Canon Lowers Earnings Outlook

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<p>Canon said it trimmed its full-year compact camera shipment forecasts to 14 million units from an April forecast of 14.5 million units, which it had already lowered from its initial forecast of 17 million units.</p>

<p>In a worrying sign, the company said it is now starting to see an impact on its premium, interchangeable lens products - a highly profitable segment that Canon dominates. Canon said it lowered its 2013 outlook for interchangeable cameras to 9 million units from an earlier projection of 9.2 million units.</p>

<p>While those products had been immune to economic downturns in the past, Canon said this is no longer the case. "Camera consumption is being put off," said Mr. Tanaka, noting that this has led to an inventory build-up.</p>

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<p> <a href="http://online.wsj.com/article/SB10001424127887323610704578625133951026090.html">http://online.wsj.com/article/SB10001424127887323610704578625133951026090.html</a></p>

<p>Perhaps this will lead to decreased prices (in the short term) of currently available new Canon EOS cameras in an attempt to alleviate their inventory buildup?</p>

<p>Just speculation of course ;)</p>

<p>"interchangeable lens products - a highly profitable segment that Canon dominates."<br>

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I wonder just where the WSJ has the data to back up that claim. From what I see out and about, Canon just slightly edges Nikon in dSLR bodies.</p>

<p>Canon needs to wake up and give people what they want. They've been lacking behind in sensor development and their latest lens prices are beyond reasonable. The "M" was a total joke. They need new leadership - desperately.</p>

<p>The article is now blocked for nonsubscribers, so I may be missing something, but the first part of this is completely unsurprising. There has been a lot written for a long time about the negative impact of smartphone cameras on the sales of compact cameras. This affects the industry as a whole.</p>

<p>With respect to interchangeable lens cameras: this could be another story altogether. It would be helpful to know how big the decline is, how it compares to sales by other manufacturers, and which portions of the interchangeable lens market are affected. For example, I vaguely recall reading that Rebels comprise a very large share of Canon's DSLR sales (hardly surprising). Given how some people use the least expensive DSLRs, it wouldn't surprise me to see some drop in sales in that segment too. On the other hand, this might indicate a shift within the industry--e.g., a shift to mirrorless cameras, where Canon certainly is not a leader, or a shift to Nikon and Sony because of sensor technology or prices, as Juergen suggests. However, there is not enough information here (maybe there is in the article) to sort through these possibilities.</p>

<p>Nikon is not listed on a US exchange so the disclosures are not comparable to Canon's 6Ks. I did find a disclosure that Nikon is projecting 14 million digital camera unit sales for 2013. Canon is estimating total interchangeable lens sales over 9 million and 14 million in compact camera sales (down from 17 million in 2012). Canon is quite a bit larger in camera sales, then you add the other products, like copiers and printers and they're in different financial leagues. I couldn't find a breakdown of Nikon's digital camera sales between interchangeable lens and compact cameras.</p>

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<p>Perhaps this will lead to decreased prices</p>

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<p>In modern capitalism, the response to lower sales is to raise the price to make sure the profits stay constant. This is called the "Law of demand and profit." ;)</p>

<p>Right on, JDM. Prices don't drop. Jaws drop when they see the prices.</p>

 

<p>When the world economy is in the pits along with it goes a lot of impulse buying.Maybe a good thing for many of us.My dad always said "if you really think you need something bad sleep on it overnight and see if you still want it in the morning,nine times out of ten you won't and wonder "what was I thinking anyway". People don't have a lot of disposible income left over anymore and the last thing on their minds is another new toy.</p>

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<p>Canon needs to wake up and give people what they want</p>

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<p>Errr... They do precisely that.</p>

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<p>They've been lacking behind in sensor development</p>

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<p>Which - frankly - is largely irrelevant to most of us, who still manage to make fantastic images with the sensors currently available.</p>

<p>This whole thing about Canon's sensors is little more than forum bragging rights fodder - a way for some people to make themselves feel better about themselves thanks to their imagined superior knowledge of the technology and supposed discernment and high standards, compared with those of us who "manage" with (or, God forbid, actually <em>appreciate</em>) the current tech, which is still <em>waaay</em> better than the vast majority of us will ever need.</p>

<p>Even the ones making all the noise about Canon's crappy sensors...</p>

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<p>their latest lens prices are beyond reasonable</p>

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<p>Welcome to capitalism.</p>

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<p>The "M" was a total joke.</p>

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<p>In <em>your</em> opinion. Others seem to love it.</p>

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<p>They need new leadership - desperately.</p>

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<p>Yeah, the management of the company that has led - and still leads - the world in terms of commercial success in the photographic domain, obviously doesn't have a clue...</p>

 

<p>Ten years ago DSLR technology was rapidly evolving and hordes of SLR shooters were transitioning from film. I upgraded with every product cycle of the XXD series. So sales were hot 'n heavy. Today, DSLR technology has matured to the point many of us don't feel inclined to upgrade nearly as often. I'm perfectly happy with the results and performance of my 5D MKII and I've owned it for 5 years, longer than any DSLR, and most of my film EOS. Faster performance, higher ISO, more MP or Wi-Fi/iTunes compatibility would not make any difference in my usage. I'm in pretty much the same place with my lenses. The market is saturated and I don't think it is realistic for DSLR makers to continue with the same kind of growth they enjoyed 5 or 6 years ago. </p>

<p>Okay, if a FF debuted with ECF, I'd probably reach for plastic but otherwise no-go.</p>

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<p>Ten years ago DSLR technology was rapidly evolving and hordes of SLR shooters were transitioning from film. I upgraded with every product cycle of the XXD series. So sales were hot 'n heavy. Today, DSLR technology has matured to the point many of us don't feel inclined to upgrade nearly as often.</p>

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<p>This is surely true and just as surely a factor in the lowered sales projections. What is the marginal utility of this or that improvement, after all? When I got my 5D II back in 2009, I was in awe of it and said aloud: "I will never need another camera."</p>

<p>That remark was probably on the money. Yet, yet, whether we need it or not, we continue to buy. . . up to a point. For many of us, we are at that point.</p>

<p>I wonder what the top end lens sales data indicate. Most of us really cannot afford the Mark II of every piece of good glass that comes along--especially when Mark I was more than good enough.</p>

<p>--Lannie</p>

<p>"Okay, if a FF debuted with ECF, I'd probably reach for plastic but otherwise no-go."<br>

<br />Or even if they put it on the 7DII. I really did like ECF and still don't know why Canon dropped it.</p>

<p>Got to agree about the diminishing sales of prosumer and professional stuff. It is inevitable. Should I get a 5DmkIII? I'd love one but I am not really convinced I will see much improvement over the mkII - I'd like it because has a built in level and more useable non-center AF points - but it is hardly an essential buy, and then there is the new 24-70 - a great lens, but is it really worth the $1000 premium over version 1? Doubt it. I am not alone, all my photo acquaintances who use Canon are in the same frame of mind. Then there is mirrorless cutting into consumer DSLR sales.</p>

<p>Juergen's points seem completely bizarre to me.</p>

<p>Robin, not to hijack the thread, but for those that need the 5D3's incredible AF system and doubling in fps, it's a bargain, competing with the 1D series at half the price.</p>

<p>I think this is mainly down to the impact of mirrorless system cameras. How many people are now using Sony NEX, Olympus PEN or OM-D that would normally have chosen a DSLR? I wouldn't mind betting that Nikon are feeling the pinch in the same way too because their mirrorless cameras are also fairly bland. Sony and Olympus, on the other hand, will be booming. Their cameras are flying off the shelves. Every sale they make is one less for Canon and Nikon.</p>

<p>Canon and Nikon need to wake up and get their mirrorless cameras sorted. They are being left behind rapidly.</p>

<p>Mirrorless is indeed impacting Canon/Nikon DSLR sales, but the BIG problem is iPhone and such destroying the P&S market.</p>

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<p>Mirrorless is indeed impacting Canon/Nikon DSLR sales, but the BIG problem is iPhone and such destroying the P&S market.</p>

 

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<p>I would tend to disagree with that David. The impact of camera phones has long since peaked. One thing that a camera phone does not have is an optical zoom lens. That is one feature that continues to drive people to buy a compact camera. I am in the trade and get almost daily requests for a compact camera "with a decent zoom". I think the fall in digital compact sales is down to a couple of things:</p>

 

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<li>The megapixel race is over and consumers are often happy with the camera they already own and are now presented with fewer incentives to upgrade.</li>

<li>The compact mirrorless system cameras now attract customers that would normally have been attracted to compact bridge cameras. The loss of bridge camera and high end compact sales is quite noticeable. For example, the Canon G line (G15 etc) is now as good as dead because mirrorless systems are almost as compact with far superior image quality at a comparable price. </li>

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<p>Jamie, you're not disagreeing with me, you're disagreeing with Canon. Your conceptual argument doesn't hold water with actual unit counts. Canon's projections of its compact camera unit sales for 2013 have fallen from 17 million to 14.2 million and now 14 million. Unit sales in 2012 were even higher, but I can't find the actual number right now.</p>

<p>I subscribe to WSJ, but most here probably don't and probably couldn't see the link in the OP, so it's understandable that you might have missed those numbers. I still own Canon stock for the long-term, but it's a very small part of my portfolio.</p>

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<p>Canon's projections of its compact camera unit sales for 2013 have fallen from 17 million to 14.2 million and now 14 million. Unit sales in 2012 were even higher, but I can't find the actual number right now.</p>

 

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<p>That's exactly what I'm saying. If anything, those people are now buying mirrorless system cameras instead of the high end compacts. That would explain the drop in Canon's sales.</p>

<p>Canon's mirrorless camera sales are included in the Interchangeable lens category for purposes of business segment reporting. Interchangeable lens sales are also down at Canon, slightly. They're losing some mirrorless sales to Sony and maybe Fuji, but compact camera sales are down due to improving camera phone quality with iPhone and other competitors, not mirrorless camera producers.</p>

<p>I don't think I made my original post clear enough. That's what i was saying. Canon's sales are down overall because their mirrorless system cameras are poor, leaving people no choice but to buy from other manufacturers. </p>

<p>Jamie, if that's what you're saying, you're wrong. Read Canon's earnings release. Canon's sales are down due to lost compact camera sales, going to improved quality camera-phones. Interchangeable lens cameras are still selling strong and at high margins. Unfortunately they don't break the interchangeable lens category down between mirrored or mirrorless, but it's almost the same as in 2012. Their press release talked about overall weakness in sales to China, but there was no breakdown between compact cameras and interchangeable lens cameras, much less mirrored and mirrorless.</p>

<p>I searched through all kinds of financial data and press releases and couldn't confirm where Canon classifies it's mirrorless camera sales in its segment information. It's either in "Compact Cameras" or "intechangeable Lens" cameras, since that's the only two categories that they have. My guess that the M is in the interchageable lens classification, but I can't be sure.</p>

<p>It'll be interesting to see if Canon takes advantage of its huge advantage of lenses in the market to sell mirrorless interchangeable lens cameras into a huge market. I think it's five-years away, but I'm looking forward to attaching a little Canon box to the back of my 500mm lenses and popping of 30-fps stills. AF has a long ways to come in the mirrorless world, but I bet Canon will do it. The mirror just gets in the way when electronic shutters are so efficient and quiet.</p>