All the reports elsewhere about the camera market are on the positive side. After all, CIPA shipment numbers are up this year over last. The Economist even chipped in and reported that sales of high-priced cameras are up (full article behind paywall).
I tend to look far ahead, and not just a bit in the past, so I'm seeing a different picture.
If, for example, someone buys a US$6000 Leica—one of the Economist's examples—the question that immediately comes to my mind is "how often will you buy such a high-end camera?"
We already see some of the wallet inertia in buying with the high-end DSLR user. If you bought a Nikon D850, for instance, you not only got one of the best all around cameras ever, but it becomes difficult to come up with a valid generalized argument that, say, a Nikon Z8 is all that much better. Sure, I can point to some specific features that improve, like frame rate, but exactly how motivating are such things to someone that paid US$3300 for it? Is it worth selling the D850 for US$1020 (KEH current quote for excellent) and buying a Z8 for US$3700?
Some of us would say yes to that question based upon a use/cost analysis. If you bought a D850 when it came out in 2017 and sell it today you'd have gotten seven years of use for about US$325 a year. To put that into perspective, at the end of the film era, that would be the same as about 40 rolls of film and processing.
Of course, there's more to the story than just camera body, though. If buying a new body also triggers buying new lenses and accessories, the economic justification gets far tougher, very quickly.
All the camera makers have been targeting the established user base with higher priced models. Many companies, including Nikon, have made specific comments about this being their primary strategy for long-term success.
But is it?
I argue that 2024 is the last year of the DSLR. EU regulations make it impossible to sell almost all current Canon/Nikon DSLRs after December, and more and more DSLR models and lenses are getting discontinued. Many haven't noticed yet, but the D3500 and D5600 are no longer sold new by B&H or even NikonUSA. That effectively means that we're down to four Nikon DSLRs in the US (D6, D780, D850, and D7500). Three of those are on deep discounts at the moment, suggesting that they're nearing end of life themselves.
We're halfway through the year, and the CIPA numbers suggest that mirrorless alone will not keep ILC (interchangeable lens camera) sales above the 6m/annual unit bar. If that's true, then 2025 will turn out to be a flat to slightly down year and that whole notion of "let's just sell high-end cameras" starts to tougher and tougher fight wallet inertia. More and more of my peers are claiming they're on Last Camera Syndrome because they can't imagine parting with many thousands of dollars for a new camera again. What would it truly do that their current one doesn't?
Meanwhile, the camera makers ran so far and so fast from the compact and lower end market that it's difficult to see where the younger, new-to-ILC buyer comes from. Moreover, that market has proven to be very fad driven, and the Japanese marketing departments aren't fully up to the challenge of finding and fueling the fad before it happens. Instead, we have the Fujifilm X100VI problem: the young really want this camera, but production wasn't close to meeting the fad demand. Now that production is finally up, the fad buying has softened.
I keep hearing that "component shortages" are an on-going problem for all the camera makers. I've yet to identify exactly what component(s) that might be, despite a great deal of prodding and poking. I'm starting to believe that this is really a euphemism for "we didn't order many parts initially—particularly image sensors and SoCs—because our finance department has gotten even more tightwad than before, and now that we know that we need more parts, our supplier says it'll be some time before we get more."
These and other issues make me even more certain that the volume level of the camera makers is not in full recovery, but, at best, on a plateau. I started writing about the possibility of a far future 4m unit market coming in the mid-teens, and I can still see the elements in play that will still get us there.
At a base level, the biggest problem for the camera makers is that once they've sold everyone a high-end camera, the only continued growth would likely come from selling entry cameras to completely new-to-ILC users. However I'm not sure the Japanese see this clearly. Indeed, I'm going to go out on a limb and say that they see the real problem as clearly as they foresaw the iPhone in 2006 (the iPhone appeared in 2007).
Think about those young potential users and what they're getting "trained" to do. Oops, it's video, and it's nearly real time video (i.e. post in real time or as close to it as possible). This has to come from a device that's always with you, and oops, even the smallest ILC is already too large and heavy for that. In case any Japanese camera executive is reading this, the answer is already on the market, and it surfaces yet another problem for the Japanese: it's made by a Chinese company, DJI.
What am I talking about? The DJI Osmo Pocket 3. I've been using one trying to foresee how I change some of my Internet presence in the future, and what I see is something I can't get from any Japanese company, including seamless integration with my smartphone.
It's ironic that Nikon saw the original "action" cameras such as the GoPro to be part of the future market, entered with the Keystone models, and then quickly retreated when they realized they had no idea how to market them. So did Sony with the RX0. Now GoPro itself is in a similar situation, where the DJI Osmo Action and Insta360 offerings are getting to places and doing marketing that GoPro should have gotten to long ago.
To succeed at the future camera market—particularly the part that caters to new, young users—you're going to have to be extremely nimble with design, better at software, better at marketing, create and cater to fads, and integrate 100% with mobile devices and the social Internet. Yes, top-end cameras will still exist, but their volume simply won't propel the current makers any further than they've already gotten. Moreover, if you only cater to the high-end market, those users are slowly dying off, finding other uses for their money, and not likely to upgrade very rapidly.
I remember my path with High Fidelity gear many years ago, and it's illustrative to what the Japanese camera makers are about to go through. As a professional musician I had real reasons for having a reel tape recorder, amongst other high-end gear. But you know what? The higher-and-higher pricing for fewer-and-fewer benefits eventually just became too much trouble, and I found other uses for my money (cameras!).
Unless something changes soon, in ten years we'll either have far fewer dedicated camera companies, much smaller dedicated camera companies, or both. As I've tried to outline for going on two decades now, the Japanese camera companies have not yet really embraced 21st century technologies, particularly communications. Photos don't go through labs and get printed and then mailed to friends any more. I want to push an image I take in Botswana to the electronic picture frame in my mother's family room instantly, and I can't really do that (though now that Botswana has allowed Starlink, the actual path by which that could happen now exists).
My photojournalist (PJ) friends all tend to use their smartphones now as much as they do their dedicated cameras. Why? Because their images tend to be most valuable "now" as opposed to even "a few minutes from now." If I were a Chinese company looking for opportunity in the camera business, well, there it is in a nutshell. And just like the original adoption of high-end photo gear by PJs incited demand from consumers, the same will happen when the next great PJ camera is introduced. One that speaks 21st Century, not mid-20th.
