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Thom Hogan Comments on Hi-Res Digital

Thom Hogan (longtime Nikon expert) comments on my Why are there no new pro-grade DSLRs?, and adds some thoughts on Nikon and Canon in view of the Japanese tsunami.

Thom’s observations about product lifecycles are persuasive, but I will stick to my assertion that we are at an industry inflection point. The 2/4 year pattern might or might not hold, setting aside the Japanese tsunami, which is a schedule delay, not a trend-changer.

Whether it's 4K video or simply more compelling 2K video features, I smell something different in the wind for 2011, up to and including the abandonment of the huge-brick style camera bodies, or a move to mirror-less pro cameras. But in this sense I agree with Thom: we could still be a cycle away from such radical changes. Which would be a very dangerous game for Canon and Nikon given the onslaught of cameras of so many styles and capabilities and form factors.

Thom writes:

I fail to follow today's comment "Why are there no new pro-grade DSLRs?" On Nikon's side it's very easy to answer: a new pro-grade DSLR isn't expected from Nikon until August/September 2011. If you look at Nikon's release schedule of the single digit bodies (pro), you'll see a distinct and clear pattern. The major updates are on four-year boundaries, the minor ones on two-year boundaries. Canon is similar, though they've just missed an expected drop (what would be a 1DsIII).

No doubt future DSLRs will have video. It's nearly a no-brainer now to include such a feature. But including 4k video is not no-brainer. First, there's the internal bandwidth issue. While I don't bet against bandwidth gains, I would expect bandwidth gains to be put into solving rolling shutter, not increasing resolution. Second, in Canon's case a 4k video DSLR would be competing against Canon pro video equipment (which doesn't currently offer 4k video yet). Canon has to respond to Sony and the others offering 4k pro video equipment in the video division, I think. Politically, Canon isn't so entrepreneurial that it would allow one division (stills) to completely intrude on another (high end video). Third, we don't have an output for 4k video. Sure, Hollywood and maybe high-end commercials, but the number of cameras you're going to sell into those areas doesn't really support or warrant diverting the engineering resources, IMHO. And you'd still be sub-sampling the still camera sensor, so you'd still be lower quality than the pro 4k equipment. Fourth, 4k really needs raw support, and once you look at the numbers you're talking about huge file sizes. Even a twin slot DSLR is going to be struggling to provide a lot of record time, so we'd need another breakthrough: direct connect mass storage. Finally, the primary buyers of the pro cameras are finding that the video capabilities in them are causing problems with rights. For example, because video rights to sporting events are sold in exclusive deals these days, there is a prohibition against bringing a "video camera" onto fields by any other organization. Right now the rights battles are letting pro DSLRs in, but something has got to give, especially if those DSLRs suddenly can do 4k video (or even broadcast quality 1080P). This is an area that I don't think the Japanese companies see well enough yet, as it's happening mostly in the Western countries, but it's there and I know that big clients are pushing back on the camera companies.

DIGLLOYD: a company that fails to eat its own young is doomed to be overtaken by a more nimble player. 4K video is coming, even if it’s one more cycle away.

Thom continues:

The one big fly in the soup is the Japanese earthquake. Canon just reiterated their expectation of selling 7m DSLRs this year, though fewer compact cameras. Other than lenses, I don't see how their factories were directly affected by the earthquake. So most of the downward projection is due to supply chain, I think.

Nikon, on the other hand, is a different story. Sendai, which makes the FX bodies, took some pretty big hits from the quakes and still is (though fortunately not from the original tsunami). What many people don't realize is that Sendai is where a lot of the parts for Nikon's DSLRs get made. It made all the metal lens mounts and body frames, for instance. Much of Sendai is a maze of metal machining stations, so most of the metal parts were made there. The problem for Nikon is that some of those machines were damaged and not yet functioning, while they are also experiencing the ubiquitous power shortages. Some machines need warm up and cool down time with power disruptions like that. It'll be a real scramble for Nikon to release the two FX bodies they had planned for this year. Some of the parts for those cameras were just going into production at the time the quake hit, so they're now behind on their critical paths to production of the D4.

Nikon USA held a teleconference with their pro dealers, and things are tight, tight, tight. Without going into numbers, Nikon USA expects a certain average supply of inventory measured in days. They're not getting it on DSLRs and lenses at the moment, and apparently missing by a long shot. So beyond getting new products into production, they are missing on current products, as well. (To give you an idea: the lens mount on the just introduced D5100 was made in Sendai; they've quickly transferred this to a Malaysian company, but still, there's disruption in getting a new source fully up to speed.) Thus, all bets are off at the moment as to when Nikon will release another new camera, let alone any lens made in Japan (the 50mm f/1.8G to be announced tomorrow is made in SE Asia). Nikon will probably update their forward financials in the next week or two, as did Canon. Worst case, we'll hear about what's happening at their May 12th year end results announcement.

So we may see a disruption of Nikon's four-year schedule. It wouldn't be a welcome one, as pro buying by press organizations is on fairly tight schedules, and those are often linked to other events, like the Olympics (thus the four-year interval in the first place). The D3 was the perfect launch: announced one year in advance of the Beijing Olympics, first deliveries a bit more than six months prior to when the press organizations needed the cameras, giving them time to verify and train on them. And just early enough for organizations to discover it was a better indoor camera than the equivalent Canon, leading to massive switching.

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