Nikon Sales trending negative - Cutting back on staff

[GrahamL]

There was a report today with a headline 'Nikon Re-assigns 1500 workers'. I looked up the 8th November press release by Nikon; the detailed story is that of Nikon's 6 separate businesses 'Imaging', the division that covers consumer photography, is actually re-assigning only 350 workers. There will be redundancies, but given these are all staff based in Japan I suspect actual redundancies will be quite a bit smaller. What was more interesting perhaps is their new strategy for their retail photographic market business.

They see the market contracting and currency movements going the wrong way Japan business-wise. Therefore they have just re-assessed their product strategy to focus on high-value added products, doing the standard profitability improvement in the process by optimising sales and reducing costs. through better scalability and R&D structure.

What does this mean to Nikon-users? Prices are unlikely to come down anytime soon. The cheaper products that are competing head-to-head with the likes of Samsung and other foreign producers will almost certainly be the product lines to be targeted for removal. This may give increased focus on keeping up the R&D innovation on the system-lens side, which I see as no bad thing, apart from the likely price of course! May be some good deals on the non-system consumer side before that line is discontinued too.

Not sure if the global market for photographic goods is actually contracting, but might well be I guess given the increasing power of mobile phone cameras and the recent focus on improving the camera side of the phone by some makers. And of course their are now Chinese based businesses getting in on the act, moving from manufacture to development. No idea what Canon, Olympus, Fuji and others are up to, but I guess must be facing similar pressure.

Cheers,

Graham

[Mike Farley]

Graham

If you are interested in reading about Nikon as a company, Thom Hogan's website is a good place to start. He has a business background and has been tracking Nikon's financials for years. He has already written about Nikon's restructuring plans, although according to him it is as yet unclear what Nikon intends. They appear to want to cut back numbers without reducing staff, which is not straightforward in Japan's culture.

http://www.dslrbodies.com/newsviews/nik ... ncial.html

As I see it, the manufacturers had a few good years at the start of the digital era in the early part of this century. There were rapid technological improvements and people were prepared to pay high prices to get the new cameras. Canon's sales really took off in 2003 when it introduced the "affordable" EOS 10D, a 6MP DSLR priced at £1,500. Compare that in real terms to the prices from Olympus et al we are being asked to pay now and it will still be higher. Inevitably, the pace of development slowed and there is less need to upgrade than a few years ago. Coupled with the rise of cameras in smartphones, which has decimated the compact market, fewer people want or need to buy cameras. The market is saturated. From what I hear, it is returning to the levels seen at the end of the last century during the last days of film's domination.

A number of things have happened recently:

• Sterling has fallen in value following the Brexit vote. I expect further volatility during the process of leaving the EU and quite likely for some time beyond.
• At the same time, the value of the Yen has increased against other currencies.
• In recent months, manufacturers appear to have decided that the way to increase profitability is higher revenue per unit, even if it means lower sales volumes.
• On top of that, Donald Trump's election is likely to spook global markets in the short term at least. What happens in the longer term will depend on what type of president he turns out to be.

None of the above is good news for prices, cameras or otherwise. There is some stability at present as large companies hedge their exchange rates, but existing arrangements will becoming to an end. At least cameras are not an essential purchase.

[Mike Farley]

Graham

If you are interested in reading about Nikon as a company, Thom Hogan's website is a good place to start. He has a business background and has been tracking Nikon's financials for years. He has already written about Nikon's restructuring plans, although according to him it is as yet unclear what Nikon intends. They appear to want to cut back numbers without reducing staff, a difficult trick which is not made any more straightforward by Japan's protective employment culture.

http://www.dslrbodies.com/newsviews/nik ... ncial.html

As I see it, the manufacturers had a few good years at the start of the digital era in the early part of this century, which peaked around 2011. There were rapid technological improvements and people were prepared to pay high prices to get the new cameras. Canon's sales really took off in 2003 when it introduced the "affordable" EOS 10D, a 6MP DSLR priced at £1,500. Compare that in real terms to the prices from Olympus et al we are being asked to pay now and it will still be higher. Inevitably, the pace of development slowed and there is less need to upgrade than a few years ago. That 2011 peak is probably no coincidence, as cameras dating from around that time are still capable of producing good results. Coupled with the rise of cameras in smartphones, which has decimated the compact market, fewer people want or need to buy cameras. The market is saturated. From what I hear, it is returning to the levels seen at the end of the last century during the last days of film's domination.

A number of things have happened recently:

• Sterling has fallen in value following the Brexit vote. I expect further volatility during the process of leaving the EU and quite likely for some time beyond.
• At the same time, the value of the Yen has increased against other currencies.
• In recent months, manufacturers appear to have decided that the way to increase profitability is higher revenue per unit, even if it means lower sales volumes.
• On top of that, Donald Trump's election is likely to spook global markets in the short term at least. What happens in the longer term will depend on what type of president he turns out to be.

None of the above is good news for prices, cameras or otherwise. There is some stability at present as large companies hedge their exchange rates, but existing arrangements will becoming to an end. At least cameras are not an essential purchase and manufacturers will still want to supply models against a range of price points.