*NEW* Nikon 1 Cameras

[Browncoat]

...Nikon's marketing dept - has determined that the PNS segment is were the money is. Nikon sells way more Coolpixs than DSLRs...

This is incorrect.

The money is, and always has been, in the SLR market. Point and shoot cameras are a one and done deal. Consumers buy the $100 camera, and they're gone. There's no aftermarket, no extended product line. With SLRs, the cameras cost 10x as much. Then there's always additional lenses, batteries, grips, and other accessories. For the most obvious example, just take a look at this forum. The PnS section hardly gets used. People buy PnS cameras because they're cheap and simple. You won't find many PnS consumers who are dedicated to the Nikon brand like the SLR users are. SLRs are an investment, not an impulse purchase.

In addition, the Nikon 1 series is aimed at the high end PnS/low end SLR user. Snappers aren't going to buy this camera, not when the average snapper mindset is trending towards cell phone cameras. It's way out of their price range.

According to market research, the D3000 and D5000 were largely failures for Nikon. The D3100 helped pep things up a bit, but overall, Nikon's targeting of the low end of the spectrum did not fare well with consumers. Enter the Nikon 1 series. This camera is their attempt to regain this market share. Nikon typically holds 30-35% of the overall camera market (either 2nd place or flip-flops with Canon), but they are particularly weak on the low end SLR market.

 

[Sambr]

This is incorrect.

The money is, and always has been, in the SLR market. Point and shoot cameras are a one and done deal. Consumers buy the $100 camera, and they're gone. There's no aftermarket, no extended product line. With SLRs, the cameras cost 10x as much. Then there's always additional lenses, batteries, grips, and other accessories. For the most obvious example, just take a look at this forum. The PnS section hardly gets used. People buy PnS cameras because they're cheap and simple. You won't find many PnS consumers who are dedicated to the Nikon brand like the SLR users are. SLRs are an investment, not an impulse purchase.

In addition, the Nikon 1 series is aimed at the high end PnS/low end SLR user. Snappers aren't going to buy this camera, not when the average snapper mindset is trending towards cell phone cameras. It's way out of their price range.

According to market research, the D3000 and D5000 were largely failures for Nikon. The D3100 helped pep things up a bit, but overall, Nikon's targeting of the low end of the spectrum did not fare well with consumers. Enter the Nikon 1 series. This camera is their attempt to regain this market share. Nikon typically holds 30-35% of the overall camera market (either 2nd place or flip-flops with Canon), but they are particularly weak on the low end SLR market.

Where did you get your information Anthony? - Take a look at the CoolPix sales(renenue) compared to the DSLR's as you indicated the D3000 & D5000 were failures. There are more people buying $250.00 - $300.00 cameras then there are buying $1500.00+ cameras just ask Thom Hogan.

 

[Johnathan Aulabaugh]

You're looking at this as a photographer, Anthony, not as the average person looking for better pictures.
Found this on About.com but it was part if the PMA release:

As part of the recently completed PMA 2010 trade show, the Worldwide Community of Imaging Associations has released its U.S. Photo Industry 2010 forecast report, and it contains some interesting information regarding the American photography market for the upcoming year. The forecast says:

• 22.7 million point and shoot cameras and 2.1 million DSLR cameras are expected to be sold in the United States in 2010.
• About 80% of U.S. households own digital cameras.
• The average digital camera replacement period in the United States is 3-4 years.
• U.S. digital camera sales in 2010 should be slightly less than in 2009, but a percentage increase in sales is expected in 2011, thanks in part to more replacement cameras being sold.
• Americans will make 13.9 billion photo prints in 2010, about one-third of which will be made at home.
• The number of photos taken with an average camera phone in 2009 was 12 times less than the number of photos taken with an average digital camera.
• The overall market value of cameras, printing, and photo publishing in the U.S. will be more than $10 billion.

​

 

[Sambr]

Thank you Jonathan

 

[Browncoat]

You're talking sales volume, not revenue. There's a difference.

Unfortunately, I can't link to the market research data I'm using, because it's a paid service that I'm a member of. However, you can see some numbers on the CIPA website (of which Nikon is a participating member).

Jan-Dec 2010
Interchangeable lens shipments: 12.9 million units
Built-in lens shipments: 108.5 million units

This is worldwide, across all participating manufacturers, not just Nikon. These numbers are in line with typical trends that show an average of 100 million PnS unit sales and 10 million SLR unit sales. Also consider the average of 16 million lenses sold each year on top of that. I could not find credible figures on other accessories associated with SLRs.

The way this works is simple: PnS cameras are volume sales. They're low cost, low margin products that don't generate a lot of profit for the company, but keep component and operating costs down. This in turn allows investments in R&D for the high dollar, high margin products...the SLR lineup. Many businesses operate in this manner, including most consumer electronics companies and automobile makers. This is Economics 101 stuff, gang.

In other words...

How many of those $200-$300 cameras does Nikon have to sell in order to equal just one DSLR? Now also consider that $200 camera probably costs $180 to manufacture, which leaves a profit margin of 10%...and that's guessing on the high side. I guarantee that the margin on SLRs is 20% or higher.

 

[fotojack]

Jonathan.......some interesting words in that report you mentioned: forecast....expected...should be... these are expectations, not facts. I tend to side with Anthony on this issue. There's a big difference on what a company WANTS to make and what it actually makes on any given product. PnS is PnS, no matter how you dress them up.

 

[Johnathan Aulabaugh]

Jonathan.......some interesting words in that report you mentioned: forecast....expected...should be... these are expectations, not facts. I tend to side with Anthony on this issue. There's a big difference on what a company WANTS to make and what it actually makes on any given product. PnS is PnS, no matter how you dress them up.

the problem is that was not a company estimate report but the PMA itself.
What this does not take into account that most DSLR cameras are 2-3 times more expensive so they would have to sell 2-3 times the units to make up for it. Which is really hard to figure. for instance going back, for every D300 sold there was 10-D80's, 20-D60's and 40-D40's and that does not even include the big dogs. This is a for instance hypothetical comparison here as I have no clue what the true numbers would be but I know a ton of people who bought D40's and less and less as the step jump to the next best.

Nikon Global
http://www.nikon.com/about/ir/ir_library/fb/pdf/fb2011/11fb_e04.pdf

Nikon USA
MELVILLE, N.Y. (April 5, 2011) – Nikon Corporation is pleased to announce that total production of NIKKOR interchangeable lenses for Nikon SLR cameras has reached 60 million in March 2011

 

[Browncoat]

...does not take into account that most DSLR cameras are 2-3 times more expensive so they would have to sell 2-3 times the units to make up for it...

That defies pricing models that have stood for many decades. We can speculate the future success or failure of the Nikon 1 system ad nauseum. It's healthy discussion and friendly debate, because no one can say with any degree of certainty how a new product will fare in the marketplace.

But what you're saying about pricing defies logic and historical trends. Companies make cheap products to be just that: cheap. There's no profit in them. Yes, they sell a ton of them and for that very reason. Because they have to sell a ton of those low markup items. The high end of any product line is where the profit is. That's where most of the R&D goes, and where brand loyalty is built.

There is little fundamental difference between the high and low end of Nikon's DSLR lineup. Yet there are products to hit every price point from $500 to $8000, which is a 1600% price spread. The D3x probably has triple the profit margin of the D3000. Sure, they sell far fewer D3x models. They also sell far fewer DSLR models than PnS models, but they are making more money on them. Guaranteed. That's just how the system works.

 

[Johnathan Aulabaugh]

You must mean defines, because if what you're saying was true, Walmart would not be the biggest retailer in the world for selling Chinese crap and Ferrari would be bigger than Ford... the only part of what you said that makes sense is that most R&D goes into the bad boy toys. That R&D cost tons of money and trickles down to the less expensive models over time.

 

[Browncoat]

Mr. Aulabaugh, you're all over the map in this thread in an attempt to be right about something. Again you're comparing apples to oranges. Wal Mart is the world's largest retailer because they embrace the same model that is used for PnS cameras: volume low margin pricing. Comparing Ferrari to Ford is like comparing Nikon to Hasselblad...who makes a $45,000 camera.

What you're not recognizing here is that Ford makes several models, from the bare bones Fiesta all the way up to the high end cars. Ferarri also makes several models with varying features and price ranges.

These companies are all making more money at the top end of their product line than they are the low end. Products at the low end are designed to be inexpensive, so there's not a lot of profit there. That's just the way it is. I don't know how to better explain it to you.

 

[Johnathan Aulabaugh]

Anthony I am telling u right now that your wrong many times the R&D that goes into the newest models does not begin to pay off untill that technology trickles down to the lesser models period. I know this for a fact. I was in the electronics industry for 11 years. I know how this works. These companies do not make their money off new tech when it comes out. It usually takes 2-3 years to reach the black with any new technology. I brought up cars because the same principle applys and always has. Yeah they may introduce a new model every 4 years but the tech from the higher model will go to the next down. That's just the way it works. Idk how else to describe it to you.

 

[Browncoat]

From 4/3 to mirror-less, profit margins to business models, and now on to R&D? How did you get here and what does it have anything to do with any of the other points you've brought up? Now you're talking about profits on new technology?

Yes, R&D generally trickles down. I never said it didn't. Today's doodad will eventually be yesterday's news and end up at the low end of the product line. Just because a model is at the high end of the product line doesn't mean that's where all the new tech goes. Nikon's revamp and new offerings is proof of that, as their pro models haven't changed for years.

At any rate, this thread has gotten way off topic. Back to the matter at hand...

 

[Johnathan Aulabaugh]

hahahaa dude...
We got here by following the money.
Ok all I said about the m43 and NEX is that the Nikon 1 system is in direct competition with them regardless of how you spin it. I also followed that up with I thought Nikon had made a mistake with the smaller sensor but as none of us had actually tried this new piece of technology, I did not know for sure how it would go.
Salvatore brought up the money issue with the following the money comment to which you wrongly replied that the SLR market was were the money is, which it is not and never has been. The DSLR market has always been a niche market that is now being broadened by the use of older technology in new models. I brought up companies such as walmart to show that selling a ton of less expensive crap is how most companies make there money and ford to try to help you understand that R&D usually goes into the newer vehicles but it takes a few years to even break even on that piece of tech. which trickles down to lesser models as time goes by. Most camera models, like vehicles, last for around 3-4 years before the new top dog comes out. If the company is lucky they can squeeze another year out of the older model while continuing to sell the new one. Most new tech is realized while building (not in the actual design) the latest greatest so the tech you find in even the newest camera might be and probably is years old. This is true in almost all electronics today. Another automotive example - every circuit in a brand new car was designed at least 3 and up to 10 years prior.
All this just to try to explain to you that the DSLR market is not where the money is and that the P&S crowd is how these companies are making their money, which puts us back at the reason that Nikon came out with the Nikon One system.

 

[Browncoat]

Pretty much everything you posted is ass-backwards and defies real world applications, but that's irrelevant at this point. I'll explain in more detail how all of this works, and then this thread will be locked...because even after everything I'm about to post, something new will arise...like how the price of hog futures affects camera sales or some other nonsense.

Most products are purchased at wholesale prices. This is especially true for big box stores, who have increased purchasing power. They might pay $400 for Nikon DSLRs, which includes all lines from the D5000 to the D3, and is referred to as wholesale unit price. I'm not going to explain BEP (Break Even Point), average variable cost, average fixed cost, or how wholesale prices are calculated.

There is more money in DSLRs than PnS cameras. That's it. It doesn't matter what you think you know about how all of this works, because it simply doesn't work that way. And since a picture is worth a thousand words, here is a handy little chart from Nikon Fact Book 2010, and another from NikonRumors.com: