Where is the Camera Industry Heading?

This morning Steve Huff posted an article titled Where I think the Camera industry is Headed. This got me thinking on this subject as the industry is going through another phase of turmoil. When the industry moved from film to digital many photography giants disappeared either through outright closures or by being absorbed by other companies. Kodak is probably the most well known example. And now the new disruptive force is the rapidly improving and ubiquitous camera-equipped smartphones.

I’ve long been an adherent to the mantra that says: “the best camera is the one you have with you” and that is why I moved from Nikon full-frame to M4/3. I had an enormous Nikon D700 with pro zooms and a tiny Lumix LX5 and guess what the Lumix was my best camera because it was the one I had with me 99% of the time. So this is probably the main reason why smartphones have basically killed the Point & Shoot camera market. They provide very similar performance and you have them with you at all times plus you don’t need to actually buy a separate camera. Smartphones are also eating into the advanced P&S and the action camera market. Remember that all things digital so far in modern technology have been about improving functionality, convenience and quality while shrinking the size. Digital photography will be no different.

On the high end of the spectrum you have the DSLRs, huge machines with equally large lenses but if you’re a pro who needs the best in image quality and focussing speed they are currently the way to go. However, smaller mirrorless formats like M4/3 and Fuji X are closing the gap in image quality and focussing speed, making the DSLR advantage smaller and smaller. DSLRs will increasingly get squeezed from above as well. If you really need the best image quality and shallow depth-of-field, you will soon have some pretty compelling medium-format cameras to choose from and they are not a whole lot larger than the DSLRs (although the lenses are). Still, if you are a pro needing the optimum in quality, M-F makes sense.

So here’s what I see happening in the next 5 years:

  • Continued improvements in smartphone cameras as they are now one of the main features users look for so this will be the big differentiator between smartphone brands. Just today Huawei signed a deal with Leica for a joint venture and I do not think it is about putting cell phones in Leica cameras.
  • A healthy market for hybrid and compact cameras built around the 1″ sensors and with powerful long zooms in a small format.
  • I see M4/3 and the Fuji X system continue to close the quality and capability gap with DSLRs and eating away at that market and also dominating the street photography market. The M4/3 format remains the most attractive option to me for its combination of quality, capability and portability.
  • DSLRS becoming more of a niche market for pro sports & action photographers and maybe some photojournalists (if that job description still exists!)
  • Mirrorless Medium-Format cameras will also eat away at the DSLR market especially for pro portrait, fashion, product and landscape photographers and anyone who needs the absolute best in image quality.

If I’m right about the above than things are not looking good for Canon and Nikon.

Nikon has lost its P&S market, failed in the 1″ hybrid and mirrorless markets and has no presence in the medium-format market. Nikon is trying to enter the action-cam market but that is probably too little too late as that market appears to be saturated and declining. On top of it all their bread-and-butter DSLR market will shrink. Increasingly long release cycles as mentioned by Steve Huff will make matters worst.

Canon also lost their P&S market, sees it’s 1″ hybrid and advanced P&S markets shrinking, is failing in the mirrorless market and has no medium-format strategy. They will also see their bread-and-butter DSLR markets shrink.

Sony on the other hand is strong in the 1″ hybrid and advanced P&S market, strong in video, eating away at Nikon & Canon’s DSLR sales with their full-frame mirrorless cameras and since they make the medium-format sensors for Fuji and Hasselblad, they could easily come out with a killer mirrorless medium-format camera and a good line-up of Zeiss lenses, challenging for the image quality crown. Speaking of sensors, Sony dominates the market and makes sensors for everyone and everything from smartphones to medium format so no matter where the market goes, they will profit from it.

Fujifilm is positioning itself nicely with the superb and fairly portable Fuji X system and now the newly announced GFX medium-format system. They are a photographer’s company, make superb optics and I think they will continue to do well and give Hasselblad a run for its money in the M-F market.

M4/3 will continue to grow and do well as both Panasonic and Olympus are innovating rapidly and other companies are joining the market as well. APSC is closing the quality gap with FF while M4/3 is closing the gap with APSC, so the functionality and portability of M4/3 will increasingly become the main differentiator, not the quality.  M4/3 has an extensive, growing and compelling line of lenses available and the system provides the best quality possible in a very compact system.

Here we go, those are my predictions. Let’s check back in after the next Photokina in 2018.