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Growth Returns To d-SLR, Hybrid Cams


Last year, one of the shining stars of
U.S. camera business was the d-SLR, as consumers
in increasing numbers looked to advance the limited
shooting experience they enjoyed using smartphones
and highly automatic point-and-shoots with
more elaborate models allowing creative flexibility.

Come 2011, a combination of sustained economic
doldrums and the shock of the tragic tsunami
in Japan limited last year’s impressive growth rates
somewhat as a number of factories struggled to get
back online.

But several recent positive indicators has two leading
U.S. camera market analysts bullish on improved
growth for the interchangeable-lens camera segment
(known as d-SLRs and mirror interchangeable-lens
cameras) in the second half of this year.

The NPD Group’s senior imaging industry analyst
Liz Cutting told TWICE, “Supply, more so than the
economy, does seem to be impacting d-SLR sales.
Detachable-lens camera sales were delivering consistent
double-digit year-on-year increases since
March of 2010. Then in May 2011 we went to a sudden
decline of 6 percent.”

She pointed out that the week of Mother’s Day,
which is typically a great sales week for camera
sales, “still saw d-SLRs in decline, but Father’s Day
week brought us back into positive d-SLR unit momentum
as a whole, even at higher price points, even
with continued supply constraints.”

Similarly, IDC world digital imaging solutions research
manager Chris Chute said softness in the
d-SLR business this year “looks like a combination
of the tsunami effect on distribution in April and May
and the continued soft economy.”

Still, Chute said IDC expects camera vendors to offer
interchangeable-lens cameras as compact-camera
alternatives this year, at “attractive price points
below $500” to spark demand.

IDC predicts more than 4 million d-SLR units shipping
to the United States this year, and mirrorless
interchangeable-lens camera sales to top 1 million
units, assuming either a Nikon or Canon entry this
year “at those low price points.”

Despite significant percentage sales growth, the mirrorless interchangeable-lens camera segment seems
to be a minor factor” on the weaker d-SLR business,
Chute added.

Cutting said “mirrorless hybrids grew from next to
nothing in May year to date (YTD) 2009 to 8
percent of the detachable-lens camera market
YTD May 2011, and 5 percent of revenue, but
that pales compared to the share they are establishing
in Japan.”

According to NPD, U.S. d-SLR sales YTD in
May 2011 were up 6 percent in units and 8 percent
in dollars while mirrorless hybrids grew at
well over 100 percent in both units and dollars.

“However we don’t believe the hybrids are
growth of the d-SLR market,” she said. “NPD’s
`Next Camera’ study conducted at the end of 2010 revealed
that those most likely to buy a mirrorless hybrid camera were
current d-SLR owners looking for a smaller second camera
to carry along.”

The primary attractions to compact mirrorless models, she
said, are less shutter lag, higher performance in low light,
and ease of portability.

Consumers “want the capability of a long zoom, but
lens interchangeability isn’t necessarily at the top of their
list. They want function without complexity. For this audience
a higher-end compact camera may well fill the bill,”
said Cutting.

Awareness rates of mirrorless hyrid cameras in the U.S.
are still quite low, she said, “and it takes time to build not only
awareness but desire among a compact step up audience
like young women. I think these cameras are going to need
a stronger share of voice in the marketplace to drive that desire,
but the potential is there.”

IDC’s Chute said he expects camera manufacturers to
continue adding more options to both the d-SLR and the
compact interchangeable-lens (hybrid) camera segments
this year.

“I predict that as we saw with [the recent] Olympus Pen
announcement, vendors will position low-end d-SLRs and
mirrorless models as point-and-shoot alternatives
at $400 and below price points,” he said.

Chute pointed out that in the interchangeablelens
camera business, two key trends are now
playing out:

“One is from Panasonic, Sony and Olympus,
who are seeking to gain share in the interchangeable
lens camera space. The other is Canon and
Nikon seeking to fend off these competitors and
maintain share. This is happening on a global level,
so Canon and Nikon are likely looking at offering
mirrorless cameras, which provide a smaller
footprint, as competitive offerings to those from the former
vendors,” Chute said.

As for retail channels capitalizing on the mirrorless interchangeable-
lens camera space, Chute said “mirrorless
seems to be gaining some traction in Best Buy, as we see
Sony and Olympus end caps and special displays at the
camera bar feature this type of product.”

As for other channels, NPD’s Cutting said that “in the
early days of the mirrorless hybrid cameras, it was the photo
specialty channel that sold the majority, and despite a more
mainstream distribution for mirrorless hybrids we continue
to see the specialty channel take a big piece of the action.

“Photo specialty dealers should welcome mirrorless hybrid
cameras with open arms,” she continued. “The opportunity
for the specialty dealer is to use and build the compact
system camera buzz to introduce and educate
consumers on how to use them and how to outfit

For the holiday selling season, IDC’s Chute said
he is looking for manufacturers to step up promotions
and advertising around the d-SLR and mirrorless
interchangeable-lens camera categories.

“Not necessarily Black Friday promotions,
as deals around that one day tend to be more
door-buster in nature,” Chute said. “Still, for
that weekend into Cyber Monday, I would expect
price drops, rebates and more for the interchangeable-
lens camera segment.”

As for the impact of the new interchangeablelens
camera activity on the advanced point-andshoot
camera market, NPD’s Cutting said one
of the price point ranges “with the least decline
in the compact arena has been $300-plus cameras,
where primarily d-SLR manufacturers own
the space. So we’re seeing growth in d-SLRs, a
slighter decline than average in higher-end compacts
and the rise of the mirrorless hybrids.”

At the entry end of the point-and-shoot market,
Cutting said that despite the constant talk
of the smartphones cannibalizing compact
cameras, “we have seen recent success within
the sub-$100 camera space, where bigger
brands are playing more and consumers are
replacing existing cameras with those they consider
“good enough.”

“What consumers are also telling us is that the
more money they are willing to spend on a camera,
the more brand loyal they are going to be. As
we know, most d-SLR sales are Canon or Nikon.
Either’s entry into the hybrid market could prove
the catalyst to the next growth spurt.”