Nikon is in the most serious downturn in history, when the camera market is slumping because of the COVID-19.
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According to Japanese magazines Toyo Keizai, Nikon is at an unprecedented heavy loss, and video unit leader Hirotaka Ikegami said it would be betting everything on mirrorless cameras to save the situation. With the slow change and the unfavorable business environment, Nikon is paying the price for relying too heavily on the prestigious DSLR line.
According to Toyo Keizai magazine, the first six months of this year loss was 449 million USD, in stark contrast to the surplus of 168 million USD in the same period last year. Forecasts for fiscal year 2020 will end in March 2021, the company set a record loss of about $ 720 million. Not only a negative result, but this is 11 times more than the 65 million dollar profit last year.
Contrary to Nikon, which is facing its worst fiscal year ever, compatriot Canon has a profit outlook of $ 616 million. As for the video business alone, Nikon also offers a gloomy outlook with a loss of $ 433 million this year, exacerbating a $ 164 million loss from last year.
Nikon suffered its worst performance in history (photo: Toyo Keizai)
In an interview with Toyo Keizai magazine, Mr. Hirotaka admitted that this tragic result was related to their slow transition to mirrorless systems. He stated: “I am not afraid to step on the SLR camera line, but I should have looked at the market more thoroughly and objectively.”
The director admitted he underestimated the mirroless camera, not believing it could compete fairly with DSLRs in terms of battery life. He thought that a mirrorless that took 500 shots would not be as attractive as a DSLR, taking up to 1,000 shots to run out of battery. “I doubted it could convince professionals and senior amateurs“- he said.
Bet on mirrorless
With the restructuring going on, including moving camera production to Thailand and cutting hundreds of jobs, Nikon expects a 59% cut in the next 2021 fiscal year. However, the Japanese magazine said that efforts to cut costs are not enough, they need to reverse their sales increase if they want to stay in the camera market.
The company must focus on mirrorless and video recording capabilities to revive the camera business (photo: PetaPixel)
According to Mr. Ikegami, the market for full-frame mirrorless cameras is increasing, thanks to the central target group of professional photographers and senior amateurs. This may be the float that Nikon needs right now, as the entire camera market is in decline. Besides, he committed that the company would still invest in technology development despite losses.
“It’s expensive, but we’re still going to put money into the development of image processors, which sets Nikon apart from the rest besides the body and lens” – he said. Thus, although Nikon has a heavy loss, it is still not enough to re-invest in new technology. This is essential if the company wants to return to the track with Sony and Canon in the coming months.
Facing the tough fiscal year 2021, Nikon announced it would put all its efforts into mirrorless cameras and expand its product range. Even this will continue for the whole of next year. Their new strategy focuses not only on stills but also movies. This is also the direction of camera companies such as Sony, Canon, and Panasonic recently.