Camera manufacturers have long told us that the future was mirrorless and – as if there was any doubt – Canon and Nikon even joined the party as far back as 2018, yet compact cameras and DSLRs have stubbornly refused to die. With 2022 well and truly over, we can now safely say that it was the year of the mirrorless camera and this marks some profound changes across the board for the industry as a whole.
Firstly, the total value of those shipments increased by 40%. Yup, you read that right: shipment values went up from ¥489 billion to ¥681 billion, getting close to values last seen in 2018 when they were ¥729 billion.
Likewise, lens shipments saw a small 2% increase in units, but a far more impressive 29% increase in value. Lens data is less clear-cut than camera data; with the advent of low-cost Chinese manufacturers entering the market (who are not CIPA members), it is likely that this data is under-represented by at least 20% with the sector far more competitive and buoyant. This also means that the “lens attach rate” (number of lenses per camera) is higher than the reported 1.64 and possibly a reason why this has dropped from 1.79 last year.
Of course, if the number of cameras shipped has decreased (slightly) but their value increased, then the only conclusion is that the value of each camera (unit cost) has gone up: they’re getting more expensive and by about 45% last year!
While we might be feeling that in our pocket through a combination of rampant inflation, weak economies, and wages that are rising slowly, that is only a small part of the story. More pertinently, the number of compact (integrated) camera shipments continues to drop through the floor, down from 3 million last year to 2 million this year. With Canon and Nikon all but pulling out of this market, we are left with whatever remains and this tends to be premium models.
DSLR shipments also continued to drop from 2.25 million to 1.85 million, again a result of production being shuttered (and particularly by Nikon). That not only means that DSLRs are broadly shipping the same volume as compact cameras, but that the parity in total shipments last year means that mirrorless (MILC) cameras made up the slack, increasing from 3.1 million to 4.1 million.
MILCs are responsible for 51% of shipments, however more critically they hold 77% of the value (with DSLRs at 14% and compacts at 10%) and is the reason that Nikon has focused all its energy on building out the Z-system.
The Year In Review
On the back of 2021, I suspect camera manufacturers were a little nervous as to what the year held for them. Recurring lockdowns in China, supply chain problems, and stagflation gripping the world economy combined to produce a relatively bleak outlook for manufacturing. For Canon and Nikon, that was on the back of being late to the switch to mirrorless and a need to close old production lines for DSLR and compact models, shifting production away from China while at the same time continuing an aggressive design, development, and release cycle for their expanding ranges of mirrorless cameras and lenses.
From the beginning of the year, Canon held a bullish outlook at 5.6 million units (for global combined DLSR and mirrorless shipments) – perhaps a result of significant market penetration (gaining the BCN Awards mirrorless accolade with a 32% share in Japan) – that uprated as the year progressed, while CIPA was more pessimistic at 5.3 million.
The year ended with 5.92 million, which was better than anyone expected. It shows the underlying strength in mirrorless, which means that not only are customers demanding more volume but also that manufacturers are able to meet this demand. We also know from the BCN Awards that Canon holds 76% of the (Japanese) DSLR market, with Nikon at 17% and Ricoh steady at 6%. This confirms Nikon’s decision to largely vacate the market and it looks like its survival as a segment is solely reliant on Canon continuing production – will 2023 mark its final demise?
What Does 2023 Hold?
Last year, 2022, was all about post-COVID recovery, moving back to levels last seen in 2018. Expect this trend to continue with 2023 being a marker in the sand indicating the likely size of the market as a whole. Pre-COVID, the news story was all about the implosion of the camera market and the intervening years have obscured the complexities of switching over to a post-DSLR world – the mirrorless future.
The real question is this: what is the likely size of this market? This is important because all manufacturers have been rationalizing their production and this is no better exemplified than by Nikon as it has – largely successfully – transitioned from a mono-business focused on consumer cameras to a wider portfolio with a much smaller, self-sustaining, camera division.
What this means for the market is that it could still decrease from 8 million units, but that will result from the continued contraction of DSLR and compact segments. The real news will be the continued increase, above 4 million units, for mirrorless models. And given what we have seen from market value, don’t expect cameras to get any cheaper; that “creep” in prices may well continue more obviously!
Finally, with the all-but-demise of DSLRs and compacts as market segments, I would expect CIPA to look at reclassifying its shipment data, perhaps along the same lines as its lens data which uses sub-full-frame as a dividing line between two segments. This would align the data and provide a little more insight into how the market is changing.