Now mirrorless is a raging success. Samsung will be back

Mokara · April 30, 2019

On 4/22/2018 at 6:58 PM, Robert Collins said:

I dont see it myself. The numbers dont really add up. The digital camera market (ILC/compacts) is a US$10bn a year market of which Canon/Nikon/Sony hold 85%. If Samsung re-entered the market and we heroically optimistically assumed they gained a 10% share - it would only amount to US$1bn a year - less than 0.5% of Samsungs US$200bn+ annual sales. Compare that to the US$500bn a year smartphone industry.

However there are, I think, two 'possibilities that could bring Samsung back into the market.

First, Samsung and Nikon are almost a 'perfect' fit. Samsung key competencies are electronics and Nikon's core competency is photography - ideal when cameras are turning into electronic products. Samsung brings image sensors, image processing, lcds etc and Nikon brings lenses, brand, market share and distribution. Furthermore, Nikon is ultimately going to be seriously disadvantaged long term relying on Sony for sensors (Sony being a major and growing competitor in cameras). So a joint venture/strategic partnership between the two makes a lot of sense (assuming that Samsung is interested in the digital camera to showcase its tech.)

Second, and related to this, Samsung could quite easily acquire Nikon. Samsung is a US$300bn market cap company and Nikon is a US$6bn market cap. company. So acquiring Nikon is chicken feed to Samsung. So if Samsung wants to reenter the market, it makes a lot of sense to buy into the market rather than try to recreate their market share from scratch.

But even the Nikon/Samsung tie up in one form or another I see as pretty unlikely because Samsung really hasnt shown a lot of ambition in the image sensor market (despite some press reports to the contrary.) Take the flagship S9/S9+ as an example. It continues to use both Samsung and Sony image sensors (and people dont seem able to tell the difference.)

https://***URL removed***/news/0634864640/tech-insights-teardown-confirms-galaxy-s9-uses-samsung-and-sony-image-sensors

So if Samsung cant be bothered to showcase their image sensor tech in their flagship smartphones, I dont think they are likely to do it in digital cameras.

The sensors in question are manufactured by Sony, but use Samsung's designs. Hence the Sony part number. Samsung make the same sensor themselves. They are identical, other than nuances resulting from the particular manufacturing procedures used. The reason they use Sony for this is that they need a lot of production in a short period of time, after which the plants would sit partially idle. It makes economic sense to pay someone else who also has a partially idle plant to pick up the slack to even out that burst phase. Since the Sony that makes sensors is not the same company as the Sony that makes cameras, there is no conflict of interest involved. Sony set things up that way precisely so that they can manufacture parts for competitors.

The reason for being in something like the ILC camera market is the same reason Mercedes, Honda and Renault are in Formula 1: it would be a test bed for new cutting edge technology and a training room for their best engineers. They don't even need to make a profit, the benefits come in other ways. Panasonic is probably like that too. Not so for Canon and Nikon, who actually do have to make a profit on their products and cannot leverage R&D significantly through other activities (although Canon likely makes good money from licensing their extensive patent portfolio).