In a Japanese interview with Yomiuri, Nikon’s president, Muneaki Tokunari, acknowledged that while smartphones harmed overall sales of digital interchangeable lens cameras, they may contribute to the demand for high-end cameras. Not many years removed from dire straits, Tokunari also outlined Nikon’s ambitious expansion plans, including its recent acquisition of RED Digital Cinema.
Tokunari says that many camera businesses were recently operating at a loss and that some competitors excited the photo business altogether. This was, unsurprisingly, driven in large part by the massive growth of the smartphone market and the improving quality of smartphone cameras, which reached the “good enough” stage the late Steve Jobs predicted years before the camera industry felt the sting of smartphones.
However, “We are now in an age where smartphones and digital cameras can coexist,” Tokunari explains in the machine-translated Yomiuri interview, initially spotted by Digicame-Info. “Global sales of digital cameras have fallen to one-twentieth of their peak. However, domestic companies are doing well. The top five companies hold most of the world’s market share. This is a rare example in Japanese industry.”
Nikon President Says Smartphones Are Now Driving Camera Demand
Tokunari goes a step farther. He argues that while smartphones initially led to the contraction of the camera industry, they are now a significant driver for the current and future success of camera companies.
“I think smartphones have broadened the base of photography. As a result, our high-end models, which are at the top of the camera pyramid, are selling well,” Nikon’s president says.
While there’s little doubt that smartphones have decimated entry-level camera sales, a situation unlikely to change anytime soon as smartphones get better at taking high-quality photos and videos and camera makers dedicate resources elsewhere, it’s fascinating that Tokunari believes smartphones may prove to be a sort of gateway camera for burgeoning photographers.
There is still a significant rift between a smartphone and a high-end dedicated camera in terms of performance, versatility, and user experience — a gap unlikely ever to shrink entirely. While smartphones may have led to people not buying entry-level cameras, it remains possible that they instill a love for photography that inspires customers to buy a dedicated camera to improve the quality of their images and the overall shooting experience.
‘I think smartphones have broadened the base of photography.’
“Smartphones have taught people the joy of sharing their photography with the public, and the target audience has expanded,” Tokunari explains. “As a result, interchangeable lens cameras, including from other companies, are doing well compared to compact digital cameras and cameras with non-interchangeable lenses.”
It is worth noting here that while Nikon doesn’t have a camera with a fixed lens, some of them made by others are selling exceptionally well, including the Fujifilm X100VI and the Ricoh GR III series.
Tokunari points to the Chinese market as a strong example of this. “The Chinese market is a typical example. The wealthy are looking for cameras, not smartphones, and they are selling well. The United States is the best-selling country for cameras. Next is Europe, followed by China and Asia, but recently China has overtaken Europe.”
Tokunari also says India has a large population with a growing demand for cameras, especially in the professional wedding industry.
A Wise Focus on High-End Cameras and Nikon’s Investment Plans
Overall, Nikon’s decision to focus on mid- to high-end camera models, like the Z8, Z9, and recent Z6 III has “worked better than expected,” per Masaaki.
In response to Nikon’s recent success, the company is reviewing its production capabilities and plans to invest 100 billion yen ($712 million) to renovate and improve its factories, including its Tochigi production facility in Japan, where Nikon makes many of its high-performance lenses for photographic, industrial, and healthcare applications.
‘Smartphones have taught people the joy of sharing their photography with the public, and the target audience has expanded.’
“Both cameras and semiconductors are becoming more and more precise, and their level of precision is increasing,” Tokunari explains, suggesting that Nikon’s investment efforts will be focused on keeping its production facilities up to date and prepared for highly demanding operations.
RED Acquisition Signals Nikon’s Serious Interest in Video
Another way the market is changing is an emphasis on professional video. While Nikon has made some very good video cameras, including the Z9 and Z6 III in particular, the company’s acquisition of RED Digital Cinema earlier this year is arguably the company’s most significant video-related move ever.
The interview notes that the acquisition is not a simple asset grab, but Nikon is very serious about video. Nikon engineers and executives became quickly involved with RED, and the companies are hard at work on developing new products and technologies, while also bringing RED’s technical expertise to existing Nikon products. This work has already paid dividends, and is slated to provide many more in the next few years.
While smartphones nearly killed the camera industry, Nikon made it through. Thanks to shrewd investments in high-end camera technology, the company is poised to reap the potential rewards of a huge new generation of photographers who started using smartphones. At least, that’s the plan.
Image credits: Header photo created using an image licensed via Depositphotos and an official Nikon marketing image.