Nikon Corp. Q3 FY2017 Headlines (Oct 1, 2016, to Dec 31, 2016)
- Overall company Operating Income up +83%
- Overall company Net Sales up +2%
- Imaging Products segment Net Sales fall -23%
- Imaging Products segment Operating Income falls -51%
- Restructuring takes its toll with expenses up to ¥53B
- Troubled and delayed DL range of Digital Cameras - scrapped
Overall Company Results
NIKON Corp. released their Q3 FY2017 results after giving notice of ‘extraordinary loss’ and voluntary redundancy for 1000 older workers. Restructuring the business as outlined in the previous results has come at a cost and the pain is not over yet.
Restructuring is fine if there is a clear plan as to the future direction of the business. With the digital camera market still in free-fall, investors will want to know how the company will maintain its market. The complete abandoning of a segment of cameras that is thought to be one of the more profitable, premium compacts, with the scrapping of the ill-fated DL range will leave people ‘scratching their heads’.
Investors were not impressed and shares fell 15% losing most of the gains made in the last 3 months due to an improving ¥en exchange rate.
Looking at the overall business of Nikon we see a company with rising Net Sales by +2% and improving Operating Income by +83%. This income represents 8.5% of Net Sales and that is a big improvement on the previous year where it was just 4.7%.
Let’s take a look at the overall business structure to see the losses and gains in each sector.
The Canon EOS M6 Mirrorless digital camera is just about to be launched. Already leaked specifications are being made available. What can we expect and will it make any difference?
The M6 will be very much the same as the M5 that was released late 2016. The major differences appear to be the loss of internal EVF viewfinder in favor of the new hot-shoe mounted EVF-D2. This makes the camera smaller with a more retro style whilst allowing for the option of a viewfinder. It should also allow for a lower price point for the camera alone.
- Total shipments of Digital Cameras to decline -10.3% year-on-year
- Built in lens cameras to decline -16.7% year-on-year
- Interchangeable lens cameras to decline -3.4% year-on-year
CIPA the Japanese Camera and Imaging Products Association has again released its predictions for next year's shipments, 2017. These show a steady decline in both major types by -10.3% to 21.7 million units. Built-in lens or ‘compact’ cameras again taking the largest fall of -16.7% to 10.5 million units. Interchangeable lens cameras to fall by -3.4% to 11.2 million units.
Results vs Predictions for 2016
At the beginning of 2016 the predictions for camera shipments were a decline of -12.4% in total camera units. Cameras with built-in lenses were due to fall -16.7% and Interchangeable lens cameras were to fall -5.3%. So how accurate were these predictions?
The total shipment of digital cameras in 2016 was 24.2 million units. This was split between built-in-lens cameras at 12.6 million units and Interchangeable lens cameras at 11.6 million units. Year-on-year this is a total fall of -31.7%, built-in lens cameras fell by -43.7% and interchangeable lens cameras by -11.1%.
The BCN Awards for technology products sold in Japan have been released again to cover the year 2016. These awards are based on actual sales and represent the majority of all sales for each category. They provide a good way of seeing how the major Camera Brands have performed throughout the year.
Digital Camera with Integrated Lens (Compact Camera)
The compact camera market is becoming less desirable and hence more spread out as manufacturers head for more profitable niches. Of those listed Canon again had the largest share with 27.3% but this has to be taken into context with disrupted production caused by the April earthquake that effected the outcome.
Nikon came in second with a slightly improved 22.1% of sales followed by Casio who jumped up to 19.3% of total sales. This still left nearly a third to the other brands.
Rumors of a new Canon PowerShot SX70 HS Bridge camera have been running for some time. These have been based on the current SX60 HS been out zoomed by the new Nikon P900 with its 83X zoom and Canon patents appearing to show a new 100X zoom lens is being developed.
Recently, the SX60 HS has been in very short supply in my ‘neck of the woods’ and that has led to customers expecting a new camera to be announced soon. That along with competition from Panasonic under-cutting on price with bridge cameras sporting wide aperture lenses.
So it is expected Canon will fight back very soon with a camera to compete. But do they go up market with a higher powered zoom or target a lower price for the mass consumer?