Canon CEO: Camera market will contract for another 2 years

Canon's Fujio Mitarai had another prediction about the camera market, this time that the downward slide will continue for another 2 years, and at the end, the camera market will be left with 5 or 6 million units.  An article on newswitch.jp details an interview with Canon's Fujio Mitarai.

The compact market has basically collapsed and with good reason.  When you "need a phone that will always be with you", you probably already have one of those - your smartphone. With multi-camera phones becoming commonplace, while the cost of flagship smartphone will cost you over $1000 which some will object to.  However, you need to consider the cost of a normal phone, plus compact camera and deduct the convenience of just carrying the smartphone against a flagship smartphone. Is the compact camera really offering you that much more for the loss of convenience, unless you get one ILC sized with massive zooms?  Especially considering that compact cameras are edging upwards and becoming more expensive than the flagship smartphones?

Some will claim connectivity is what holds camera companies back - I tend to respectively disagree.  Companies have tried the ILC with a smartphone approach with dismal failure, and the cost of maintaining the ever-changing API's of an instagram, twitter, facebook, pinterest, etc is increasingly difficult.  The approach which is to steadily stream the photos (compressed or full images) to your smartphone as you shoot is an excellent compromise.  The images are on my phone when I want to just just post them to wherever and whenever and let the phone manage the software applications.

The future of Canon will see less importance of cameras, and more importance of their M&A companies that they have added.  Axis and Canon medical are the future of Canon.  Inkjets and Cameras will become less important.

Fujio Mitarai predicts (This quote was edited from machine translation to correct obvious errors);

Compact digital cameras were sold at 114 million units in 2008, the peak year, but it was 10.5 million, or less than a tenth in 2018. Single-lens cameras also peaked at 18 million in 2012 In 8 years, the number of units decreased by almost half to 10.3 million units, and this trend will continue for another two years, both of which are prepared to fall to 5-6 million units.

Surprised? Fujio is predicting that the entire markets for both Compact and ILC's will contract down to 50% of their current levels over the next two years.  We're not that surprised.  Canon has decided to fully blame the smartphone as the reason, probably because "we made products so good no one wants to upgrade them" doesn't sound like something a Japanese CEO would ever say.  However, there's truth in that.  The photographer upgrade cycles are longer and longer.  Peaking in the mid to late 2000's, every photographer was upgrading nearly every upgrade cycle, now, there are fewer photographers that do so, and even more, that will purchase last cycle's camera from the used market.  In essence, the last two generations of cameras are simply good enough for the vast majority of camera users. It's becoming progressively harder to convince users to spend $2000 to $3000 on a new camera. 

The lower end of the market is increasingly difficult to sell cameras into unless you are selling into a niche (small high IQ travel cameras) for instance, as it's faced with competition from again, smartphones, and also for most people, they simply don't need to purchase a new camera - their old one takes plenty good enough pictures.  Since the vast majority of people in this category aren't diehard enthusiasts, the urge to upgrade is even less than the prosumer category that is purchasing higher-end models.

This is a difficult narrative, how do you convince someone that is hanging onto an old Rebel or say a 70D, or a 5D Mark IV that they need to upgrade.

Then there are other factors - the USA and China tradewar is having an unsettling effect across the globe, and as economies in the United States and in Europe start to slow down, consumer spending will follow.  The more consumer spending slows down, the harder it is for camera companies to sell those brand new cameras.  More people will put off upgrading, or purchase used camera gear.

Take all those factors and then toss into it the fact that 75% of the industry changed it's core camera mounts last year and is there little reason Canon is predicting such a slowdown?

Canon sees a continual need for optics and "cameras" simply not cameras that you and I would purchase.  Cameras for your cars, medical devices, etc will continue to be important.

Of course we will continue in the future. There are several good companies that are targeting candidates. We want to further strengthen medical-related software and surveillance software, and the future of the optical industry will expand infinitely. .. one patient's onboard camera if the automatic operation era, lens and the sensor that is "eye" is needed while leveraging such as M&A toward its huge market, improve the business expansion " 

Some will take that as Canon is "giving up", but in reality, it's smart business.  Realizing trends before they happen and starting to plan for the future.  Something Canon started years back with M&A's of Axis and Toshiba Medical.

Canon controls around 50% of the entire industry, they have a good sense of the pulse of the camera market and it's not too healthy right now.   There's a good chance that this continued, heavy contraction will force companies out of the camera market, which is never a good thing.  All we can do is sit and watch and see what happens.