Sunday, March 8, 2015

DSLR VS Mirrorless: The Camera Market in 2015

Left to Right: Olympus E-M5II, Sony A6000, Fujifilm XE-2, Nikon D5500, Canon SL1

What you see above is an assortment of mid-tier DSLR and mirrorless cameras. They occupy different price points and serve different target markets, but all can be said to be "smaller large-sensor interchangeable lens cameras" which also have good image quality and/or handling in a portable package. Crudely speaking, these are cameras for people who love the act of picture-taking but who don't like carrying stuff around. This is a tricky market segment for the camera companies. People who love cameras tend to also like stuff... as in buying it and carting it around to places. Your typical Nikon D7100/7200 or Canon 7DmII user is unlike the typical buyers of the above 5 cameras. If anything, advanced enthusiasts are atypical of the market in that they tend to buy multiple lenses, whereas the mid-tier group may buy one or two extra lenses... over the entire lifetime of their camera ownership.

For this reason, the mid-tier is a tricky market to serve because the customers know enough to go for the better quality of a large sensor camera but aren't so fully committed to photography that they want to accumulate extra gear. This is a sticking point for many entering the camera market; for a generation that came of age during the smartphone revolution, anything bigger than an iPhone is "big." This is a demographic that is simply not used to carrying stuff around. Look at all of the things that a smartphone replaces: it's not just cameras, a smart phone also takes the place of a watch, a calculator, a music player,a day planner....

So ostensibly, the message to the camera manufacturer's is that people want smaller cameras. To that end, the conventional wisdom is that mirrorless cameras are the future. That';s been the sentiment for a number of years now. It's more true than ever before, and in two ways its still off in the future. The first reason is practical: mirrorless cameras have obvious size benefits over traditional DSLR's, but the second reason is more problematic. The issue with forecasting the future is not so much a matter of "what will happen", but "who will make it happen"... and "who" is a matter of who is willing and who is capable. Therein lies the problem, as Canon and Nikon, being heavily invested in the DSLR route and are not willing, whereas the mirrorless camera makers, with the possible exception of Sony, are not able. Not at the rate things are going.

That last point isn't a slight on the likes of the mirrorless makers, but it is a reflection of reality. Youy only have to glance at CIPA's industry statistics and to dive into the various quarterly financial reports to see why. In a contracting camera market, Canon and Nikon are fighting to hold on to profitability, whereas Olympus and Panasonic haven't been profitable camera-wise in the recent era. Fujifilm has made strides, but like the first two, cameras comprise a small portion of their total business. Also like the first two, Fujifilm is increasingly being pegged as a high(er) end camera maker that caters to enthusiasts. All three of these companies have entry-level offerings, but none can be said to be the first choice of people new to buying cameras. Sony is the strongest of the mirrorless companies in terms of sales, and can also be said to be more accessible to mom and pop entry-level camera buyers. The deeper problem with Sony is that it as a total corporation is not financially healthy, though that (hopefully) has little bearing on its camera business in the short term.

Individual Efforts

Take another look at the picture of the lineup above.... yes, there is a size difference, but not a meaningful one. With the exception of the A6000 and the OM-D E-M5, you would need to carry each in a separate camera bag regardless of manufacturer. Only the Sony and the Olympus cameras are truly small enough to fit in a coat pocket, and even then there are caveats. The A6000 is small by virtue of its collapsible lens, which relies so heavily on the in camera software correction that the camera menu doesn't even let you turn it off. The E-M5 is small by virtue of having a prime lens (17mm f/1.7) attached to it; change that to a zoom and the size goes back up again. The Fujifillm X-E2 is smaller than either of the Canon or Nikon, but is denser and more weighty. It's small relative to it's capability when you consider the combination of an APS-C sized sensor paired with a brighter than average f/2.8-4 zoom lens, but the entire combination is large by mirrorless standards.

The Canon and Nikon take different routes to reach "smallness". The SL1 has an undoubtedly small camera body, but is paired with a normal-sized DSLR kit lens. The SL1 has managed to survive whereas the EOS M left the North American market with a whimper. Nikon takes it further, not only pairing down the body, but also by shrinking the lens through the use of a collapsible lens barrel. In kit form, the D5500 (like the D5300 and D3300) is practically speaking, a "smaller" camera than the SL1. Canon makes up for this with the diminutive EF-S 24mm f/2.8 and the excellent value-for-money EF-S 10-18mm. Between these two companies, two different strategies are at play. For many first-time buyers, Canon is the "safe" choice, much like how Toyota and Honda are "safe" choices for car shoppers. Nikon is somewhat less advertising-driven than Canon, and to appreciate the difference between newer cameras like the D5500, you need to see them in person to get the full gist of the change in body style. This is a different task; Canon can "train" buyers to look for one of their entry-level cameras through advertising campaigns, but Nikon needs to physically get the cameras into the buyers' hands in order to sell their benefits.

There are deeper differences, of course. Some prefer the optical viewfinder of a DSLR; others don't like the feeling of holding a camera up to eye-level. Canons and Nikons have a larger selection of compatible lenses. Micro Four Thirds has the most complete lens selection, even if availability isn't always the best. Fujifilm has the unique X-Trans look. Yes, there are differences, but these matter less to those just entering the market. A buyer looking for a smaller camera might not be specifically asking for a mirrorless camera, and somebody who wants better image quality might not end up with a DSLR.

Industry Challenges

This is mostly is why mirrorless isn't the future, at least not the immediate future: if the majority of the market (Canon and Nikon) don't want to shift their consumers away from mirrorless, then the shift won't happen. Both companies have made half-hearted attempts at the mirrorless market (Nikon 1 and EOS M), but the level of care given these product lines is telling. Both companies are shrinking their existing DSLR lines as a means of combating the rise of mirrorless cameras. Conceivably, one day all low/mid-level cameras will be mirrorless, but it won't be this year or even the next. Mirrorless as a proportion of unit sales continues to rise, but it's in a race against itself for profitability, not against the DSLR's.

For their part, Sony seems the most credible. Fujifilm doesn't have a large enough distribution, whereas the Olympus and Panasonic camera divisions struggle for financial relevancy in their respective conglomerates. Micro Four Thirds has pretty much headed upwards to where the margins are higher. Yes, there are great value-oriented options such as the GM-5 or E-M10, but as a whole, entry-level mirrorless is "not a thing" as the vernacular would have it. Rather, it's the high-end,like the E-M1 or the GH4, that is supporting sales. The problem with this is that in this higher market space, the niche becomes smaller. Both cameras are adept but pricey; you pretty much have to deliberately want one or have a specific need for one considering the opportunity cost.

That's symptomatic of the small(ish) large-sensor camera space as a whole. It's not a case of DSLR's versus mirrorless; the market is much more fragmented than that. It's symptomatic of a mature market; many people already have a camera and aren't interested in upgrading, and those that are looking for one are more interested than ever before in devices are tailored specifically the individual consumer. During the DSLR boom we were all DSLR users. Now during the contraction everybody is a different type of user. You might be an enthusiast DSLR guy, an entry-level mirrorless beginner, a mirrorless street shooter, a back country m4/3 aficionado... there's not common touch point tying the market together. Perhaps there never was, but the differences are starker now than before.

A buyer looking into cameras of such is faced with a number of choices. If you want small and high quality, it's Micro Four Thirds, but the availability can be a problem and the well-regarded cameras are pricey. You could go with Fujifilm; against great lenses but pricey when you build out a whole system. The Sony lineup is affordable but perpetually lacks the quality lenses that it needs to make the system truly shine. Canon and Nikon are ubiquitous, but are at the larger end of the size scale. No one system has it all, and each plays to it's consumer base. This can make for a bewildering choice for the uninitiated. It's a tough problem to overcome in a contracting market, especially since each company is preoccupied with fighting to keep their heads above water. This is a real shame, as cameras have never been as capable as they are now; it just takes a little more explaining to get that message across in today's environment.

1 comment:

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