TWICE:The entry end of the d-SLR market certainly saw a lot of activity this year, but price compression seems to be impacting that business's profitability. How do you generate interest in the higher tickets?
Zani: I think technology is going to drive profitability. I think that driving profitability also means educating a consumer to why they need to upgrade from a point-and-shoot. One of the things that we do to educate them is in our K-2000. I think we were the first to come out with a Help button that was right on the SLR bodies because most consumers don't read the 175-page manual that we insert in the product. It allowed our consumers to use that product, and then because of the education we offered in stepping up from a point-and-shoot, the span is shortened in which somebody would upgrade from an entry d-SLR to a higher-end model, because they knew how to use the camera. What we drive in compacts and in SLRs is weather resistance. Not just in our bodies and not just in point-and-shoots but also in lenses. HD video is a driver of, I think, new upgrade sales, and soon we will see HD video even further down the line on SLRs.
Pepple: I don't know about the SLR business but in the point-and-shoot segment it's no secret that we're in a year of re-tooling the business. I think what has really spurred that on are the economic conditions loosening a lot of different distribution channels in the CE and even photo specialty sectors. To stay above these price points, you need more technologies. We found a lot of photo channel dealers still have that classic photo experience where people want to come in and experience a product.
We are taking risks in developing new high-end features. We did it with our high-speed technology for example, which really gave us about six or seven different sub-technologies. One of them was slow-motion photography. One of them eliminated shutter lag with a point-and-shoot camera.
Pellegrino: First we need to offer innovative products and services. We're in constant communication with high-end professionals through our NPS program, which, in turn, helps us understand the needs of photographers at this level. We then focus our innovation on anticipating and meeting their needs. As a result, we're able to bring relevant, cutting-edge technology to market for our professional customers. We also think about how different technologies we develop can positively impact the experience of photographers at any level. We take a look at all innovations and feature sets and, when possible, incorporate them across our entire portfolio. Some innovations may come from our higher-end cameras, while some may come from our Coolpix. The common denominator is that all are proven technologies on which customers can rely, which, in turn, helps drive interest.
We also work with our retailers to drive sales through our instant-savings programs, which provide additional incentives for consumers purchasing higher-end cameras. This adds one more element to the overall positive consumer experience Nikon offers.
When money gets tight for consumers they really tend to look for products with high quality and value, and they start to really depend on brands they can trust like Nikon … For Nikon, our complete imaging system really supports and drives our d-SLR sales with our complete range of lenses and speed lights and accessories.
Weir: Consumers in the d-SLR market are looking to take the pictures that their current camera does not. Making digital SLRs affordable, making them easier to use, taking away the steep learning curve, helping people migrate from the compact camera to the digital-SLR shooting experience so that they're comfortable with it and they can evolve with their photography is something that we spent a lot of time with ... Giving them a camera that will allow them to take the pictures that they are not taking today is something that's going to be very motivating for a lot of customers.
Troy: Consumers are evolving their photography, and I think that's really key for all of us because they are looking for that next step, that next enhancement that is going to give them better opportunities. At the end of the day they are looking for better image quality. They are looking for a way to take a better picture, whether it's a specification or a feature, whether it's a sensor technology — Fuji has kind of adopted the philosophy of every picture matters.
TWICE:Olympus recently introduced a hybrid product using Micro Four-Thirds technology that is appealing to a segment of the d-SLR market. Why is a hybrid segment needed when d-SLRs are thriving and coming down in price?
Flagg: Well, because of that success that traditional SLRs or mirror-based products have enjoyed, there is still this group of consumers that are out there that would like a full-size sensor and would appreciate the opportunity to change lenses, and to have the shot-to-shot speed that is associated with the SLR that hasn't be available in a compact, but don't want the size and the complexity that is associated with taking it out of program mode. Micro Four-Thirds is a capture device on multiple levels. It allows people to shoot HD video at 30 frames a second along with outstanding still images and very high-quality linear PCM audio with a camera footprint that has not yet been introduced in the market place. We are very optimistic about the initial sell-through. Retailers are extremely excited because there are accessory sales that can be generated from it.