The online camera-phile community inhaled a collective gasp of excitement as rumors swirled around a Canon full-frame mirrorless camera supposedly coming in 2015. The first time we heard about this was back in April 2014. Then there were the Nikon Df mirrorless rumors that disappointed a lot of people back in 2013. Now, forums are again ablaze with discussion. Rumor sites are abuzz with new traffic. Retailers are answering speculations about non-existent cameras. Canon is either getting nervous or excited, or maybe they’re just doing their own thing.
It could be wishful thinking. Or it could really be market demand. But within the often placid and innovatively revisionist camera industry, full frame mirrorless technology has been the hot topic for the last 12 months. Not since the Canon 5D Mark II (first FF DSLR with HD video) has the industry been transformed by a camera like the Sony A7 series. Now, the big speculation is, when will Canon or Nikon get into the FF mirrorless game?
We put on our Bloomberg hats today and do a little bit of market analysis. We discuss three issues that will affect Canon and Nikon’s likelihood of entering the FF mirrorless market. The article will focus on Canon because of the latest rumors, but it will also touch on Nikon. We’ll finish off with a bold prediction. A prediction that I hope would be wrong.
Skin in the Mirrorless Game
When Mr. Masaya Maeda, Managing Director and Chief Executive of Image Communication Products Operations at Canon was interviewed this September 2014, he said all the right things and relieved some our fears about Canon’s mirrorless future. When asked whether Canon will create a serious mirrorless camera (maybe implying the EOS M1 and M2 series weren’t so serious), Mr. Maeda stressed that:
We are serious. We are really focused on mirrorless and we’re spending lots of time, and devoting a lot of manpower to scaling up mirrorless development right now.
This is a great sign. But what does “serious” really mean? Canon has had a total of one mirrorless camera in the US market, the Canon EOS M1. Introduced in June 2012, it didn’t sell very well. Originally priced at $799, retailers soon had ridiculous discounts of down to $299 within only a few months. Its successor, the EOS M2, originally thought to come stateside was disappointedly omitted from the US market all together. Why the sudden seriousness now after two years of lackluster investment? Are they reacting to a market change? Are they trying to future-proof the company? Did the A7 have something to do with it?
Nikon has done slightly more in the mirrorless segment after they introduced the Nikon 1 V1 (not a typo) in October 2012. Since then, it’s released a handful of model variations and even made a rugged weather proof version called the AW1. But Nikon has taken a worryingly different approach to the mirrorless camera.
The Nikon 1 system uses the crippling Nikon CX format, which houses a tiny sensor with a 2.7x crop factor. Regular DSLR APSC sensors have a 1.5x crop factor and full frame sensors have a 1x. The bigger the crop factor, the smaller the sensor. When asked about his company’s mirrorless philosphy in February 2014, Mr. Tetsuya Yamamoto, General Manager at the Development Headquarters of Nikon Corp., responded by saying:
Compared to other players, mirrorless is different for us in terms of concept. Although the Nikon 1 is the same mirrorless structure, the intent of launching Nikon 1 is that it’s a total system for the current way that people popularly use the camera, which is to — in a very convenient way — carry the camera out with them, take beautiful photos in a casual and convenient way, and share it with other people through social media, like smart phones or smart devices.
My wife owns a V1 that she bought because it looks pretty in stormtrooper white. She’s right. It looks pretty spiffy. But it isn’t that small or convenient. I’ve shot with it and it’s unusable in low-light and its dynamic range is atrocious. There seems to be a design hierarchy at Nikon in term its mirrorless cameras. DSLRs are for professionals and mirrorless are for selfies and facebook. Yikes grandpa.
When you break down the numbers, Canon and Nikon will be starting from behind. Canon has produced 2 mirrorless models with only 1 being sold in the United States. Nikon has 7 but none of which are APS-C sized sensors. Since Sony launched the NEX-3 in 2010, they have produced 20 mirrorless models. That’s 20 revisions to hone a product line. Twenty times at bat. Thousands more man-hours in R&D. Also a lot more money spent.
Having skin in the game is a strong signal of a company’s commitment to a product philosophy. Neither Canon nor Nikon has been very committed to their own mirrorless cameras. In terms of having skin in the game, Canon is at least on the drawing board with two APSC mirrorless cameras and a mirrorless camera mount. Nikon will have to come up with a new mount all together if it wants to develop a APSC or full frame mirrorless. Corporate decisions evolve over time especially in big companies. Unless something changes, like tanking DSLR sales (which doesn’t seem to be the case just yet), it’s still a question mark how “serious” their efforts will be.
Leaving a Legacy
Everybody starts over with a new camera mount. Canon and Nikon’s strongest competitive advantage, and their achilles heels, are their gorgeous lineup of lenses. Flip through their marketing brochures at a camera store and I guarantee you’ll find a “mountain-of-lenses” photo in there somewhere. I was a Canon shooter for the majority of my photography career. I enjoyed endless choice of image making tools, not only their lenses but all the accessories that go with them. But therein lies the dilemma.
A new mount levels the playing field because legacy lenses no longer work as efficiently (yes yes, Nikon still has the F-mount after it went digital and can use lenses from the 60s but it’s market dominance today is a mere shadow of its former self because of that stubborn decision). This is especially true for mirrorless mounts because the flange distance between the lens and sensor is reduced. Unless used with a bulky adapter (which defeats the purpose of a light and portable mirrorless format), all of Canon’s EF and Nikon’s F lenses won’t as efficiently on their mirrorless cameras.
In this regards, Sony is ahead of the curve. It made sense for Sony to make bold moves when it bought Minolta in 2006 to get into the professional camera game and then jumped into the mirrorless scene in 2010. They had little to lose so they had less to risk. They currently have the most APSC+ mirrorless lenses on the market. I believe Canon has 3 for their M system.
But the good news is, Canon has done it before. They were the underdogs back in the 80s when Nikon was the market giant of its time. Canon abandoned their solid but manual focusing FD lens mount and went for the all electronic EOS mount in 1987 (see dramatic marketing video above). This enabled innovations like ultra-fast USM autofocus and optical Image Stabilization, years ahead of everybody else. They abandoned their legacy but it paved way for more than two decades of market domination.
The camera industry is hurtling towards a turning point. As soon as mirrorless cameras start outperforming DSLRs in terms of AF speed and handling, the tide will change. Canon and Nikon will have some tough decisions to make.
If you’ve taken an entrepreneurship class in high school or college, went to business school, or have sat near a group of struggling startup types in San Francisco, chances are, you will have heard of the first-mover advantage. Think Apple and the iPhone back in 2008. And less so with the iPad in 2010. Simply put, there are huge benefits to being first on the market, like big profit margins and a monopolistic lack of competition.
Sony came out of the gate early with the Sony A7. The A7 series remains the only full-frame mirrorless cameras on the market. By today, coincidentally, Sony will already be onto its 2nd generation FF mirrorless with the A7II (First impressions here).
But the story here isn’t so clear. First-mover advantage is an advantage only if the first mover can take full advantage of it (say that ten times fast). As this informative Harvard Business Review summarizes, first-mover advantage operates differently depending on whether if the market or the technology leads the demand. Nevertheless, Sony is the reigning mirrorless king. It’s up to Canon and Nikon to unseat Sony.
Canon will not debut a full frame mirrorless camera in 2015. We would love to be wrong. We would love to see some good ol’ market competition in the FF mirrorless cameras segment. At the moment, Canon is busy putting out Mark IIs and Mark IIIs on their lenses and cameras. Canon DSLRs are still selling enough for them to ignore the mirrorless market.
If past corporate practices and attitudes says anything, a company that all but gave up on its only mirrorless system will not suddenly dive in head first with a FF camera. Canon may debut another APS-C mirrorless camera. We just can’t see a Canon VP telling the board “Yes, even though we didn’t even sell the Canon EOS M2 in the United States because nobody bought the M1, we should still make a full frame mirrorless.” It just won’t make any sense. But it doesn’t have to. They should make a FF mirrorless camera.
As for Nikon, will they step up to the plate and regain their former glory before Canon unseated them? Or will they descend further into irrelevance and eventually be acquired or bought out like Pentax have?
Thank you for your support.