2018 Camera Market at 1985 Levels

I had a few moments to look at recent statistics from the Camera and Imaging Products Association (CIPA). Fortunately I still have some old CIPA reports that are no longer posted on the association’s website. These old reports allow me to go back as far as 1951 to look at camera market ‘total shipments’ statistics. What I discovered was that the 2018 camera market was at 1985 levels.

Before we discuss this comparison, let’s have a quick look at 2018 CIPA numbers.

In terms of total camera shipments, CIPA reports 19,423,371 units for 2018. This compares with 24,978,486 in 2017. This represents an overall decline in the camera market of 22.2% year-over-year.

Built-in lens cameras went from 13,302,797 units in 2017 down to 8,663,574 in 2018. A drop of 34.9% year-over-year.

Interchangeable lens cameras also saw a drop year-over-year, but to a more modest degree going from 11,675,689 in 2017 to 10,759,797 in 2018. This represents a decline of 7.8% year-over-year.

It is interesting to note that the shipments of interchangeable lens cameras surpassed built-in lens cameras in 2018. The shipments of built-in lens cameras has been falling precipitously for many years. There’s no doubt that this has been caused by the impact of cellphones on this segment of the camera market.

Many of you may be wondering what has happened with DSLRs and mirrorless cameras. Let’s have a look…

The shipments of DSLRs continued to drop year-over-year. In 2018 6,620,999 units were shipped compared to 7,595,708 in 2017. A decline of 12.8% year-over-year. By comparison the shipments of mirrorless cameras has increased year-over-year by a modest 1.4%. In 2018, shipments of mirrorless cameras totalled 4,138,798 units compared to 4,079,961 in 2017.

The introduction of digital cameras was a technological disrupting factor that dramatically increased camera shipments as buyers replaced their old film cameras. The camera market peaked in 2010 with 121,463,234 units shipped. Prior to the introduction of digital cameras, the largest film camera market occurred in 1997 with 36,671,000 units shipped.

1999 was the first year that CIPA began reporting digital camera shipments, showing 5,088,000 units that year. By 2007, the association stopped reporting film camera shipments with only 792,000 units shipped in that final year of reporting. It’s clear to see how rapidly a new technology replaced an old one.

The same can be said for the impact of cellphones on the built-in lens camera market. When the camera market peaked in 2010 at 121,463,234 units shipped, the built-in lens camera segment represented 89.4% of the market with 108,576,298 units shipped. Between 2010 and 2018 the built-in lens camera market has declined by 92%, with 8,663,574 units shipped last year.

While one month does not a year make, the January 2019 CIPA statistics are not positive. Built-in lens camera shipments are down 31.6% compared to January 2018.

Interchangeable lens cameras have also declined in January 2019 by 19.1%. This has been driven by shipments of DSLRs which were down 21.8% in January compared to the same month last year.

Mirrorless cameras were down 14.8% in January 2019 compared to the same month last year. Mirrorless camera production numbers were up for the month by 6.9%. It is safe to say that the introduction of full frame mirrorless camera by Nikon and Canon have had a positive impact on the production volume for that segment of the market. The fact that shipments significantly lag production is not a positive.

I had to go back to 1985 CIPA statistics to find a year that approximated 2018 in terms of total camera units shipped. In that year 20,246,000 units were shipped. Those of us who were buying and using interchangeable lens cameras back then can attest to the fact that the camera market was very different then, than it has been for most of this century.

Interchangeable lens cameras were used mainly by professional photographers and people that may have needed this type of camera gear for their work. Enthusiasts who had a reasonable amount of money to invest in their hobby were also in the market, but to a lesser extent than they have been in recent years. I bought my first interchangeable lens camera, which I needed for my work in the newspaper business, in 1974. That year only 5,995,000 cameras were shipped. Who knows… as the market continues to erode that size of camera market could become the new normal.

As I noted in a few articles over the past number of years, these fundamental shifts in the camera market are likely to result in a number of things happening that will affect photographers.

  1. The number of camera models will decrease in the longer term. Right now we are in a transition period as manufacturers shift their product offerings away from DSLRs and into mirrorless. This will take a few years to complete. I think it is reasonable to expect that most DSLRs will disappear in the future. The first cameras to go will be low volume, low profit models.
  2. Built-in lens cameras will become more specialized. In order to compete against cellphones the camera manufacturers will need to offer photographic capabilities that cellphones will find difficult to copy. Features like longer range optical zoom lenses and rugged construction designed for adventure sports, for example. We will also see larger sensors being used in built-in lens cameras so they can provide better image quality when compared to cellphones.
  3. Camera prices will continue to rise. As manufacturers are faced with more unit volume contraction in the camera market, their profitability will be squeezed. This will necessitate them to increase their per unit margins so they can reach their break-even points on a smaller number of unit sales. We should all expect to see higher retail price points continue into the future, and perhaps at a faster rate than we have seen during the past few years.
  4. Shifts in distribution strategies are possible. If buyers begin to increasingly rely on camera reviews found on the internet and buy online, some manufacturers may find it necessary to rethink their distribution strategy. For some, it may not make sense to market through local camera dealers any longer. They may eliminate this step in their distribution chain, and the costs associated with it.
  5. Additional consolidation may occur. As the overall unit volumes in the camera market continue to decline additional consolidation by camera and lens manufacturers may occur. It is possible that some manufacturers will simply disappear. Those brands at highest risk will be the ones with the lowest volumes and the least amount of product differentiation.

So, what can we do as photographers to prepare for these potential shifts in the camera market?

  1. Be an educated buyer. Do your research and make sure you are buying the equipment that best suits your needs.
  2. Future-proof your camera system as best you can. Regardless of the gear that you may own, if you current system is serving you well, look to augment it with additional lenses, bodies and batteries to extend its useful life.
  3. Maintain your current gear. Take time to clean and maintain your gear to help extend its life.
  4. Be wary of product hype. Manufacturers will always tout the ‘latest and greatest’ features that their gear offers. If you truly need those capabilities, then make a prudent investment. If not, save your money until you really need to replace gear.
  5. Sell DSLRs before it is too late. As mirrorless cameras increase their penetration in the interchangeable lens camera market, the value of DSLRs in the used market will likely decline. If you plan on going mirrorless in the near future and need money from your current DSLR gear, don’t wait too long to make the change. The value of your DSLR will likely decline more rapidly in the future.
  6. Push yourself to use your gear more fully. Many of us do not fully utilize all of the capabilities of the gear we currently own. Using it more fully will extend its useful life.
  7. Experiment more in post. Every piece of camera gear comes with some kind of trade-off. Spend some time in post to experiment with your current software to learn how you can squeeze more quality out of your current images.

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14 thoughts on “2018 Camera Market at 1985 Levels”

  1. Tom,

    Thanks for your post and analysis. I think the points you raised as well are spot-on. The way I read it as far as our country is concerned (Philippines) was that the advent of digital photography around the turn of the millennium and the rather quick pace of development enabled the camera manufacturers to significantly bring down the prices around 2005-2007 as well as the availability of more models (basically the tiers would be: entry level, mid/semi-pro, high-end/pro). Fueled by social media as well as the proliferation of local photography fora, a lot of people from the mainstream got into photography. As with any fad/bandwagon, once the initial novelty wears off, there would be fall-offs down the road.

    It is also interesting how the evolution of smartphone/camera-smartphone hybrids is impacting the camera industry. Years ago, I remembered shaking my head at local events touting Nokia X as an able pro-DSLR replacement. I doubt it will happen anytime soon but then again, how many people are professionals earning their living shooting? The smartphone companies are also pushing hard in making inroads into the imaging business. As of this writing, OPPO is pursuing further developing their periscope-style zoom lens for their smartphones while other manufacturers are adding more cameras of various zoom lengths (wide, normal, mid-telephoto).

    It’s interesting the point you raised about the decline of DSLR prices. I thought it would happen more slowly here but based on observations on local pre-owned market offerings, the prices of second-hand DSLRs have come down rather drastically in the wake of CaNikon venturing into full frame mirrorless. Like it or not, mirrorless is the way of the future IMHO no matter if companies like Nikon keep churning out press releases about keeping their F mounts while simultaneously developing the Z mount (as a former longtime Nikon user, I guess that’s just to reassure their legion of F mount lens owners). Diminishing sales and profits may keep that from happening and much rests on the fate of their Z6 and Z7 offerings.

    One last interesting point you raised: the evolution of distribution channels. While I myself like the old school channels of a brick-and-mortar-store where I can try on the camera/lens before buying, the practicality of online distribution/ordering may be the way of the future.

    Oggie
    http://www.lagalog.com

    1. Hi Oggie,

      Thanks for adding your perspectives to the discussion! I found your comment about the decline of DSLR prices in the Philippines of particular interest. The uptake of mirrorless cameras varies quite a bit by geographic region. CIPA reports their statistics by region which include Japan, Asia (except Japan), China, Asia (except Japan and China), Europe, the Americas, and Other. The market in China has become large enough that these breakouts were added in 2019 reporting. According to January 2019 data, the mirrorless market in China is about the same size as the market in Japan.

      At this point we only have January 2019 data but here are the uptake rates of mirrorless cameras in regional interchangeable lens camera market as reported by CIPA. I’ve also included the total number of units in the interchangeable lens camera market for that region:

      Japan: 60.9%, 53,365 units
      Asia (excluding Japan and China): 50.8%, 113,318 units
      China: 49.3%, 65,432 units
      Other areas: 46%, 24,126 units
      Europe: 31%, 143,095 units
      Americas: 29.9%, 146,852 units

      These regional breakouts give us some insights on the potential speed with which the value of DSLRs will fall, i.e. the regions with the highest mirrorless uptake rates will have the most rapid drops in used DSLR values. With your geographic region already crossing the 50% mirrorless uptake rate, the drop in DSLR values that you noted in your comment is absolutely logical. DSLR values in the Americas and Europe will likely hold longer than in other parts of the world.

      I have noticed that Nikon Canada is offering up to a $500 bonus on camera trade-ins towards the purchase of a new Z6 or Z7. WEX Photo has a 10% discount offer on used DSLR bodies on its website. These types of marketing initiatives indicate to me that the switch to mirrorless may be accelerating.

      Tom

    1. Hi ed,
      The price on an unpopular item is likely irrelevant from the perspective that all companies in the camera market face the same profitability pressures when overall market volumes fall. When markets are in steep decline, as is the camera market, the companies in it have three basic strategic options: retrench, diversify or divest. Depending on how low market volumes become, we could be witnessing a market that is in its own ‘death spiral’. The size of the market will dictate how many competitors will be able to stay in and still make a profit.
      Tom

  2. “Camera prices will continue to rise”

    I would agree that the mean price will rise, but as I do not like means, I am more concerned by the mirrorless cameras prices as they are what will sell in the future.

    Will they rise?

    Not so sure, competitive pressure will be fierce in this segment unless some makers leave the field.

    1. Hi hpchavaz,

      Competition will help to temper the rise in prices to some extent. The reality of contribution margins and break-even points in a declining market will not go away because of competition. If the camera market continues to shrink I think it is very possible that many companies will find that their camera divisions cannot make money… and they will exit the market.

      For example, Panasonic is pushing hard in other areas of its business, notably batteries for electric cars… https://www.cnet.com/roadshow/news/toyota-panasonic-joint-venture-electric-car-batteries/

      Whether Panasonic will continue to dabble in the camera business is anyone’s guess. I suspect that if volumes continue to drop significantly the company may decide to exit the camera business if they cannot make the ROI needed to maintain their presence.

      Tom

  3. Fine summary and good advice. Of course, I’ve not followed the advice. I have a different camera for every day of the week and keep post processing to a minimum.

  4. It will be interesting to see if the recently released mirrorless cameras will encourage new customers or whether it will be DSLR owners replacing their current gear.

    Is dropping a mirror box and charging a fortune for lenses going to reverse the decline?

    1. Hi Mark,

      I think the rise in camera pricing really boils down to smaller industry volumes and camera companies needing higher margins per unit to cover their fixed costs across a smaller number of unit sales. Like any business they need to stay profitable… so prices will rise.

      As consumers we have been spoiled by comparatively low digital camera pricing for quite a few years… not counting some of the price increases the past 2-3 years. I think my 1974 Nikkormat cost me about $265 which in today’s dollars would be roughly $1,250. There are many DSLRs that are priced under $1,250 that are excellent pieces of gear.

      I don’t have any access to market research done by the major camera companies. I suspect that they have all discovered that the ‘glory days’ of rampant growth in the digital camera business are dead and gone. Nikon’s move to bring out full frame mirrorless cameras rather than going the cropped sensor route, is a pretty strong signal to where they feel the market is headed.

      Those of us who continue to purchase interchangeable lens cameras in the future will get outstanding products… that will be accompanied by much higher prices in my opinion.

      Tom

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