May is normally a holding month in camera shipments following the main push in April. Since April was well below par, May needed to be a strong month to meet the northern hemisphere summer holiday demand. Sadly, on April 16th a series of earthquakes in Kumamoto Prefecture, South Japan caused extensive damage to manufacturing facilities of camera components that would severely diminish camera production. The latest camera shipment figures released today by Cipa give the first indication of the scale of the problem the industry faces.
We will take a look at the market as usual by camera type and geographical zone to get the bigger picture. The DSLRs vs Mirrorless Interchangeable Lens Cameras (MILCs) battle will also be addressed as well as the average price for each camera type and zone. Firstly, the overall global picture for May 2016 as reported by the industry body CIPA Japan.
The first point to note is the fall in overall global unit shipments of all types to all zones were down -45.6% when compared to the same month the previous year. That is a huge fall for any industry and is clearly being borne out by the lack of stocks in camera stores across the globe. Not all cameras were affected though so there are some cameras with plenty of stock to sell.
The total value of shipments of all types to all zones was down -39.7% in Yen when compared to the same month the previous year.
One of the effects on the shortfall of camera production is that local markets in Japan and Asia have had a greater share than the European or Americas markets. Whilst this has definitely hurt the latter this may be due to many different reasons such as the camera type, better profit margins or various production issues.
In terms of Total Value of all cameras shipped, Asia has definitely had the lions share of the camera shipments, likely due to it's closer proximity and higher unit value.
No good news here, just down, down and down.
Whilst this is down across all geo-regions at least it is not as far down as the unit shipments due to rising unit values.
So here is the good news, average unit costs continue to improve in all areas, just. We will see where this improvement comes from later in the camera type analysis.
Trends in unit sales are obviously going to suffer but at least when production problems recover it will give a quicker indication of where the bottom of the market lies.
The trend is down in all geo-zones in terms of total value. This may be due to current currency fluctuations, still not good for the overall business.
The average unit price in Yen continues to trend up in all geo-zones. Europe is still buying more low cost cameras where Asia is buying more expensive models.
Despite the drop in unit sales and revenues, the average unit cost is still trending up. This trend has taken a leap upwards with the value of the Yen appreciating last month. The currency wars continue as regions vie to improve their exports by manipulating their currency. Jury out on where the future lie on this one.
The fall in market share for compacts has accelerated as production falters and they lose ground to DSLRs and Mirrorless cameras. Down by another 5% over the last 6 months. DSLRs have gained the most ground as production has probably affected them least. DSLRs up another 3% in the last 6 months and Mirrorless up just 0.5% above the 12 month average.
From a Total Value viewpoint, it is a similar story except the unit value of compact cameras has held up whilst the unit values of DSLRs and Mirrorless have fallen over the last few months.
Year on year comparison for May 2016 shows a huge -53.1% decline in units shipped for Compact cameras. DSLRs see a fall of 30.4%. Mirrorless also showing a fall in units shipped by -41.2%. The big question is will the industry ever recover these losses?
In total value terms the picture is very much similar except Mirrorless have not fallen as much due to higher unit value.
Compact cameras have shown a rise of 5.4% in average unit cost. DSLRs have lost -5.8% in average unit cost. Mirrorless have still shown a healthy rise in total value and a 15.5% rise in average unit cost.
The ongoing trend for unit shipments confirms Compacts are still falling whilst DSLRs and Mirrorless have also been hit by production issues on top of a falling market. The rate at which Compacts are falling has accelerated over the last few months.
Overall revenues have dropped for all camera types but Compact cameras lead the way down.
Average unit values have been rising over this period but with Mirrorless continuing to power ahead. DSLRs and Compact cameras are slipping in unit value.
From a global perspective, the inability to supply the market requirements due to production issues masks where we are with this falling market. The longer term effects of the shortages may be that the market shows a upturn once these issues are sorted. On the other hand these losses may simply never be recovered.
The obvious favoring of local markets to the detriment of Europe and America, although understandable, may not be a particularly wise move.
Production for June is set to be down another 27% so don't look for a solution anytime soon.
Mirrorless cameras have obviously suffered more from production issues than DSLRs but still average cost rises whereas DSLRs unit value continue to fall. DSLRs still outsell Mirrorless by 2.8 to 1.