When people buy into a system of cameras they often want to know if that system is going to be around in a few years. One way to judge the likely longevity of a system is by its sales. If sales are low a system is less likely to survive than one that has high sales.
All of the above is fairly uncontroversial. Where it starts to get more difficult is when we begin to look at actual numbers. Most of the confusion stems from the kind of data that’s available. There are 3 main types of sales data that get studied.
- Volume (How many units are sold)
- Value (How much the units sold are worth in £ or $ etc.)
- Market Share (The percentage of the total market does a company has)
Volume & Value would be the most effective ways to draw conclusions from, as to the success of a system. However, these figures are understandably closely guarded by manufacturers and are not readily available.
This leaves us with Market Share. Unfortunately Market Share is the most open to misinterpretation (and very commonly over-interpretation), as I will show in a simplified example below.
Let’s look at the market for Zogs.
In year 1 there are 4 manufacturers of Zogs, brands A-D, and each has a 25% market share.
In year 2 a new manufacturers enters the market, Brand X, and gains an 8% market share. Brands A-D experience a loss of market share and now only have 23% each.
So this must mean that Brand X has taken sales from brands A-D, right? Well, let’s see.
In year 1 the total market for Zogs was 100 units. Brands A-D sold 25 units each.
In year 2 the total market for Zogs rose to 130 units. Brand X sold 10 units, and A-D’s sales rose to 30 units each.
So you see it’s possible to increase sales while losing Market Share. The wrong assumption that usually leads to misinterpreting sales data is that it’s a Zero Sum Game. A Zero Sum Game is where one party can only gain at the expense of another. (The total pot remains constant.) Reality is that the pot can, and does increase.
So, let’s apply this to the camera industry.
One of the fashionable lines that gets thrown around is that Compact System Cameras (CSCs) are going to kill off the DSLR market. The UK market is often used as supporting data for this statement, but let’s look at the numbers.
In 2010 CSCs had 11% of the market for interchangeable lens cameras, this rose to 22% in 2011.
However during that time DSLRs experienced growth in both Volume and Value, albeit Value growth was only 1%. CSCs are almost certainly affecting DSLR growth to some degree, but there remains a mature and significant market for DSLRs.
CSCs are increasing the size of the market for interchangeable lens cameras. I would even argue that most CSCs should be considered a separate market to DSLRs given their target buyers.
Another example is looking at some figures derived from Japanese market data that you can find on Thom Hogan’s Sans Mirror website.
Thom makes some conclusions based on Market Share changes. There’s some validity to his conclusions but I believe he has over-simplified what has happened.
His first conclusion is that, as Panasonic and Olympus have lost and gained 10% respectively, that Olympus has taken its 10% gain from Panasonic.
There will undoubtedly have been some switching between brands given the shared lens mounts, but there will also have been new CSC users joining. (Including those who bought an older CSC model because it was cheaper, rather than buying a high-end compact.)
He makes a similar over-simplification with Nikon and Sony. Nikon took 5% Market Share and Sony lost 5%, ergo Nikon took Sony’s sales.
This is clearly a jump in logic. Why are Nikon getting all their market share from Sony? Of course, they’re not. In reality Nikon will have gained some sales at the expense of all manufacturers and introduced new buyers to the market.
The purpose of this article isn’t to have a go at people using Market Share data to draw conclusions about the industry. What I want readers to take from this article is not to read too much into Market Share.
Without knowing total market Volume or Value, you don’t know what has happened. Conclusions drawn from Market Share alone are purely conjecture. What potential buyers need to know when looking at a system is whether it is making a decent profit for its company. In the absence of profit data, we can use Market Share as a proxy. If Market Share is very low for a sustained period of time (think Samsung NX) then it’s likely profits aren’t great either.
The message when looking at statistics is, proceed with caution.