Posted by George Hager on October 24, 2008 at 4:00 PM
This may appear off topic at first, but I don't think so. I see Nikon and Canon both took a thumping on the Japanese stock exchange yesterday. OK, over the last year, the Japenese stock exchange has made Custer's Last Stand look like a pillow fight in a sorority house. Soooooooo....what does this mean to us photographers? Some of us have major decisions coming up - like whether to buy a new lens or food. I don't know much about economics as is proven by the fact that I am a photographer by profession. Maybe some of you better informed folks can help us less fortunate to understand possible future trends in the photographic markets.
A) Will todays's market trends have an effect on the introduction of new camera systems like the Nikon D3X or the Nikon rumored MX medium format system (or a good Canon wide angle zoom)? Even if they are in the works?
B) What effect will this have on availibility of equipment? Will we have to wait long periods of time? or shorter?
C) Will used equipment be worth more or less?
D) What effect will this have on R&D of new equipment?
Any input would greatly be appreciated as it will help me make the photographic equipment decisions I have to make in the near future. Should I buy now or wait? Should I sell now or wait? Should I rob the local 7/11 now or wait? You know, that sort of thing.
Posted by Mel Ladewig on October 24, 2008 at 5:32 PM
I'm not an economist, but I stayed at a Holiday Inn Express
A) Credit markets are integral to the creation of new technologies and the expansion of production capabilities. A reduction in available credit will hurt innovation and production expansion.
B) If demand increases but production facilities do not have capacity, then there will be shortages. However, I consider a camera to be a non-essential item for MOST buyers, so I would expect some downturn in demand.
C) Digital used equipment will always be worth less. Film used equipment in some areas has been more volatile. Used lenses, especially Canon "L" have maintained absurdly high prices (like 90%+ of new). Perhaps this will slip, but its hard to say.
D) See A.
Banks are out of money, so the 7-11 is probably your best bet.
Actually, if the gear you have now is still meeting your technical needs, then I'd wait for Moore's law to bring down the price on your next step. If you need the newest gear to maintain a competitive product, then I'd upgrade. Remember, the original 5D had an MSRP of $3200 and the 5DII is $2600. Moore's law is in effect.
Posted by bill meikle on October 24, 2008 at 6:17 PM
I agree with Mel, sales will drop, revenue will drop, competition will increase.
Posted by Rick Dunn on October 24, 2008 at 7:49 PM
I don't think it will have a big impact; certainly not one that would dramatically alter equipment availability or introduction of new products in the near future. Large companies like Canon and Nikon aren't relying on today's market trends or credit to fund projects close to completion. They're also very diverse companies; consumer photographic equipment is only a part of their product portfolio.
All a bit of an educated guess, but...
A) for projects in the works, it's unlikely to affect delivery. Nikon will release the D2X replacement and the new MX system early next year most likely. That means they should already be nearing pilot and production phases. Production equipment is purchased and being piloted. These are aimed at market segments that have plenty of expendable income, and probably will continue to.
B) Probably no effect again. Any new product close to completion has to be marketed, shipped and sold. Prices could change depending on demand, though I'd guess that rebates are more likely than price drops. Nikon is more worried about what Canon is charging than how our spending habits have changed recently.
C) I'd expect used equipment to be more in demand as some people pull back on spending and consider used equipment in lieu of brand new, but don't think it will be enough to alter prices all that much. Depends on the product category, I think. People who can afford $5,000 DSLRs had some expendable income to begin with, and that probably hasn't changed much (unless they were tapping into their 401(k)s to fund their hobby!) When you get down into the consumer lines, those are people more likely dipping into the weekly paycheck, and used may be much more attractive than new. So maybe a bias towards used in the p&s and low end DSLR market.
D) R&D is the one place where it may have some impact. Companies will need to continue to invest heavily though; it's a competitive market with rapidly evolving technology. They can't afford to pull back too much. What may happen is longer gaps between product introductions, probably more a result of thinner R&D budgets during uncertain times than anything else.
Assuming you have the funds, I'd proceed as you had been planning. Things are actually working in favor of folks with expendable income. A lot of what's going on is affecting investments, credit, mortgage availability. The spending power of money is actually increasing. The dollar is up substantially, oil is down, commodity markets are way down.
I might wait until closer to the holidays to buy the new stuff and sell your current stuff. More demand for your used equipment as people shop for the holidays, and retailers are likely to be aggressive with sales. Probably won't help with a high end DSLR, but maybe on the accoutrements.
I'd definitely rob the 7-11 NOW. Dollars today are always worth more than dollars tomorrow. Especially with the rise of the Euro.
Posted by Todd Caudle on October 24, 2008 at 9:10 PM
Hey, if Chrysler and GM can talk about merging, can't Canon and Nikon also? (blasphemy!)
BTW, the problem with the 7-11 scenario is that you have to keep going back, since they only have, like, $20 in the drawer at a time.
Posted by John Klotz on October 24, 2008 at 10:20 PM
EEEK! Nikanons or Canikons! Danger! Run Will Robinson,RUN!!!
Posted by Bill Pelzmann on October 24, 2008 at 10:22 PM
I could see an increase in used equipment on the market, and thereby lower prices, if people decide to dump their underused items to buy desired upgrades - or food.
It's an amazing time we are living in. I expected a downturn, but obviously didn't have a clue at how "creative" Wall Street has been.
Posted by Kevin Trinkner on October 24, 2008 at 11:37 PM
LOL, some good stuff here...
I think the next couple years will be very interesting. Then again, until this crisis actually prevents me from getting out into the field shooting, I probably won't pay much attention...
Posted by Paul Gana on October 25, 2008 at 10:37 AM
I am always broke so the economy has no effect on me really since I am broke when it is good and I am broke when it is bad, I do get out to get photos but there have been plenty of times that I have not had the money for gas so I just stay home.
Posted by Mac McGlamery on October 25, 2008 at 4:45 PM
Just as an added thought, the Dollar is pretty far down compared to the Yen. I have had a Nikon 600 VR on order for over a year, with a hefty deposit!! I keep hearing slow production, etc. Even have the Nikon rep on my side. I checked out B&H and they have lots of backordered holes in their Nikon lens inventory. I keep feeling they are holding up exports to the US because of the negative status of the US dollar. Today in the paper on all this economic mess, some geru said we would see less exports out of Japan. Who knows, but it sure makes you wonder if they are avoiding the US because of the weak dollar. Just a thought.
Posted by Grant Collier on October 25, 2008 at 6:14 PM
I am an economics major, but I didn't stay at a Holiday Inn Express last night, so I can't really provide much input. With all the great new cameras coming out right now, I'm not too concerned, though. If things slow down a tad, it will just mean that if I get the new 5D II, it won't become outdated as quickly!
I'm a little more concerned about how the bad economy will affect photo sales, as photography prints and books are essentially luxury items that people can do without. But sales have been good this year, so I'll keep crossing my fingers.
Posted by Darren Huski on October 25, 2008 at 6:42 PM
I would be less worried about Canon and Nikon as how the economy will impact Sony, Pentax, and Olympus. The weaker economy will impact all but the weaker companies in an industry will feel the pinch more. Canon and Nikon might see a slight drop in sales but they have pretty good cash flow, marketshare, and probably profits. They have a strong loyal following, an installed pro user base, plus they can lower prices and steal share from the small guys (making the pinch even worse on them).
Would this force Pentax into Samsung or Oly into Panasonic? And with Sony being squeezed on all sides do they go back to more of what they know?
My guess is some short term pain in the industry (and the economy) but Canon and Nikon will be fine. Actually I think the need to drive growth will drive both to bigger and better products. We are on the digital "treadmill" now so they have to keep advancing.
If anything there could be bargins on lightly used equipment by the folks who were living on borrowed money, credit cards, and home equity loans.
This too shall pass.
Posted by Roger Rouch on October 25, 2008 at 11:34 PM
Interesting questions to ponder. I'm frankly more concerned about how economic conditions will affect my personal budget and how much photo travel and equipment replacements or upgrades I'll feel able to afford.
Posted by George Hager on October 26, 2008 at 12:27 AM
Thank you all for the helpful responses. I was hoping for some kind of secret business world magic formula that would tell me when to sell and when to buy, but of course that doesn't exist. Even if it did, we are headed into uncharted waters with the current economic situation.
We are very fortunate to have digital today. Even if prices do become outrageous, we can still go shoot and enjoy ourselves all day and it won't cost us a penny. This is one of the reasons I posted the question to begin with. I am considering dumping the old 4x5. To make it work out, I will have to sell and buy at just the right time. Since I usually buy high and sell low, this may be a real challenge for me.
I guess it all boils down to what a Southern friend of mine is fond of saying:
Discussion
14 repliesA) Will todays's market trends have an effect on the introduction of new camera systems like the Nikon D3X or the Nikon rumored MX medium format system (or a good Canon wide angle zoom)? Even if they are in the works?
B) What effect will this have on availibility of equipment? Will we have to wait long periods of time? or shorter?
C) Will used equipment be worth more or less?
D) What effect will this have on R&D of new equipment?
Any input would greatly be appreciated as it will help me make the photographic equipment decisions I have to make in the near future. Should I buy now or wait? Should I sell now or wait? Should I rob the local 7/11 now or wait? You know, that sort of thing.
A) Credit markets are integral to the creation of new technologies and the expansion of production capabilities. A reduction in available credit will hurt innovation and production expansion.
B) If demand increases but production facilities do not have capacity, then there will be shortages. However, I consider a camera to be a non-essential item for MOST buyers, so I would expect some downturn in demand.
C) Digital used equipment will always be worth less. Film used equipment in some areas has been more volatile. Used lenses, especially Canon "L" have maintained absurdly high prices (like 90%+ of new). Perhaps this will slip, but its hard to say.
D) See A.
Banks are out of money, so the 7-11 is probably your best bet.
Actually, if the gear you have now is still meeting your technical needs, then I'd wait for Moore's law to bring down the price on your next step. If you need the newest gear to maintain a competitive product, then I'd upgrade. Remember, the original 5D had an MSRP of $3200 and the 5DII is $2600. Moore's law is in effect.
All a bit of an educated guess, but...
A) for projects in the works, it's unlikely to affect delivery. Nikon will release the D2X replacement and the new MX system early next year most likely. That means they should already be nearing pilot and production phases. Production equipment is purchased and being piloted. These are aimed at market segments that have plenty of expendable income, and probably will continue to.
B) Probably no effect again. Any new product close to completion has to be marketed, shipped and sold. Prices could change depending on demand, though I'd guess that rebates are more likely than price drops. Nikon is more worried about what Canon is charging than how our spending habits have changed recently.
C) I'd expect used equipment to be more in demand as some people pull back on spending and consider used equipment in lieu of brand new, but don't think it will be enough to alter prices all that much. Depends on the product category, I think. People who can afford $5,000 DSLRs had some expendable income to begin with, and that probably hasn't changed much (unless they were tapping into their 401(k)s to fund their hobby!) When you get down into the consumer lines, those are people more likely dipping into the weekly paycheck, and used may be much more attractive than new. So maybe a bias towards used in the p&s and low end DSLR market.
D) R&D is the one place where it may have some impact. Companies will need to continue to invest heavily though; it's a competitive market with rapidly evolving technology. They can't afford to pull back too much. What may happen is longer gaps between product introductions, probably more a result of thinner R&D budgets during uncertain times than anything else.
Assuming you have the funds, I'd proceed as you had been planning. Things are actually working in favor of folks with expendable income. A lot of what's going on is affecting investments, credit, mortgage availability. The spending power of money is actually increasing. The dollar is up substantially, oil is down, commodity markets are way down.
I might wait until closer to the holidays to buy the new stuff and sell your current stuff. More demand for your used equipment as people shop for the holidays, and retailers are likely to be aggressive with sales. Probably won't help with a high end DSLR, but maybe on the accoutrements.
BTW, the problem with the 7-11 scenario is that you have to keep going back, since they only have, like, $20 in the drawer at a time.
It's an amazing time we are living in. I expected a downturn, but obviously didn't have a clue at how "creative" Wall Street has been.
I think the next couple years will be very interesting. Then again, until this crisis actually prevents me from getting out into the field shooting, I probably won't pay much attention...
I'm a little more concerned about how the bad economy will affect photo sales, as photography prints and books are essentially luxury items that people can do without. But sales have been good this year, so I'll keep crossing my fingers.
Would this force Pentax into Samsung or Oly into Panasonic? And with Sony being squeezed on all sides do they go back to more of what they know?
My guess is some short term pain in the industry (and the economy) but Canon and Nikon will be fine. Actually I think the need to drive growth will drive both to bigger and better products. We are on the digital "treadmill" now so they have to keep advancing.
If anything there could be bargins on lightly used equipment by the folks who were living on borrowed money, credit cards, and home equity loans.
This too shall pass.
We are very fortunate to have digital today. Even if prices do become outrageous, we can still go shoot and enjoy ourselves all day and it won't cost us a penny. This is one of the reasons I posted the question to begin with. I am considering dumping the old 4x5. To make it work out, I will have to sell and buy at just the right time. Since I usually buy high and sell low, this may be a real challenge for me.
I guess it all boils down to what a Southern friend of mine is fond of saying:
If you be feeing froggy - jump.