At one point, Nikon was at the top of the point-and-shoot camera market. But like many of its competitors, Nikon has taken a hit in the wallet thanks to the rise in smartphone use. Customers no longer need to carry a bulky camera around their neck, but instead can whip out a smartphone packing high-resolution camera sensors. And it's only going to get worse for the traditional camera maker.
In a July 4 interview at Nikon’s Tokyo headquarters, President Makoto Kimura told Bloomberg that point-and-shoot camera sales across the industry have dropped about a quarter in April and May from a year earlier. Meanwhile, smartphone shipments jumped up 46 percent last year to 722 million units. Obviously Nikon needs to change its direction in the general consumer market at the very least.
"The number of people taking snapshots is exploding by use of smartphones that sold 750 million or so last year and are still growing," Kimura said. "We’ve centralized our ideas around cameras but can change our approach to offer products to that bigger market."
The company's high-end camera portfolio with exchangeable lenses, like the D4-SLR costing $6,000, is expected to gain 9 percent in the current financial year. However it's the company's consumer-focused compact point-and-shoot business that's taking a hit, and this portion of the market is expected to shrink 12 percent in the same financial year. Kimura said sales of the higher end models will help compensate for the lack of sales in the point-and-shoot division for a few more years.
Meanwhile, Nikon's imaging division and a new business team are developing new products that should become available in less than five years. Kimura said Nikon is looking to create a product line that will change the concept of cameras, and could even be a non-camera consumer product. Naturally he wouldn't elaborate any further.
Does that mean Nikon may be developing a smartphone? The president declined to say, only stating that a rapid expansion of mobile devices is a change in business environment given to Nikon. "Our task going forward is to find an answer to that change," he said.
The company may also expand into production of medical devices, following Canon Inc. and Sony Corp. Rival camera maker Olympus Corp. is already the world's largest maker of endoscopes, a device with a light attached that's used to look inside a body cavity or organ. Ouch.