This post may contain affiliate links(s). An affiliate link means I may earn advertising/referral fees if you make a purchase through my link, without any additional cost to you
. It helps to keep this site afloat. Thank you in advance for your support. If you like what we do here, maybe buy me a coffee.
Canon's 2018 Financials - The market slides and Canon with it
Canon has just released its fiscal year 2018 reports, and the results are not as good as one would hope, nor as bad as they could be. We will focus on the imaging side of Canon's business here.
Canon has reported that the market overall has slide sharply this year down to 10.3 million units from last year's 11.4 million units. Canon states that the market contraction primarily happened on entry-level models and that the advanced amateur market paused while waiting for the new camera models from Canon and Nikon this year. Even with that, Canon's rate of decline in terms of units was less than that of the market, increasing their market share overall to 48.8%, up slightly from 48.3% last year. While they didn't reach back up to the high of 2016 of 49.0%, that should be noted that year was the result of shortages primarily with other manufacturers due to the Kumamoto earthquake affecting Sony sensor manufacturing.
Canon has continued to be resilient in the face of a contracting market, showing relatively stable results now of 5.0 million units to 5.7 million units even though the market has fallen over 2 million units in those 4 years. However, this was the first year since 2015 that Canon has fallen as much as they did in 2018. You may notice that these numbers are slightly different than CIPA. It's my understanding that Canon is looking at year end reports on sales for the market, and CIPA is looking at shipped units. There will be some difference between the two numbers for year.
For interchangeable-lens cameras, the market in 2018 was down 10% to 10.3 million units. Our sales, were down 9% to 5.04 million units, which is a slower rate of decline than the market and reflects sales growth of our mirrorless cameras, including the EOS M50, a strategic entry class model that was launch in the first half.
However, while the picture looked good for Canon with respect to units, the same cannot be said for sales %. While the market dropped 10%, canon's overall sales dropped 14.6%, meaning that Canon has sold less by value than the market last year, and has slipped if you look at the sales value. This could also be why Canon's focus in the coming year is squarely around the higher value units such as the EOS R in the coming year, to make up ground on sales value in 2019. Canon also illustrated two proof of concept camera systems that they showed off last year in the US, and states that they will focus on similar new camera technologies to attract new users. It's good to see it's not all about expensive cameras with full frame sensors.
Canon certainly states that this is the year of the R, as they will continue to launch new R products and lenses in 2019 and that the EOS RF system is the priority for 2019, as they had this to say about this year and the coming year;
The key to this is the EOS R, our first full-frame mirrorless model, launched in the second half of last year. Although its contribution to last year’s performance was limited, sales have been strong due to its significantly improved optical performance, which has been highly rated by users. In order to further increase our presence in the mirrorless camera market, this year we will continue to expand our entire mirrorless camera lineup, consecutively launching new R-System products, including lenses. Additionally, we will also promote change in the distribution of internal resources, from development to production as well as sales & marketing.
Additionally, we will work to improve product mix, raising the proportion attributable to full-frame models that have high profitability by enhancing our mirrorless camera lineup and also expanding sales of full-frame models, particularly the EOS R.
We expect the market for camera equipped with full-frame sensors, which offer superlative descriptive performance, to continue growing at a stable rate. The customer base of this market are particular about image expression and pair their cameras with various lenses depending on the images they intend to capture. We will strive to improve total profitability by expanding sales of the full-frame model like the EOS R which will lead to expanded sales of lenses that have high profitability.
The outlook for 2019 is fairly pessimistic, as Canon expects around another 7% decline in the global market and for Canon themselves to shrink another 6% down to 4.7 million units, with their anticipated market share still sitting at just a touch under 49% at 48.96%. They also more telling, expect the EOS R, other possible full-frame cameras, and product mix to only have them go down 2% in sales against the market decline of 7%.
In 2019, we expect the market to continue to decline, shrinking 7% to 9.6 million units. Despite facing a shrinking DSLR market, we expect our interchangeable-lens camera sales overall to be 4.7 million units as we grow unit sales through new mirrorless cameras, including the ones that were launched last year.
Given the article from Canon's President a few days ago here, this report seems almost highly positive compared to what we were half expecting. All indicators aren't glowingly positive (see sales value) for Canon, they have some work to do this coming year to improve their product mix, profitability and sales.
blog comments powered by