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Mirrorless cameras offer glimmer of hope to makers

by Reiji Yoshida

Staff Writer

Japan, once a leader in manufacturing, has lost its competitive edge in various electronics products, including televisions, video recorders and portable music players.

Now it may be poised to concede one of its long-time strongholds: the digital still camera market. Japan reportedly held 80 percent of the global market as of 2012.

The digital camera market has been rapidly shrinking due to the exploding growth of smartphones with advanced built-in cameras, forcing Japanese makers to abandon their low-end lineups and focus more of their resources on high-end products, including single-lens reflex cameras and mirrorless nonreflex cameras with interchangeable lenses.

The strategy may be working relatively well in Japan, as domestic consumers tend to favor more expensive products. But in the other parts of the world, the top firms, namely Nikon, Canon, Sony and Olympus, are likely to face deteriorating business conditions, experts say.

According to the Camera and Imaging Products Association, an industry group of major Japanese camera makers, 53 million Japanese digital still cameras were shipped in the January-October period, down 37.8 percent from the same period of 2012.

In terms of value, the shipments amounted to ¥955.6 billion, down 24.6 percent.

The fall was particularly steep in small, inexpensive compact cameras with built-in lenses. They saw a 43.2 percent fall in unit terms during the same period, faced with intensifying competition with smartphones, particularly Apple’s iPhone and Samsung’s popular Galaxy series.

This rapid shrinkage has already forced Fujifilm and Olympus to terminate development of low-end compact cameras, prompting other makers to develop middle- and high-end cameras with more added value and functions.

“If you look at the world market, the situation is rather severe,” said Toru Miyamoto, an analyst at market research firm GfK Marketing Services Japan.

“On the world market, you can find few elements that can ignite new demand,” he said.

To counter the growing presence of smartphones, Japanese makers have tried adding more functions and value to their products, such as wireless data transfer, larger image sensors, more stylish designs and high-quality body textures.

Particularly popular are a new category of mirrorless nonreflex cameras with interchangeable lenses. Cameras in this category are, unlike an SLR, lacking a mirror that leads an image to an optical finder but still can be used with interchangeable lenses.

Mirrorless cameras can be much simpler, smaller and less expensive than SLRs. Panasonic came out with mirrorless cameras in 2008. They accounted for 17.5 percent of the Japanese market in terms of value in 2013.

According to CIPA, domestic shipments of these cameras surged 12.1 percent in the January-October period in terms of value compared with the same period last year.

According to GfK’s survey, the sales saw even bigger growth — of 21 percent — in the same period in Japan. The gap between the sales and shipments can be attributed to excess inventories from 2012, Miyamoto said.

Seeing the growing popularity of these cameras, Olympus, a long-established SLR maker, announced in September it will terminate its SLR development and instead focus on mirrorless cameras.

In October, Sony released the new Alpha 7 series, the world’s first mirrorless camera featuring a full-frame image sensor that is as large as that of an exposure of 35 mm analog film.

The Alpha 7 retail price was initially expected to be around ¥150,000 — substantially lower than an SLR with full-frame image sensor but more expensive than a low- or middle-end compact camera.

Panasonic and Fujifilm, suffering from drastic falls in sales of compact low-end cameras, have similarly shifted to mirrorless cameras, trying to win over some of the high-end users loyal to the long-established Nikon and Canon brands.

Miyamoto of GfK said this marketing shift is working relatively well in the domestic market so far, and predicted domestic sales of digital still cameras will see an increase in terms of value next year.

But globally, mirrorless cameras are not as popular, apparently because their small size accounts for little outside Japan, he said.

Shipments of mirrorless cameras with interchangeable lenses in markets other than Japan saw a 13.2 percent fall from 2012 in terms of value, according to CIPA.

Total camera shipments overseas by Japanese makers amounted to ¥828.3 billion in the January-October period, down 27 percent from the same period in 2012, while that for the domestic market was ¥127.3 billion, off 3.3 percent, CIPA said.