Nikon counting on emerging markets to boost SLR growth

Nikon cameras are displayed at the 16th China PE exhibition in Beijing in April 2013. Photo: IC

Japan’s iconic camera maker Nikon Corp will rely on emerging market consumer sales to fuel growth even though it forecast in August its first-ever drop in digital SLR sales, the company’s president told Reuters.

Makoto Kimura said on Tuesday Nikon is counting on consumers in markets like Brazil and India to drive sales of its single-lens reflex cameras (SLRs) in the mid term and has no immediate plans to follow its rivals into other sectors.

Canon Inc, for example, is hedging against further downturns in the consumer market with a push into surveillance cameras and Olympus Corp already relies on medical equipment for most of its profit.

“Penetration in emerging markets is still very low,” Kimura said. “Look at Brazil where we sell around 8 million cameras overall. Only some tens of thousands of those are SLRs. That’s why I don’t think that sales will drop that much… When people realize the value of an SLR I think we will naturally see growth.”

But with more than two-thirds of its revenue coming from cameras and its new ventures years from bearing fruit, analysts say Nikon is vulnerable to a prolonged slump in the camera market, particularly as consumers continue to switch to smartphones for their daily photographic needs.

“Nikon is sort of a pure player in photography, as it has been for decades,” said Chris Chute, research director of digital imaging at IDC, which reversed its forecast for sales of SLR cameras in 2013 to an 11.3 percent drop from an earlier forecast of an 11.9 percent increase.

Nikon has cut its full-year sales forecast for interchangeable lens cameras twice already this year, with global shipments of digital SLRs sliding 16.7 percent in the nine months through September, according to Japan’s Camera and Imaging Products Association.

Kimura concedes that a return to the rocket-fueled growth of the past decade now looks unlikely and that Nikon’s forecast in May of a 25 percent increase in SLRs over the next three years needs to be revised.

He is confident however that sales can grow even in relatively saturated developed markets, despite consumers’ increasing preference for smartphone cameras due to their connectivity and ability to quickly share photos online.

“For a lot of users now, a Web connection is the priority and photo quality comes second. But if a camera has both then they’re interested. That’s what we have to offer more of,” he said.

However, Nikon’s latest product, a retro-looking SLR called the Df priced at around 300,000 yen ($3,000), suggests Nikon is still aiming to please purist.

Nikon counting on emerging markets to boost SLR growth