The world’s number two camera maker, Nikon, has slashed the prices of its cameras in response to increasing smartphone sales.
It is thought that market leader Canon will follow suit and also cut prices. This comes as smartphone manufacturers release phones with 41-megapixel cameras, making them as good as, if not better than, the top of the range digital cameras.
Ryosuke Katsura, an analyst from UBS in Tokyo, said: “There are too many players. It’s going to be tough for smaller camera makers even to remain in the business as competition between Canon and Nikon will likely intensify.”
Interestingly, both Canon and Nikon’s stocks have plummeted by more than half since Apple introduced its iPhone to the market in 2007.
Revenue from compact digital cameras has dropped significantly over the last few years as smartphones offer consumers high-end cameras, which means there is no longer any need to carry a phone and camera at the same time.
To give you an idea of how smartphone sales have affected the big camera manufacturers, Nikon introduced its J2 model a year ago. It now sells for just $240, 64 percent lower than its original market price.
As a result, both Nikon and Canon have cut their net income target. Nikon, for example, reduced theirs by a massive 23 percent in August.
Nikon said they did this in order to reduce their inventory as demand for their cameras fell.
What is clear is that the large camera manufacturers need to change their strategy if they want to survive. Hirosuke Takayama, another analyst who works for SMBC Nikko Securities inc., said, “Camera makers need to seek a new growth driver.”
What do you think about the effect that smartphone sales have had on the Canon and Nikon? Do you use your smartphone as your main camera or do you still favor your digital camera when you want to take pictures? Share your comments in the feed below.