By Kevin Purcell
I pointed Mike to this slide in the Sony investors report that was posted on Image Sensors World.
The graphic both shows (and tries to hide by using area comparisons) the major changes in the market for Sony's image sensors over four years, fiscal year (FY) 2013 to FY 2017.
The first thing you notice is all the growth is in "non-traditional" camera markets: smartphone and tablet cameras, automotive cameras and Internet enabled security cameras. Ordinary still cameras are in decline.
The volume of compact digicam (DSC) sensors Sony will ship will drop from 51 million to 13 million pieces over the four years; that is, the FY 2017 market will be about a quarter of the size of the 2013 market for Sony. But the total market for DSC sensors will drop from 92 million (i.e. using Sony's volume and current share 92 = 51 * (1/0.55)) to 13 million (= 13 * 1.00) so the total DSC sensor market will be 15% of the FY 2013 market.
Compact digicams really are going away. I suspect the remaining will all be long zoom digicams or large sensor compacts—the two areas where smartphone cameras can't compete.
Perhaps more important for the TOP readership are the numbers for interchangeable lens (ILC) sensors (from type 1-inch to 36x24mm ["full frame"] from FY 2013 to FY 2017. The FY 2017 market for Sony ILC sensors will be about 55% the size of the 2013 market. The total market for ILC sensors will drop by about half from 60 million (60 = 18 * (1/0.3)) to 29 million (13 * (1/0.45)) so the total ILC market will be 50% of the FY 2013 market.
So Sony expects half the volume of ILC cameras in the market in FY 2017.
That means fewer cameras and fewer redundant product iterations, but perhaps less choice too. On the other hand it might mean more narrow niches in the market will be served. Camera company makers are going to move to where the largest margin is.
Sony Semiconductor is helping that by pushing 4/3, APS-C, "full frame" and now "645D" sensors to any camera company that wants them.
Sony (the camera making part) is in a scramble to get their camera systems into position before the market sets in concrete again (rather like the old SLR film camera market with two major protagonists). That means other companies are going to have to do the same. This would explain Sony's rapid iteration in the market with "mark 1" rapidly followed by "mark 2" the next year to gain traction in particular niche markets. This sense of urgency would also explain Sony's aggressive pricing strategy on A7 "full frame" mirrorless cameras.
I'd expect to see "full frame" (or larger) cameras from Fuji, Ricoh/Pentax and perhaps Olympus in the next year or so. Not because of "sensor-size fanboyism" but because the business is driving them in the direction of higher margins. All three of these companies have "hobby camera" businesses—the business is not a real income generator, and in most cases makes losses, but seems to appeal to Japanese traditionalism ("we used to make good cameras and film and we still do even if there is not much of a market because we're Ricoh/Fujifilm/Olympus").
It's also possible that it may mean fewer ILC camera companies as some of the traditional camera companies in a loss-making business get squeezed and decide to exit the market. You can see parallels with previous market turndowns in the 1970s, 80s and 90s and the trail of missing companies they left. Nikon and Canon may have already seen this direction and have decided that they'll come out ahead after yet another market transition if they keep a steady path. I don't think that's guaranteed this time. It would also explain Nikon's strategy of pushing "full frame" DSLRs now. I still can't understand why Canon is lagging in sensor performance. Perhaps they'll start buying Sony sensors too but if they haven't started by now one starts to wonder what their sensor strategy is.
In the meantime this may be a golden age for camera purchasers. The quality and variety are high. Competition is keeping up pressure on the manufacturers to keep prices down. It can't last.
Perhaps this is indicating a future camera market that looks more like the film camera market of old. People will upgrade their cameras every five to 10 years just like in the old days (but they no longer need film in the meantime).
©2014 by Kevin Purcell, all rights reserved
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