Canon Q2 financials - more bad news from the imaging segment
Canon released their financials last week and for the most part, the news was grim as compared to last year. Imaging sales were down 23% and profit dropped down to a shockingly low of 2.7% of net sales. To make matters worse, the two core segments that makeup imaging for Canon are inkjet printers and cameras. Both of them are slumping at the same time.
As the entire camera market continues to slump, it's no surprise that the world's largest manufacturer of cameras would feel the pinch of the contracting market. I've seen some really odd conclusions about these financials in some corners, perhaps they have their own agenda. These results really should not come as a surprise to anyone including Canon. When the two largest manufacturers of cameras switch their mounts, at the same time even, the disruption on the market is immense.
I see there's some mention about this statement from Canon and make up some rather wild accusations or claims about it;
in the full-frame category of the market where price competition is increasing, as a result of prioritizing profitability, unit sales were below our target. However, for interchangeable-lens cameras overall, our unit sales were in line with our plan.
Note this is the full frame market, which includes both DSLR and mirrorless. This of course, simply indicates that Canon underestimated the effect of the Canon RF mount, and the overestimated the rate of adoption of the Canon RF system. This, of course, stands to reason, Canon themselves have already mentioned a more professional "5D" for the Canon RF mount is coming, many are waiting to see what the full lineup looks like before switching. Many others are waiting, because they feel their 6D and 5D cameras are more than good enough right now.
I've said it in the past, that in a way both Canon and Nikon waited too long to switch mounts, and not because of Sony. The reason why is that the 5D Mark IV and the D850 are simply incredible cameras and for many people that purchase them, they are the last cameras they need to buy. Basically, the last camera syndrome plays a huge effect here.
Not only is Canon (and Nikon as well) facing external competition, they are facing internal competition from their older legacy mounts. Compounding that problem is that those people still with the legacy mounts, are holding off purchasing new cameras because they know their mount is not going to be supported as much.
So what's Canon going to do about all this? Basically, grin and bear it, there's not much they can do - it's simply a matter of time. On the Canon RF front, outside of lenses, not much is probably going to occur this year. New sensors and new DIGIC will dominate the next products coming out for the Canon RF mount. You can also read the tea leaves that the EOS-M system is still very important to Canon's continued market dominance, as they mention here;
As for Imaging System, although we saw unit sales of mirrorless cameras grow at a higher rate than the market, sales and profit for the entire business unit declined, due to the impact of DSLR market contraction, particularly for entry-class models.
In other words, Canon's marketshare of mirrorless continues to increase. Most likely because there are lowered expectations of profit, from the EOS-M system. This would also lead one to guess that higher-end EOS-M cameras may be coming (and perhaps lenses) to increase the high-value product mix of the EOS-M system - which for the most part has relegated itself to bargain-basement sales. The Canon M5 and M6 Mark ii's may end up being very important cameras for Canon this year.
You can read Canon's financials here
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