Thursday, March 5, 2015

Where Are Nikon and Canon Headed

On another forum, a poster wrote of Canon and Nikon's apparent reluctance to allow third party lens makers access to their auto-focus technology.  

"Why would", the poster asked (I paraphrase), "Canon and Nikon NOT want third party lens makers to make fully functional third party lenses?"  

This poster was confused by the mirrorless manufacturers apparent willingness to allow THEIR auto focus technology in third party products when Canon and Nikon, do not.  I think the difference lies in the strategy behind a niche product and that of a mass market consumer product.

My personal opinion is that Canon and Nikon see the handwriting on the wall.  The not too distant future of the DSLR will be that of a niche product. (no, they are not going away!)  While Olympus, Panasonic and Sony seem to share the idea that they are in a consumers market and their marketing strategies are based on that assumption.

When you market a niche product, you can't really afford to share any sales with a third party. ALL the revenue from the after sale hardware purchases simply MUST go to fill your coffers, not that of someone else. There just aren't enough people willing to buy your product for you to allow someone else to profit from your system. 

That seems to be the strategy that both Nikon and Canon are starting to follow.  Of course we see some inconsistency in this strategy, Canon and Nikon are in transition.  There will be such inconsistencies but I think that transition is not only going to continue, but that it is inevitable given the sales trends we see.

On the other hand, if your product is a mass market consumer product, you not only can afford to share revenue in that way, but one could make the argument that the diverse sales actually contribute to the illusion (and eventually, the fact) that your product is the driving engine of that consumer market. And that illusion actually adds to your bottom line.  That is where the mirrorless market is headed.

I think it is ironic, that Olympus couldn't make a go of it as a niche DSLR vendor and transitioned to a more mass market strategy, While Canon and Nikon, who were making a go of it as the center of a mass market strategy are now transitioning to what appears to be a niche strategy. 

This conundrum isn't explained by the idea that one or both of the two groups is crazy, but that both were starting from different positions when they made their decisions, and in how much the market has changed in the last five years.  I wonder if there is room in that market for both Nikon and Canon?

I think DSLR users need to get comfortable with the idea that the cost of hardware and gear purchases are going to go up a bit faster for the DSLR than that of other systems.  Niche products are by nature more expensive.

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