Compact and High End Cameras Suffer Due To Smartphones

Impacted by the growing popularity of camera phones, compact digital camera sales continue to decline, especially for Canon and Nikon. Sales have also suffered among high-end cameras. Combined, Canon and Nikon had 44 percent of all global sales, according to IDC. Camera manufacturers are hoping that high-end models with interchangeable lenses will improve sales. These cameras have higher margins compared to compact cameras, approximately 15 to 25 percent, according to analysts.

Cameras account for 40 percent of revenue at Canon, and compact camera sales decreased 26 percent in the second quarter compared with last year, reports The Wall Street Journal. At Nikon, cameras declined 30 percent, which represent 78 percent of revenue.

Sales of high-end cameras also declined in the second quarter. Canon had a four percent drop while Nikon fell by five percent.

The economic slowdown in China affected sales, according to the two camera makers. Nikon did not meet camera sale goals in the Americas, Europe, and Asia (not including Japan). The company also reduced its operating-profit forecast for the fiscal year by 23.5 percent.

Canon is predicting that it will sell nine million interchangeable-lens cameras this year, a decrease from earlier predictions of 9.2 million. Noruma predicts sales of only 8.37 million cameras.

Canon’s stock has lost approximately a 10th of its value, and Nikon is down about a third. If high-end camera sales do not improve, additional declines may persist.