over time is reduce them, making each iteration's payback to development costs lower, so you shoot lower with your "upgrades." 

I'm much more impressed with something like the Fujifilm X-H2S, which does seem to solve some real problems. But even there, has Fujifilm really thought about the customer needs? I don't see the point of a 40 fps camera if you don't have the lenses that justify using a 40 fps camera. That's the IL in ILC, by the way. ;~)

Which brings me to this: you have to develop the I, the L, and the C based upon where both the technology and the customer will be in five to ten years. What I'm finding over and over is that only the future technology in the C is what's being addressed, and even that isn't often as leading edge as it needs to be. 

Tokyo, we have a problem.

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