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Canon's imaging division reports an 81% drop in Q1 operating profit amidst a 23% drop in sales; smartphones are to blame

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Posted · Original PosterOP

Not too long ago, Canon predicted that the traditional camera market will be halved over the next 2 years owing to the rapid improvements in smartphone imaging technology and the relative ease in sharing them. While others like Fujifilm are more optimistic, it seems that Canon's predictions might bear fruit, as the imaging division recently reported a drop in operating profit by roughly 81% compared to the same quarter in 2018. One primary cause for this? A 23% drop in overall camera sales, with smartphones being a primary factor alongside the economic slowdown in China and Europe. 

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That amounts to a decline from ¥25.7 billion ($229.8 million / £178.4 million) last year to ¥4.7 billion ($42 million / £32.6 million) this year. This doesn’t take into account a further ¥1.9 billion ($16.9 million / £13.2 million) deficit in operating profit from broadcast and cinema cameras, which were assigned away from the Imaging Unit.

 

As foreshadowed by Canon CEO Fujio Mitarai’s now infamous prognostication that the camera market could shrink by half in two years, the company reiterated that the decline will be ongoing and is due to smartphones. 

One strategy Canon is contemplating is to put future DSLR development on the backburner and focusing their development efforts on mirrorless, given the launch of the RF mount and the EOS R late last year and the more recent launch of the relatively affordable EOS RP, which according to Canon, is selling quite well.

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Sales of Interchangeable-lens cameras were down 19%, to 850,000 units over the 12-month period. To put that into perspective, Fujifilm sold almost 900,000 instax cameras every month over a similar period of time. Canon cited “accelerated market contraction” for DSLRs, especially entry level cameras, as well as the economic lull in the lucrative Chinese market. 

 

“For the market overall, however, we expect the trend of market contraction to continue for some time. In light of these circumstances, we decided to reexamine our full-year projections for the market and our own unit sales. We now expect the market and our own unit sales to decline 17% to 8.6 million units and 4.2 million units, respectively.”

 

Accordingly, the company has identified mirrorless cameras and particularly the RF mount systems as its future. “Amid this situation, we will steadily shift our focus from DSLR to mirrorless cameras with the aim of maintaining our overwhelming competitiveness, which we have built upon DSLRs.”

While the outlook does appear quite gloomy, Canon expects demand for its enthusiast and professional cameras to remain quite stable. 

 

Personal take

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One important distinction here is that the decline primarily affects Canon's entry-level SLR sales such as the Rebel line. That much makes sense since the Rebel line has formed a major part of Canon's bread-and-butter and having a drop in sales there would have had quite an effect on Canon's overall performance. 

 

With all that said, I don't think the traditional camera market is dying, necessarily. More accurately, it's undergoing a market shift. 

 

The modern smartphone is honestly more than capable of satisfying many casual shooters, given their rapid improvements in IQ and overall performance over the last couple of years thanks to computational photography. This means there will be less of a reason for casual shooters to pick an entry-level dedicate camera for their typical casual shots, especially when these involve automatic modes. However, enthusiasts and professionals will more than likely stick to dedicated cameras, especially those with better sensors and better features for a more professional oriented workflow. 

 

So while the entry level/casual end is certainly going by the wayside, the enthusiast and professional end is unlikely to go anywhere. 

Source: Digital Camera World

Official Canon report


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The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 


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10 minutes ago, DrMacintosh said:

The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 

It's way more fun and ergonomic to take photos with. Also, image quality still is better. 

(I am not talking about those 300€ cameras, they can die)


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9 minutes ago, DrMacintosh said:

The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 

There's always going to be a market for DSLRs, even for people who do have smartphones with great cameras.

Thing is, smartphone cameras have gotten really good and are more practical for a lot of people. DSLRs still hold their merits, though: they'll always have an image quality advantage just based on sensor size alone and they'll almost always offer more customization for image settings and shit compared to most phones and especially iPhones.

720p60 shooting on iOS when apple reeeeeeeeeee


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Just now, Mihle said:

It's way more fun and ergonomic to take photos with.

Subjective. Also I don’t see how carrying an extra device is more ergonomic. 

 

Not saying you shouldn’t keep using DSLRs if that’s your thing. But I’m just explaining the rationale behind the market trend. 


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4 minutes ago, DrMacintosh said:

The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 

As a landscape/atmospheric photographer, here are my reasons:

  • A cell phone can't be used for long exposures
  • A cell phone can't easily be mounted to a stable tripod for level shots with no cropping needed
  • A cell phone camera is designed at its heart for short-range shots. That's why long-range shots and highly-zoomed photos look grainy on cell phones, even Pixels.
  • A cell phone isn't going to give you a raw-formatted image that can be easily altered without losing the original image fidelity in the process
  • A halfway-decent DSLR will still give you a better picture than any phone on the market today

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1 minute ago, handymanshandle said:

720p60 shooting on iOS when apple reeeeeeeeeee

Lol, yeah it is weird that there is no 720p 60fps option xD 


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Ok people, I get that we have photographers on the forum. I’m talking about regular people. 


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Posted · Original PosterOP
5 minutes ago, DrMacintosh said:

The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 

A lot of reasons, actually. 

 

  • Better IQ from a single exposure 
  • More flexibility in focal length and aperture options. 
  • Better ergonomics for extended use
  • 10-bit 4:2:0/4:2:2 LOG recording on some cameras (LUMIX GH5 and Fujifilm X-T3) 
  • More natural background blur 
  • Less rolling shutter
  • And more 

But, let's make an important distinction. Everything I said above is really only going to appeal to enthusiasts like me and some professionals may even find them necessary. 

 

Ask a casual user and they'll probably shake their heads in confusion over what 10-bit LOG is, or whether they can really see much of a difference between natural bokeh and software phokeh. 

 

The truth is that there are still many reasons on why people would still want a dedicated camera. It's just that many of those reasons are irrelevant to the casual crowd. 


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Just now, DrMacintosh said:

Lol, yeah it is weird that there is no 720p 60fps option xD 

That's honestly something that annoyed me to no end on the iPod touch and something that still annoys me to no end on anything with a better camera than that.

It's specific and bizarre, I know, but I kinda don't wanna shoot in slow motion just to shoot at 720p at a good frame rate.


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15 minutes ago, DrMacintosh said:

The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 

Because for professional work, you need professional tools. A 1000€ smartphone, despite its high price isn't one no matter how awesome its camera is. Also, no one will take you seriously if you come as a photographer of a wedding and you take pictures with a phone... Besides, physical control of the camera is what you need for pro or even advanced work because it's just faster than smearing your finger over a touch screen. And you need that unless you want to miss a moment you don't want to miss.

 

I think phones are great for casual users, because this way you have camera with you at all times and they make amazing photos these days. But for professional work, I'd still use a dedicated DSLR camera.

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II used to be heavily into photography, I bought a middle of the road DSLR a few years back,  since phones have gotten better and the camera is so bulky to carry I have hardly used it. I will not be buying another. 


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12 minutes ago, DrMacintosh said:

Subjective. Also I don’t see how carrying an extra device is more ergonomic. 

 

Not saying you shouldn’t keep using DSLRs if that’s your thing. But I’m just explaining the rationale behind the market trend. 

I bet most of those that stop buying them isn't hobbyist photographers, but rather those that got them for documenting holidays and stuff anyway. 

 

I have a mirror less and not a a DSLR, but it's almost the same thing in this discussion really.


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Posted · Original PosterOP
2 minutes ago, Mihle said:

I bet most of those that stop buying them isn't hobbyist photographers, but rather those that got them for documenting holidays and stuff anyway. 

Yeah, it's the casual users that have made the move to phones. 

 

The hobbyist, enthusiasts and professionals are still sticking with the traditional camera, whether it has an optical viewfinder (DSLR) or an electronic one (mirrorless ILC) 


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17 minutes ago, DrMacintosh said:

Subjective. Also I don’t see how carrying an extra device is more ergonomic. 

 

Not saying you shouldn’t keep using DSLRs if that’s your thing. But I’m just explaining the rationale behind the market trend. 

I personally like the bigger thing you have in your hand with an dslr, allows me to hold it steadier. Though as you said, subjective.

But I stick for the joy a dslr gives me while shooting with something like this, the manual feel is not replicable on a smartphone


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Posted · Original PosterOP
2 minutes ago, 19_blackie_73 said:

But I stick for the joy a dslr gives me while shooting with something like this, the manual feel is not replicable on a smartphone

Whenever you can, find the opportunity to get a chance to play with one of the midrange/high-end Fujifilm cameras (X-E/X-T minus X-T100/X-H). 

 

I have the X-T3 as my primary camera and those analogue dials on the top to adjust ISO and shutter speed are just so satisfying, especially the clicky tactile feedback they give. 


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ever since i got a phone that has a standard and a tele camera i've been taking more photos. doesn't mean i'd replace my DSLR entirely ._.

 

if canon really wants to compete in the phone camera space, they'd be going against sony's phone camera modules

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I wouldn't worry about Canon too much; for one, as they've indicated, they see their future in imaging in the professional and enthusiast market, and Canon has other business lines that can sustain them in the long term as well. Ditto Sony, and some of the other camera makers.

 

Of the ones most exposed to a decline in market size in stand-alone cameras, I would say Nikon is the most exposed; for one, their imaging division is half of their annual revenue, compared to Canon. And Nikon doesn't control their supply chain, especially for sensors; they buy their sensors from Sony, while Canon primarily makes their own.

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48 minutes ago, DrMacintosh said:

The best camera is the one you have with you. With people owning great smartphone cameras thanks to optical zoom lenses, computational photography for features like smartHDR and Extended Dynamic Range for video, stellar video and still quality, why would you buy a DSLR? 

Better image quality and more freedom on taking them. 

 

Smartphone camera is nothing compared to DSLR. 

That is why most of the times when there is a new phone announcement with supposedly great camera they will use sample image taken with DSLR. 

 

With DSLR we can control the aperture and shutter speed to create the image we desire and it has macro lens for close up Pic and Telephoto lens for sport/wildlife photography. 

 

Let's put it this way.. I never see a professional photographer use smartphone as their primary gear and probably won't be for the next 50,100 years heck idk. 

 

Smartphone camera is for convenient. but for someone who is really serious about their pics I am sure they will use DSLR for it. 


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3 minutes ago, Hiya! said:

With DSLR we can control the aperture and shutter speed to create the image we desire and it has macro lens for close up Pic and Telephoto lens for sport/wildlife photography

the more important point is the size of the sensor ._. it's mostly impossible for any AI to fake the shallow DOF for every single environment case

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Posted · Original PosterOP
9 minutes ago, ThePointblank said:

Of the ones most exposed to a decline in market size in stand-alone cameras, I would say Nikon is the most exposed; for one, their imaging division is half of their annual revenue, compared to Canon. And Nikon doesn't control their supply chain, especially for sensors; they buy their sensors from Sony, while Canon primarily makes their own.

Nikon is definitely the most vulnerable, alongside others like Olympus, whose imaging divisions make up a significant bulk of the company. 

 

Canon is quite diverse, and Sony even more so. Even Fujifilm is doing quite well thanks to its Astalift division. But Nikon is going to be getting it real tough. 


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Also, I bet Canon is the one of the camera makers that will lose most sales of all of them in %. One exception might be m43 cameras, but who knows yet.

 

I am not talking like total for the company, just cameras itself 


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1 minute ago, Mihle said:

Also, I bet Canon is the one of the camera makers that will lose most sales of all of them in %. One exception might be m43 cameras, but who knows yet.

Considering Canon absolutely dominates the market (they just celebrated being number #1 in sales in interchangeable lens digital cameras for the 16th year in a row), that's a bit like saying the tallest guy is going to get hurt more when he falls over.

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1 minute ago, VegetableStu said:

the more important point is the size of the sensor ._. it's mostly impossible for any AI to fake the shallow DOF for every single environment case

And the lens.. Most DOF I saw even from top end smartphone made me laugh its like they are trying so hard to fake it.. The AI be like "hey that is not people, let's put lots of gaussian blurr behind them" 😛


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Posted · Original PosterOP
2 minutes ago, Hiya! said:

And the lens.. Most DOF I saw even from top end smartphone made me laugh its like they are trying so hard to fake it.. The AI be like "hey that is not people, let's put lots of gaussian blurr behind them" 😛

I think the DoF is mostly affected by the distance. Specifically the focal length of the lens in relation to the distance between it and the subject and the distance between the subject and the background, with aperture playing a second role. 

 

I don't think the sensor size directly affects it, moreso its crop factor. 


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