Canon profits down 16% as demand for old-style DSLRs continues to slide

[Andrew Reid]

Canon reported their most recent quarterly profit today and said that DSLRs continued to face 'severe market conditions' noting yet another slide compared to the same period last year.

The firm cut its outlook for the rest of the year.

Read the full article

[sanveer]

Canon reported their most recent quarterly profit today and said that DSLRs continued to face 'severe market conditions' noting yet another slide compared to the same period last year.

The firm cut its outlook for the rest of the year.

Read the full article

I am not sure what will wake Canon up from their slumber. Maybe firing their tech department?

 

[Mat Mayer]

Maybe they are slowly getting out of the camera game to clear space in their stores for 3D printers?

"Research and advisory company, Gartner, has predicted that end-user spending on 3D printers is expected to increase from $1.6 billion in 2015 to around $13.4 billion in 2018¹." Source: http://www.canon.co.uk/about_us/press_centre/press_releases/business_solutions_news/1h15/canon_enters_3d_printing_market.aspx

[Kubrickian]

Try not to only post news articles that fit your narrow worldview:

http://www.technobuffalo.com/2014/01/02/sony-has-78-chance-to-go-bankrupt-in-two-years-says-macroaxis/

[Mat Mayer]

Sony spent ridonkulous money at the last World Cup advertising their 4K TVs so I was very surprised to learn how few TVs they actually sell (a lot but not as many as LG and far far less than Samsung). I assume they overprice everything.

[DBounce]

http://www.nasdaq.com/symbol/sne/earnings-growth

[JurijTurnsek]

Sony has almost hit rock bottom (a few years ago) and they bounced back with innovative products. Many big companies need to go through this and this is great for the consumer, so why should Canon be immune to this? Even if their profits tank completely, that can only mean that they will bring their most advanced prototypes to the market and that would be great.

In a capitalistic status quo the strategy is to milk every incremental generation release to the max - it's not like they don't have more advanced tech in their R&D lab.

[Astro]

Interesting!!!
It seems Panasonic are going well...50% jump in profit with car technology

http://recode.net/2015/04/28/panasonic-sees-fourth-straight-year-of-profit-gains/

http://www.businessinsider.com/r-panasonic-sees-fourth-year-of-profit-gains-on-auto-electronics-growth-2015-4

http://www.bloomberg.com/news/articles/2015-03-26/panasonic-sees-tesla-cells-housing-fueling-8-year-high-profit

Article also says that Sony is now showing some signs of a long awaited turnaround

 

 

[agolex]

Good day to you, fellow EOSHD stock brokers.

[premini]

The camera market is getting smaller. This in part due to cell ptones and also because of people that are happy with their cameras from 3-5 years ago and don't see the point of getting a new one (i know many of these).

I think that's the logic behind Sony's strategy of putting a lot of new features in order to allure people that don't see the point of getting the 7d II instead of the 7d.

That's also why all of the manufacturers , not only canon, are thinking about diversifying. People wont change the camera 2 times in a year. not even once.

[johnnymossville]

I think there are a few reasons for this.  

1. The world economies aren't doing great.

2. Canon hasn't offered anything radically new that people wouldn't be happy with their 5 year old Canons.

3. Mirrorless, mostly Sony is killing it right now.  Canon is becoming more like a dinosaur in comparison every day.

4. People take pics with and invest in phone technology now.  

 

[Mervyn]

As far als I'm concerned the 5DS is shit. I'd rather own a 2nd-hand 5D3 if I'd insist on using a Canon. I tried to explain to a friend why I think Canon is bad,  but he didn't really get it. Most average consumer stores are still mostly filled with Canon and Nikon stuff around here.

[Sekhar]

Try not to only post news articles that fit your narrow worldview:

http://www.technobuffalo.com/2014/01/02/sony-has-78-chance-to-go-bankrupt-in-two-years-says-macroaxis/

I don't think Andrew's post is about Canon struggling in general, he's specifically highlighting the impact DSLR decline (and possibly Canon's lack of innovation in the area) is having. Others may also be having problems, but this is not about schadenfreude.

[Joseph Ferrari]

The Sony A7RII represents a new level of encroachment into Canon's camp—the fast auto focus with EF lenses will make it easy to, maybe not switch completely, but definitely buy into the Sony system. That Canon hasn't given the mirrorless market enough attention is indicative of their arrogance.

"Absolute power corrupts absolutely!"

[Damphousse]

 

I am not sure what will wake Canon up from their slumber. Maybe firing their tech department?

 

By "wake up from their slumber" you mean stop focusing on making cameras?  You realize when Panasonic reported their earnings this year I couldn't even find a single news report breaking out the profits (or loss) in their camera division.  What was emphasized and praised was their move to ABANDON consumer electronics.  Nobody who pays attention to these matters from a financial point of view is saying 4k video is going to save Panasonic.  In fact just the opposite.  Wall St is NOT talking about the GH4.  Let's be clear about that.  The reason Canon is affected so much by this camera downturn is because they are the number one camera company in the world!  It's as simple as that.  If their camera division was a pimple on the butt of an automotive division that article wouldn't have been written.

Sony has almost hit rock bottom (a few years ago) and they bounced back with innovative products. Many big companies need to go through this and this is great for the consumer, so why should Canon be immune to this?

Sony's CHIP division is the star.  Not its camera division.  And the imaging chip division is a star because they make imaging chips for camera phones!  Again it's nice to think making hybrid video cameras is the end all be all but when you really dig through the financials and see how these companies are making profits its from auto parts and cell phones.  Panasonic and Sony have abandoned multiple consumer electronics markets.  Panasonic has done better because it has been more aggressive about abandoning those markets.

 

Under Hirai's direction, Sony has reshaped itself to target expansion in lucrative new areas such as sensors used in cameras for popular devices like Apple Inc's iPhones. That strategy has vexed some former executives who have urged Hirai to focus on innovation, not cost cuts.

 

I don't think Andrew's post is about Canon struggling in general, he's specifically highlighting the impact DSLR decline (and possibly Canon's lack of innovation in the area) is having. Others may also be having problems, but this is not about schadenfreude.

Well there has been a lot of misleading stuff that has been posted on this topic.  I would not invest based on any of it.  I have not seen a proper breakout of Sony and Panasonic's CAMERA division numbers.  You simply cannot analyze a company without looking at similar businesses.  Comparing a camera division to an automotive parts division is...  I don't even know the polite word for that.  Breakout the CAMERA division.  Also you have to take size into account.  People do this Mickey Mouse thing with percentages all the time.  They say, hey this competitor's unit volume is up 50% and this one is down 5%.  They of course neglect to tell you the first company is one tenth the size of the second company.

 

I mean in a general camera down turn is anyone surprised Canon would bear the brunt?  They have the most to lose.  Don't believe me?  Go look at financial press articles about Sony and Panasonic.  None of them even mention the CAMERA division.  They mention the chip division at Sony but remember a huge driver of that division is cell phone camera chips.  Look at what happened to Qualcomm when Samsung decided to use its own chips instead of Qualcomm's in some phones.  Then the rumor mill started saying Apple was switching to Samsung chips from Qualcomm.  Go peek at Qualcomm stock.

If Apple switches suppliers for its iphone imaging chip things will look pretty ugly financially over at Sony's imaging chip division.

Guys let's not kid ourselves.  Hybrid video represents either no profit or tiny profit for Panasonic and Sony.  Hybrid video is not driving these stocks.  Canon has disproportionate exposure to noncellphone cameras.  And it does so because of its success not because of its failure.  Well it has had a failure to have an industrial equipment division I guess.

 

By the way the iphone accounts for 70% of "innovative" apple revenue.  iwatch flopped.  ipad sales are falling.  ipod sales aren't even broken out.  They are a phone company.  When the phone market matures like the camera market you better have your apple stock position hedged.

 

Am I wrong about any of this?

[Sekhar]

Am I wrong about any of this?

Well, you can say "it's not that simple," and be right in almost any discussion of merit. Sure, we need all the facts before jumping to conclusions, but then you can't make statements like "Hybrid video is not driving these stocks" either. In any case, it's not just about video: Andrew is talking of decline of the DSLRs in general. We may like video here, but most DSLR buyers actually shoot stills. Bottom line though, I agree we don't know for sure why Canon's profits declined, but like all good forum members, we must speculate! And Andrew's argument fits the prevailing narrative and common sense.

[Nikkor]

Usually you would buy a rebel, now you buy an olympus om-d, this is true in my surroundings.

[Mervyn]

To be fair to Canon; The one thing they excel at is their color science, and their ergonomics aren't bad.

But Canon is not the only one with great color. Think Fuji or Olympus. Too bad they don't have good video.

What I dislike most about Canon is their attitude.

[Mattias Burling]

Am I wrong about any of this?

nope, I would say bang on.

[TheRenaissanceMan]

Sony spent ridonkulous money at the last World Cup advertising their 4K TVs so I was very surprised to learn how few TVs they actually sell (a lot but not as many as LG and far far less than Samsung). I assume they overprice everything.

Like crazy, yeah. LG's more modest OLED sets actually cost less than Sony's LCDs! It's unbelievable. 

As far als I'm concerned the 5DS is shit. I'd rather own a 2nd-hand 5D3 if I'd insist on using a Canon. I tried to explain to a friend why I think Canon is bad,  but he didn't really get it. Most average consumer stores are still mostly filled with Canon and Nikon stuff around here.

Ming Thein's been doing some great stuff with it. http://blog.mingthein.com/2015/07/02/canon-5dsr-review-part-1/
 

To be fair to Canon; The one thing they excel at is their color science, and their ergonomics aren't bad.

But Canon is not the only one with great color. Think Fuji or Olympus. Too bad they don't have good video.

Don't forget Nikon and Blackmagic. And unpopular opinion: I think Panasonic and Samsung have the best color science in the game right now. We're all just so used to the Canon look that we've adopted it as the gospel truth of camera color. 

Well, you can say "it's not that simple," and be right in almost any discussion of merit. Sure, we need all the facts before jumping to conclusions, but then you can't make statements like "Hybrid video is not driving these stocks" either. In any case, it's not just about video: Andrew is talking of decline of the DSLRs in general. We may like video here, but most DSLR buyers actually shoot stills. Bottom line though, I agree we don't know for sure why Canon's profits declined, but like all good forum members, we must speculate! And Andrew's argument fits the prevailing narrative and common sense.

But if hybrid video is driving these stocks as you seem to think, then where are the camera division numbers in these quarterly reports?