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What is Nikon really up to?

Curtis_S

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Curtis_S Registered since 04th Jan 2005
Sun 18-Mar-07 05:20 PM

I just read through an entire post on the speculation of a D3X. I was very surprised at how off topic the conversation went. A great deal of the focus was actually not on the topic but spent attacking the moderator and then off to many tangents. The thread did give me pause to think about what Nikon was really doing and I have placed my thoughts below. I welcome constructive comments and thoughts as well as additional information that can help change or reverse my perspective.

I would like to say that I appreciate the excellent job Brian does for all of us. I'm sure Brian has nothing better to do but read through our thousands of threads making sure the purpose and values of the Nikonians organization (which includes all of us) are maintained. And I'm sure he gets paid those "big bucks" to volunteer his time. I would like to say "thanks" to Brian for taking on such a thankless job in order that all of us may voice our opinions in a public and civil manner with hopefully trust and respect for everyone. I’m glad you’re there when this is not the case.

Although there is a lot read into the actions or inactions of product delivery from Nikon, I believe Nikon is following a very aggressive strategy that is taking them into uncharted territory. For the first time Nikon is going after the consumer/prosumer DSLR market aggressively and they have timed this thrust to take advantage of the digital explosion and transformation from the point and shoot market to the DSLR. (This is a very real transformation as I have personally guided 4 work associates in the last 2 months into buying Nikons (3xD80 and 1xD50). All the talk now is about the lenses they want to get and how we use the equipment to our best advantage. (I have 2x 70-300 VRs sold in the last month as well).

In a very short time Nikon has overtaken Canon in market share (per all the data I’ve read on the different threads but not including the pro market). Nikon has not been a dominant player in the consumer DSLR market and has not seen this type of DSLR Camera volume before. They are suffering from the growing pains and this can be seen in product availability such as the 18-200 VR lens availability.

Nikon also is playing to win; they keep moving the price/performance point so fast that Canon is unable to react. There are no answers for a 10 mp D40, D80 and a 70-300mm DX, AFS, ED, for $499.

Nikon knows that for every consumer level camera they can "give" away now they own the lens and accessory sales for thousands of dollars more and will have likely capture that person into the Nikon DSLR family for life. Its turning into the razor/razor blade model and for every installed platform they have now, they lock up a lifetime of revenue.


Unfortunately Nikon being a small company has had to divert most of its resources into winning the consumer market and the pro end has been waiting and waiting. Since this represents less than 5% of the market, this was the right business move for them to make. Not that the D2Xs is anything but superb (and I love my D2X, it doesn't however lead in the areas that pros want which is high frame rate, megapixels, FOV.)

My belief is that pros need both the camera AND the glass to make the best solution and they can afford to throw money at the problem. Pros demand the large number of pixels and or high frame rate that Canon offers. Why?, because in sports shooting one may need to shoot a wider field of view to make sure the action is at least in the shot and then one can crop it down to center it and still have enough resolution to show pro level detail. The more pixels and more frames per second the better. (Guess how Canon markets their camera bodies?

The same goes with the big glass that goes with the sports shooters. Image Stabilization enables shots that can't be done otherwise. Nikon users are still waiting for a fast VR long lens. (I mean 400mm f/2.8 or 500/600 f/4.0 VR, AFS, ED, zooms?, etc.) On the other end of the spectrum, some pros need FOV and the pro glass with FF Canon is the only thing out there. Again, all of these specialty needs of very expensive hardware may make up less than 5% of the market. Yes it is the pro market, but in the long run Nikon expects to increase their share of the pro market by having more Nikon users. Prosumers will buy pro Nikon stuff as their needs grow. (As long as they are in the Nikon family.)

In order to compete with Canon, Nikon must amortize its development and manufacturing costs over a larger volume and in the long run this was going to be a huge competitive disadvantage relative to Canon if they did not gain the volume in the consumer DSLR market. I believe Nikon was in serious danger of being a non-viable company in the long run if they did not make this change. Now they appear to be winning in the consumer DSLR market, they will be able to have the installed base to generate more pro demand and prosumer upgrades as well as have the money to develop and MANUFACTURE the pro products they need to win back the pro shooters. Without the change in strategy, they could afford to do neither and in the long run and would have continued to fall further behind Canon.

We will have to wait a little longer for both the bodies (DX3,DX4)and lenses to match up with Canon's pro end better. My belief is that Nikon is aiming designs to leap ahead of Canon. They aren't planning to get even; they will have the resources to get ahead.

I am glad Nikon has made the moves they have in the consumer DSLR market, I am much more confident in buying their equipment knowing they are winning in their strategy and will be able to service me better and longer in the long run. I am willing to wait for the lenses and camera bodies I want from them. Since I am not a pro, I can afford to do this. Clearly pros need to make a living today and can't wait; therefore we see all of the white lenses on the sidelines of sporting events. I also am glad to stay with a company that values the investments made by current customers and will not abandon them by doing things like changing lens mounts. This may slow them down but in the short runt but in the long run will generate more customer loyalty.

For sure Canon will is not taking this gracefully and will respond aggressively. I think they are the ones now caught responding to Nikon's giant leap into THEIR market share. Others are trying to gain a foothold in this market as well such as Sony. In the end, we the consumers win as we are all getting a much better value than we would have thought possible just a few years ago.

Curtis S

Good judgement comes from experience, experience comes from bad judgement.~ Mark Twain

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