Imaging Industry Bowed But Undaunted

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NEW YORK – If Bob Dylan was an imaging technology analyst, he might be penning market forecasts today that sound something like: “Oh mama. Can this really be the end? To be stuck beside a mobile with the imaging blues again.”

Indeed, the once-propitious U.S. digital camera industry has fallen on increasingly difficult times over the last several years.

But the combined effects of sustained economic trepidation among consumers and relentless improvements in digital photo taking quality and flexibility from the highly popular smartphone and tablet categories has not deterred a sanguine outlook for dedicated cameras among the top U.S. camera marketing executives.

This year, most executives have conceded a bulk of the low-end point- and-shoot business to their mobile device challengers, in favor of playing up the superior image quality afforded by more advanced dedicated cameras with greater low-light sensitivity, long-zoom portrait framing flexibility and WiFi connectivity. The hope is to maintain respectable dollar growth in key segments heading into the critical holiday selling season.

TWICE convened a virtual roundtable of some of the industry’s key U.S. sales and marketing executives for insight on where the business is headed in the second half and beyond.

TWICE:How have digital camera sales been so far this year?

Chris Chute, IDC: In 2013, U.S. digital camera sales fell 34 percent to 15 million units, which is an acceleration in the rate of decline when compared to 2012 (-26 percent). Furthermore, camera sales for the first quarter of 2014 fell 50 percent. Clearly, the market is in a free fall.

Mid- to high-end interchangeable- lens cameras (ILCs) are still popular, since the buyer for these models is passionate about photography. Mobile-first products, which IDC defines as devices designed primarily for connecting users through wireless networks and hosted applications, namely smartphones and tablets, continue to be very popular. Finally, the point of view, or action camera market, is also a popular category.

U.S. ILC sales fell 19 percent as weak demand during spring and winter holidays dampened market growth. For the first quarter of this year, U.S. ILC sales fell 42 percent. Average consumer demand for ILCs has abated as these buyers shift their wallet share to mobile-first devices.

Ben Arnold, The NPD Group: For our most recent 12 months of data- 12 months ending May, sales of point and shoot are down more sharply (-36 percent in revenue) than they were the prior 12 months. Additionally, sales of detachable-lens cameras are down 22 percent in the most recent 12 months. I’d say for our most recent 12 months of data, declines in both camera categories have sharpened.

Eliott Peck, Canon: The traditional camera business is still declining with the biggest falloff being entry-level compact camera models. Where we see potential for growth are long-zoom, low-light-capable and Wi-Fi-enabled cameras, all of which offer opportunities for photographers to step up and achieve higherquality images than their smartphone can provide.

Our line of high-end PowerShots with long optical zoom ranges, HD video and low-light capabilities continue to perform very well as many people aspire to be better photographers and realize the limitations of their smartphones. Our Rebel line and higher-end DSLRs, such as the EOS 70D, that provide photographers with the ability to shoot not only high-quality still images but HD video too are doing very well. Professional DSLRs, such as the 5D Mark III and Cinema EOS products, are seeing great success in the documentary film space as these cameras offer great performance and fit perfectly into a videographer’s workflow.

DSLRs are a logical step up from entry-level compact point-and-shoots and smartphones. And nothing can compare to the quality and flexibility of a DSLR camera. Those wanting to do more, add lenses and seek our education have been a source of new business.

Masahiro Horie, Nikon: Digital camera sales this year have followed a similar trend as in the past, with high points around the holidays, and similar spikes at key times throughout the year, such as Mother’s Day. Overall, we have a seen a decline in the compact digital camera market, especially in the budget-friendly compact camera segments. Strong sellers remain the long-zoom bridge-type cameras, such as the P600 and P530 performance series cameras, and the budgetfriendly L830. According to The NPD Group’s Retail Tracking Service, the L830 was a top seller in sales volume and revenue for both Mother’s Day and Father’s Day weeks (2014) respectively. Consumers still have a need for the versatility and portability that long zoom cameras offer for vacations, sports or any life events

In the compact ILC category, U.S. customers are most attracted to our Nikon 1 AW1 rugged camera that has experienced strong sales. We also recently introduced the Nikon 1 V3, an advanced camera. Initial demand for this model has been very high, and we are working to fulfill this demand at retail.

While the overall DSLR market has declined by approximately 17 percent in units through May 2014, according to NPD, Nikon DSLR sales have performed above the current market in both units and sales dollars.

We see the strongest performance from the D5000- series (D5200/D5300) and D3000-series (D3200/ D3300) cameras for the entry-level to budding-enthusiast category. DSLR sales also translate into accessory lens sales, and Nikkor lenses continue to offer an excellent value for consumers.

Manny Almeida, Fujifilm: Digital cameras sales are performing well despite a very challenging market because consumers are focusing on the features that are most important to them — image quality, design and functionality. For example, the Fujifilm X-series CSCs [compact system cameras] and lenses are outperforming the category because users are realizing the benefits of an APS-C sized sensor in a compact body. … The new weather-resistant CSC X-T1 is redefining the category with its combination of image quality, design, features, and a robust range of prime and zoom lenses.

Specialized point-and-shoot cameras remain attractive to customers because they do more than most camera phones; they can be waterproof, have large tilting screens and provide long zoom ranges for more picture-taking opportunities. And for those users who want the ultimate in long zoom, the FinePix S1 is seeing strong sales by combining weather resistance with an easy-touse bridge-style body that has a wide range of shooting capabilities.

Instant film photography is also outperforming expectations. The Instax line of cameras and the new Share Printer have seen incredible interest from consumers.

Darin Pepple, Panasonic: Sales have been brisk, particularly in our ILC categories. Longzoom point-and-shoots remain stable, with growth coming to specialty models featuring 4K video technology. The top performing sector has been our G-series CSCs, particularly our professional models and those that have 4K video capability. Add-on lens and accessories related to these models have also contributed to our growth.

Jay Kelbley, Samsung: Samsung has continued to enjoy growth and market share gains in the CSC and point-and-shoot spaces. We have moved up to the number two position both internationally and domestically in the CSC market. This is thanks in large part to Smart cameras like the NX30, NX300 and NX Mini that possess Samsung’s Smart Camera 3.0 technology.

Scott W. Hardy, Polaroid: For Polaroid, camera sales have been strong this year, and we expect this to continue as we prepare to ship two new hero products this fall: the Polaroid Cube lifestyle action camera and Polaroid Socialmatic instant digital camera. Both of these cameras are very innovative and highlight the brand’s key features of being able to capture and share life’s most important moments, while on the go. Additionally, Polaroid Fotobar opened a flagship retail store at The Linq in Las Vegas this spring.

Mark Weir, Sony: It’s widely acknowledged that major categories in imaging have declined at double digit rates vs. prior year.  However, there are some subcategories which have shown growth or only slight declines — including mirrorless, full-frame interchangeable lens cameras, premium compact cameras and point-of-view camcorders. Ironically, the traditional subcategories still represent the largest unit volumes, but they also show the weakest or negative growth.  The emerging subcategories are showing the greatest growth, including, but not limited to, mirrorless, full-frame ILC, premium compact, long-zoom vompact and POV camcorder.

It’s been suggested that the double digit declines in conventional DSLR are the result of lack of innovation or any compelling reason to replace or upgrade.  Even so, the declines vs the past year have not been as great as some had forecasted originally.  Future growth will largely depend on the development of new compelling reasons to purchase, which so far, haven’t yet appeared.

Mark Sherengo, Ricoh Imaging: Even though there has been a decline in the market, we have been able to increase our sales with the 645Z and the Theta 360 spherical camera. Despite a general reduction in DSLR sales, because we have added entry-level, mid-level and professional level cameras, we have been able to see an increase.

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