Technological Evolution Spurs d-SLR Growth

TWICE: Where is the digital SLR market headed? Has digital photography changed the demographic make-up of the SLR photographer? Is the market broader now than in the 35mm era?

Lee: We certainly think so at Nikon. I think that the creativity of a digital SLR user has been enhanced since the film days, when they would try many different things, they'd shoot and then they would have to wait to see if their creativity worked or didn't work. Today it's instantaneous. So you see a lot of guys, they take a picture and look at the back of the camera and say “ooh” — we call it “chimping.” So we think there's a much bigger opportunity with digital SLRs than there was with film because of that instant gratification.

Peck: The film SLR peaked in the mid-1980s, and then from the mid-1980s down it was just a downward spiral for almost 20 years. We talked earlier about the second- and third-generation digital camera buyers. They understand the limitations of point-and-shoot digital cameras, primarily shutter lag. Most lack the ability to put an extra flash on, or the focal length is not adequate for what they want. They recognize that SLR cameras can change lenses, you can add flashes, you can put more accessories onto it. There is no shutter lag. So soccer mom — who got dressed from her pajamas — wants the pictures of the kids in the action shot, not a split second after they kick the goal. So they're very well aware of what an SLR camera can do and what a point-and-shoot camera can't do.

I agree that the SLR market can certainly become much bigger than what the film SLR market was 20 years ago.

Hoffman: With the evolution of live view, consumers who did have a point-and-shoot digital camera who were used to seeing that LCD screen when they shoot, now have that option with the digital SLR. And that's also going to be important as they migrate from what they're used to now into the digital-SLR category.

Lee: I think another dynamic to it is that in the film days, a customer bought his camera back when he was in the Korean War and that camera worked forever. And now digital, the technology continues to evolve, so already we're seeing second- and third-time buyers of digital SLR cameras. They've upgraded as the technology continues to drive forward.

Peck: David's absolutely right. We have customers still using models they bought in 1976 and they work fine. There were not tremendous changes in technology in film cameras. Auto focus came, auto exposure came. But the time between those technology changes was years and years. Now you're measuring this in months between these quantum leaps in technology.

Campbell: I think we agree that you're going see more consumers moving into the digital SLR space than you did in the film SLR space. Taking a good picture is very aspirational. Consumers want to make sure that they've got the right product to be able to do that.

Carr: The wild card that we see as we watch this industry is huge consumer electronic giants like Sony, Panasonic and Samsung entering the SLR category. That was reigned by the kings — Canon and Nikon. So it will be interesting to see what these new entrants are going to do to the pricing and features. It will be very interesting to watch that from the side.

Lee: We actually think that's its going to be very positive because we think it will drive the industry. It's more promotions. It's no different than the consumer side of it. But there is a bigger price of entry and I think that's an important thing to note. You have to have the system, the lenses, the accessories and you have to have the heritage.